Vietnam refinery predicts profit dips

Dung Quat Refinery sets modest targets this year (Photo: VNA)

Its 2017 profits are forecasted to plunge 66 percent from 2016 to 1.68 trillion VND.

The refinery plans not to export oil this year, while its exports in 2016 earned 28 million USD. Additionally, the firm is expected to invest an additional 2 trillion VND and contribute 7.2 trillion VND to the State budget, a 5.2 trillion VND reduction from the previous year.

The State-owned Binh Son Refining and Petrochemical Company (BSR), an affiliate of the Vietnam National Oil and Gas Group (PetroVietnam)--which operates the 3 billion USD refinery--has announced its approved production, business and investment plans in the 2016-20 period.

Its total expected turnover in the five year period was 573.7 trillion VND, with average turnover of 114.7 trillion VND a year. It yielded oil prices of 90 USD per barrel.

BSR said they set the modest targets, despite high growth last year, because they foresee an expected drop in crude oil prices and a shorter production time.

Last year, its turnover was around 75.2 trillion VND, while its profit was more than 5 trillion VND. It contributed 12.4 trillion VND to the State budget.

In 2016, it spent more than 1 trillion VND on its investments, spending 1.4 times more than the previous year.

Tran Ngoc Nguyen, BSR’s general director, told media that the set targets are based on the speculative oil price of 50 USD per barrel.

In addition, the refinery will halt its operation within 52 days for its third overall maintenance in the middle of the year.

However, we should strive for higher results than the set targets, as the oil prices have increased in the world market. The maintenance is also expected to be shorter than the scheduled plans, he added.

BSR also aims to maximise its operation and production to reduce costs, increasing effectiveness. It has striven to bring its total yearly capacity to 98 percent, with a total output of 5.8 million tonnes.

The refinery meets around a third of Vietnam’s demand for fuel and oil products.

It reported that last year, its average salary and bonuses for leaders were 38.8 million VND a month, a sharp decrease from 44.9 million VND in 2015.

It has proposed the Ministry of Labour, Invalids and Social Affairs consider applying its special mechanism for managerial salaries at companies with annual turnover over 100 trillion VND.