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Vietnam oil, gas firms expect good Q1 results on higher crude prices

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Workers at a PetroVietnam Gas JSC (GAS) plant. gas/VIET NAM NEWS

Vietnam oil, gas firms expect good Q1 results on higher crude prices

Many Vietnamese companies in the oil and gas field might post positive results in the first quarter of 2021 thanks to the strong rally of crude oil in the international market.

As of March 31, crude prices rose more than 23.6 per cent. It even broke over $70 a barrel last month.

The gain received support from lower global oil stocks. The Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed to extend production curbs, and supply from the US was estimated to fall four million barrels a day.

The bullish oil price might have positive effects on business activities of oil and gas companies in this year’s first quarter. Early this month, PetroVietnam Gas JSC (GAS) reported revenue of over 17.8 trillion dong ($777 million) in the first quarter, equivalent to 102 per cent of its quarterly target.

Its profit after tax was more than 2.23 trillion dong, equivalent to 127 per cent of its plan, GAS said in a statement on its official website.

The company said that despite unstable demand from customers, lower than GAS’ estimation and that of the same period last year, and some transportation issues to transfer oil and gas to the mainland from offshore basin, GAS still achieved business targets on higher oil prices.

GAS’ price policy is normally 46 per cent of furnace oil (FO) price. Once oil prices rise, GAS will directly benefit from the higher sale price of gas and liquefied petroleum gas (LPG). It is holding a 100 per cent market share in natural gas and is accounting for the largest part in wholesale LPG.

Binh Son Refining and Petrochemical Co Ltd (BSR) also expected good results in the first quarter. In an announcement, BSR estimated that it gained nearly 21 trillion dong in revenue in the first quarter, with a profit of over 1.8 trillion dong.

The company stated that the strong rally in the international oil price is the main reason for the good results.

Meanwhile, fuel demand is also expected to improve as the pandemic has been contained.

PetroVietnam Oil Corporation (OIL) said the increase in oil prices might help it revert the provision for devaluation of inventories in the first quarter of 2021, as well as to improve domestic fuel output, especially aviation fuel when international routes are reopened.

The group of oil and gas companies providing services and products such as PetroVietnam Technical Services Corp (PVS), PetroVietnam Drilling & Well Services Corp (PVD), Petrovietnam Transportation Corp (PVT) and PetroVietNam Chemical and Services JSC (PVC) also witnessed positive signs on stable operations and development of new projects.

Shares of these companies were also boosted by the higher oil prices and good business result outlooks.

In the first quarter, BSR shares increased sharply by 73.5 per cent compared to the beginning of the year, followed by PVD (30.6 per cent), PVT (17.2 per cent), PVS (22.3 per cent), OIL (17.2 per cent) and GAS (1.8 per cent).

VIET NAM NEWS/ASIA NEWS NETWORK

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