Petrovietnam confronts declining oil, gas production

07:00 | 10/11/2021 Companies

(VEN) - Vietnam’s oil and gas production has declined continuously since 2015. What are the reasons and solutions to the problem?

petrovietnam confronts declining oil gas production

Reduction in exploration, exploitation

Vietnam’s major wells have been exploited for 15-35 years and are in the final stage of production. Domestic oil production declined from 16.9 million tonnes in 2015 to 15.2 million tonnes in 2016, 13.4 million tonnes in 2017, 12 million tonnes in 2018, 11 million tonnes in 2019 and 9.7 million tonnes in 2020. The figure is forecast to continue falling in the coming years.

To limit reduction in natural production, the Vietnam Oil and Gas Group (Petrovietnam) and other oil and gas producers are trying to drill more wells.

Petrovietnam has focused on conducting scientific research, promoting innovation, using modern machinery and equipment in production and seeking solutions to improve the oil recovery coefficient. The group has made continuous efforts to fulfill the annual oil and gas exploitation plan assigned by the government.

petrovietnam confronts declining oil gas production

Vietsovpetro workers on an oil rig

Solutions to maintain, increase production

In order to complete all oil and gas exploration and exploitation targets during the 2020-2025 period, Petrovietnam has implemented solutions in terms of technique-technology, finance-investment, mechanism-policy and training. Given the reduced production at existing wells, the group has identified operations of new oil fields as the key solution to maintain and increase production.

However, the ratio of success in exploring and exploiting new oil fields is only 20 percent. In addition, cumbersome administrative procedures for oil and gas exploration projects have hindered exploration by state-owned enterprises and those with state capital, such as Petrovietnam and the Petrovietnam Exploration Production Corporation (PVEP), prompting the need for favorable mechanisms and policies to facilitate operations in this sector.

Vu Quang Nam, former deputy general director of Petrovietnam and deputy chair of the Petroleum Club, said the oil and gas sector has huge demand for capital given the fact that US$10-15 million is required to seek and explore one oil field.

Petrovietnam President and CEO Le Manh Hung said the group has given priority to oil and gas exploration and exploitation. However, difficulties in terms of technical and geological conditions, and obstacles caused by legal regulations have been directly affecting operations of Petrovietnam and the relevant units under its responsibility.

Vietnam’s oil and gas reserves remain large. If search, exploration and exploitation are conducted smoothly, this resource can contribute to the country’s economic development and sovereignty protection.

Dao Chung