PV DRILLING: Proactively Preparing for TPP

 

With a professional, enthusiastic, energetic and enterprising managerial and technical force, plus the effective direction and support of the Vietnam National Oil and Gas Group (PetroVietnam), we have boldly invested in modern equipment for production development, training and resources development to master the technology and take the lead in information technology application to production - business management and operation.

 

In addition to the above efforts, enterprising and right investment is the key to the today success of PV Drilling. Accordingly, we give priority to modern automated equipment powered by latest technologies. Typically, if we only had two rigs in 2007, we now have six, including one under construction, and the number will continue to increase in the future. These new-generation rigs have enabled PV Drilling to quickly seize market opportunities, increase market share, and maintain revenue and profit growth in the past years as expected by all shareholders. Needless to say, the current success of PV Drilling is not merely resulted from the provision of high-quality services at competitive prices but more importantly the ownership of valuable assets using the most modern technologies in the world plus the pride of PV Drilling’s dare-to-think, dare-to-do, self-operating staff.

 

In a year full of complicated developments in global and domestic economies, PV Drilling outperformed its annual business plans approved at the General Meeting of Shareholders in just three quarters. Revenue and profit growth was estimated at 17 percent and 32 percent in 2013, respectively.

 

PV Drilling’s rigs are being operated at very high efficiency, usually reaching 98-99 percent of design capacity. Daily rig rents rose 7 percent year on year in the first half of the year. Since the beginning of the third quarter of 2013, daily rents in all rig leasing contracts were adjusted to US$150,000-160,000, an increase of 15 percent compared with the first six months. PV Drilling endeavoured to seek and add six rigs to the leasing fleet, bringing its total rigs to 11, including five rigs it owned and six rigs it rented.

 

Apart from the strong growth of drilling services, PV Drilling also maintained traditional technical well service contracts as drilling tubular, solids separation and filtering, mud logging, coring, well completion, platform manpower service and central mechanical repairing centre for big customers to secure stable growth. Besides, the corporation provided advanced well services like completed solution filtering, in-process pressure control, in-process parameter measurement, which have helped the company expand its market share and increase revenue and profit.

 

Moreover we strengthened production and business management, focused on our strengths, cut costs and managed risks to support earnings growth in 2013.

 

Zero import tariff at the back of Vietnam’s entry to TPP is both an opportunity and a challenge for Vietnamese enterprises, as the lessons learned from the country’s entry to the World Trade Organisation (WTO) remain vivid. However, as a relatively special service provider (drilling services and well technique services) in the oil and gas industry, PV Drilling will not be impacted as strongly as manufacturing and agricultural companies. But, this does not mean that PV Drilling is still in a "safe haven" as we always prepare for stiff competition from international competitors because drilling is a free market in Vietnam.

 

Vietnam’s participation in TPP will encourage oil and gas companies in the world to strengthen their investment for exploration and exploitation plans. This is an opportunity for PV Drilling to provide rig services, expand the market share and enhance profitability.

 

Since its incorporation, PV Drilling has faced pressures of international competition. So, Vietnam’s participation in TPP and the ensuing competition will not surprise us. At present, PV Drilling is the top drilling service provider in the region (named the Best Asian Drilling Contractor in two consecutive years by World Finance ) with its strengths not only lying in modern rig operation and leasing but also resting in the provision of various well technical services, from traditional services to high-tech services.

 

Vietnam needs 14-15 jack-up rigs a year. With four owned rigs and 5-7 leased rigs operated in Vietnam, PV Drilling targets at 70 percent of market share in 2014. Daily rents of a jack-up rig have increased to US$150,000-160,000 and the drilling market is forecast to be heated up on undersupply in the near future, especially the demand for new-generation rigs.

 

To take the lead in the drilling market, in July 2013, PV Drilling Overseas Joint Venture Company signed a contract with Keppel Fels to build a new jack-up platform called PV Drilling VI, which is expected to be completed and operated from the first quarter of 2015. This new-generation rig is capable of operating at a depth of 400 feet and the drill is capable of reaching a depth of 30,000 feet. This facility will use modern technologies in order to apply new drilling techniques to meet safety standards of oil and gas contractors.

 

In addition, PV Drilling will continue investing in machinery, equipment and advanced well services. Recently, the corporation contributed its capital to a joint venture with Baker Hughes to develop directional drilling, survey observation, drilling measurement, geophysical well measurement. The objective of PV Drilling is to compete effectively with rival multinational companies to expand its market well services share.

 

The oil and gas industry is one of the key industries, making up 26 percent of the country's GDP in 2013. According to statistics from oil companies in the world, oil and gas potential in Vietnam is huge and oil and gas businesses will certainly have broad room for further development. We can hope for impressive and sustainable business results in the future. Thus, PV Drilling is committed to preparing all aspects like labour, facilities and market forecasts to ensure the success of plans set for 2014.