To achieve that result, Petrovietnam actively implemented a synchronous solution package, timely responded to the “double crisis” with the motto: “Change management, value optimization, sales promotion, efforts to overcome difficulties, seize opportunities, safe to finish”.
In the management and administration of production and business activities, Petrovietnam proactively developed and promptly deployed urgent solutions packages to cope with the dual effects of the epidemic and low oil prices. Petrovietnam instructed the entire Group and its subsidiaries to actively capture and update market information on supply and demand, fluctuations in crude oil and petroleum products prices, thereby formulated specific plans, operated scenarios to respond to, including those for the worst case.
In addition, the Group’s leaders regularly had meetings with units and sectors in order to grasp the situation of production and business, promptly remove difficulties for each unit and sector. The spirit that Petrovietnam’s President and CEO Le Manh Hung thoroughly understood at all meetings was to closely follow developments, manage fluctuations, proactively make forecasts, assessments, and have specific solutions and plans for each time period, both in the short term and long term, promptly report difficulties and obstacles to find ways to solve and best implement the set targets, even higher, with more pressure.
Petrovietnam and its subsidiaries urgently developed internal regulations throughout the Group to manage and direct production and business activities during the Covid-19 epidemic safely; reviewed work, strengthened governance, implemented solutions to reduce costs; studied and proposed solutions to remove difficulties, offered scenarios to cope with each situation where oil prices fall to the lowest, even the worst scenario such as the forced shutdown of fields and refineries; the units enhanced the sharing of information, resources, markets... to optimize the performance of the entire value chain of Petrovietnam; strengthened cooperation with domestic and foreign enterprises having business lines related to the products of their units to remove the market, optimize the resources of the parties to overcome the difficulties together.
After 2 months of implementation, the solution package to response to the “double crisis” became effective. It was most clearly seen in Petrovietnam’s business results in May. Specifically, in May 2020, Petrovietnam’s production and business activities continued to be stable, safe and mostly achieved and exceeded the set targets. In particular, the total output of crude oil extraction in May was 1.8 million tons, exceeding 1.1% of the month plan; accumulated amount of 5 months was 8.99 million tons, exceeding 4.4% of the 5-month plan. Crude oil production was 0.96 million tons, exceeding 2.1% of the month plan, accumulated amount was 5.01 million tons, exceeding 8.6% of the 5-month plan. Gas output was 0.84 billion m3, equivalent to 100% of the month plan.
Electricity production in May was 2.04 billion kWh, exceeding 4.2% of the month plan, accumulated amount of 5 months was 9.05 billion kWh. The result marked the month beyond the plan because PV Power’s power plants operated continuously and stably, met the mobilization requirements of the system; participated electricity market effectively.
Besides, fertilizer production in May was 155.6 thousand tons, exceeding 8.3% of the month plan, accumulated amount of 5 months was 757.2 thousand tons, exceeding 8% of the 5-month plan. Petroleum production in May was 0.976 thousand tons.
Another positive sign was that the inventory of petroleum products at the end of May 2020 tended to improve compared to the previous month. In particular, inventory of petroleum products at BSR and PVNDB decreased from 23% to 65%. Fertilizer inventory of Ca Mau Fertilizer Plant decreased by more than 48%.
With positive results from production and business, along with the recovery of world oil prices, Petrovietnam’s financial results in May also prospered. Total revenue of the Group in May was 38.3 trillion dong, an increase of 1.6% compared to April 2020, and the accumulated value in 5 months was 237.8 trillion dong. Total amount contributed to the State budget by the whole Group in May was 4.3 trillion dong, an increase of 8.2% compared to April 2020; accumulated amount of 5 months was 28.9 trillion dong.
In addition to the implementation of the solution package, Petrovietnam and its subsidiaries drastically reduced costs. A series of “contractionary” solutions were implemented by Petrovietnam with the highest goals of safety, health, environment, maintaining job...for laborers; strengthened governance, optimized resources; implemented tools and solutions to reduce costs, saved time and improved labor productivity; reviewed and cut down costs to reduce synchronously with revenue reduction, including reduction of personal income from leaders to employees... Obviously, in the difficult context, when many international oil and gas corporations and companies cut jobs and laid off workers, Petrovietnam’s solution was timely, reasonable and actually agreed, highly shared by a large number of workers. By the end of May 2020, the whole Group reduced costs by over 8.7 trillion dong, bringing consolidated profit after tax of 7.1 trillion dong in the first 5 months.
Looking back at the world and regional oil and gas market in the first 5 months of the year, many oil and gas companies and groups are facing difficulties due to the serious drop in oil prices and the Covid-19 epidemic. In the first quarter business report, many oil and gas giants suffer from serious losses such as Eni with 3.22 billion USD; Rosneft with 1.1 billion USD; ExxoMobil with 610 million USD; BP with 4.36 billion USD.
It affirms the bravery to overcome difficulties of oil and gas people, it is the spirit of “Being firm in hardships and bravery before challenges”; the correctness and effectiveness of the solution groups that Petrovietnam has implemented effectively over the past time. Evaluating the effectiveness of the solution package, Petrovietnam President and CEO Le Manh Hung affirmed that if Petrovietnam did not perform the solution package drastically, synchronously and effectively, the Group’s production and business activities would suffer from losses like the oil and gas giants in the world.
Based on analysis and evaluation, Petrovietnam states that, in the coming time, although the demand for crude oil and petroleum products continues to increase, directly proportional to the level of world and domestic economic recovery but there are also numerous difficulties ahead. Therefore, Petrovietnam and units will continue to exchange information, regularly update the solution package, be ready to cope with market fluctuations, stick to production and business targets, and drastically reduce cost, be proactive and calm to overcome challenges.