PetroVietnam Predicts Lower Revenues for 2009 due to Low Oil Price

The state-owned oil monopoly PetroVietnam group said the sharp decrease in the global crude oil prices over the last few days have been remarkably affecting its earnings next year, state media reported.

 

As part of efforts to seek solutions for the fluctuations of the world fuel market, PetroVietnam has given three scenarios of its gross revenues next year, based on the three possible price levels.

 

According to the first scenario, the world oil price hovers at US$50/barrel, PetroVietnam's export revenues of crude oil will drop 57.69 per cent on year (or US$6 billion to US$4.4 billion), which will make its gross revenues drop 24.28 per cent to VND212 trillion (US$12.84 billion).

 

With the global oil price of US$40/barrel, PetroVietnam’s crude oil shipments will slump 66.34 per cent on year (or US$7 billion to US$3.5 billion); and its total revenues will decline 28.57 per cent on year to VND200 trillion (US$12.12 billion).

 

With prices of US$30/barrel, PetroVietnam will face difficulties in oil production at the small oil wells as its production will not bring earnings high enough to cover its operating costs.

 

In this case, PetroVietnam's process of production and development of oilfields will be influenced as contractors will have to consider the investment efficiency and capital arrangement capability. This will affect the plan to increase the reserves and the exploitation output of the group in the coming years.

 

PetroVietnam targets to produce 48.36 million tons of oil equivalent, including 32.36 tons of crude oil and 16 billion tons of gas during the 2009-2010 period.

 

This year, PetroVietnam targets revenues of VND316.4 trillion (US$19.175 billion) and contributes VND113 trillion (US$6.848 billion) to the state coffer. (Investment, Vietnam Net)