According to the Vietnam Oil and Gas Group (PVN), the corporation is currently facing numerous challenges in production, business operations, and capital construction investment due to its limited autonomy in selecting contractors and making business decisions.
Given the nature of offshore oil and gas projects, which are heavily influenced by weather conditions, PVN noted that in many cases, strict compliance with current administrative procedures could cause the corporation and its subsidiaries to miss valuable investment opportunities.
Particularly in the bidding process for oil and gas construction projects, domestic enterprises face a competitive disadvantage because the VAT rate applied to local contractors is 5% higher than that of foreign companies. As a result, PVN’s subsidiaries find it difficult to compete on bid prices and, in some cases, lose contracts even in the domestic market.
PVN representatives also affirmed that the corporation is actively directing its units to exceed the performance targets assigned by the Government.
It is estimated that in 2009, exploration and prospecting activities will contribute to an increase of over 70 million tons in oil and gas reserves — equivalent to 200% of the planned target.
In 2009, exploration efforts achieved encouraging results, with nine new oil and gas discoveries — six domestic and three overseas. Crude oil output reached 16 million tons, while gas output stood at 8 billion cubic meters, marking a 6.7% increase compared to 2008.
(Source: Vietnam News Agency, December 9; Vietnam Economy & World, December 9)
