During the past time, PVN has proved to be the leading corporation in a crucial economic -technological industry in Vietnam with continous development, plays a significant role to the modernization and industrialization, energy security, government budget and social economic development of Vietnam.

PVN’s HeadOffice

PVN has made an important contribution in Vietnam total state budget revenues. In period 2013-2017, it contributed approximately 500 trilions dong including tax payment and state budget. Although global oil price has tumbled to its lowest level since 2015, PVN has been struggling to complete its targets set for the year 2015: 89,081 billions dong, 2016: 72,846 billions dong and 2017: 79,369 billions dong.

As a result, in order to allocate enough resources for PVN to complete its strategical priorities, the Political Bureau of the Vietnam Communist Party has issued Resolution No. 41 regarding Master Plan on Development for Vietnam Oil and Gas Industry to 2025, oriented to 2035. Under the plan, PVN will be allowed to keep a portion of its profit and 100% sales from privatization and divestment in its subsidiaries.

However, so far PVN has faced difficulties in fullfil this plan due to many obstacles and reasons. PVN has therefore submitted a Restructure Plan to 2025 to apply the approved policies to accelerate its restructuring proceeds, particularly in privatization and divestment activities. In which, government may consider the allocation mechanism of sales from privatization for re-investment.

In practical, this will be future funds arising at the time of privatization, thus a company may retain its stake equal to its share capital, the surplus will include 30% of investment fund for development and other funds. PVN and subsidiaries may retain 40% of surplus from privatization after deducting the cost price.

Vung Ang 1 thermal power.

In the next years, to facilitate the state-owned enterpises and PVN in particular, government may call for the appropriate policies and regulations for their better cash flow, business performance, giving momentum for further development.

If the proposed mechanisms will be approved, PVN will have more funds to and resources to carry out major projects, increasing in state budget contribution and efficiency in state-owned capital investment and management.

Bui Cong