PetroVietnam's revenue took a big hit last year after many of its member companies had to cut back on production and lay off hundreds of employees due to falling oil prices, local media reported.
Vietsovpetro, an oil and gas joint-venture between the state-owned giant and Russia's Zarubezhneft, saw the most difficult year in its 30-year-plus history in 2015, Lao Dong newspaper quoted CEO Tu Thanh Nghia as saying at a meeting on Saturday.
Its budget deficit now stands around US$230 million, even though the company has reduced production costs, including temporarily closing costly, ineffective projects and terminating contracts with external service providers.
Last year it shut down two of its subsidiaries and laid off 400 employees, including 46 Russian employees, he said.
The measures allowed Vietsovpetro to cut its production cost to $23.7 per barrel, compared to $31.3 in 2014, according to Nghia.
He said it will have to reduce the cost to less than $20 per barrel, if world oil prices continue to plummet.
Global benchmark Brent dropped over 2 percent to $32.66 per barrel on Monday. Many international analysts predicted that oil prices will possibly hit the bottom at $20 this year.
Vietsovpetro, in which PetroVietnam owns a stake of 51 percent, defaulted on $86 million in taxes, Finance Minister Do Hoang Tuan Anh told a press conference in October.
PetroVietnam's exploration arm PVEP was another victim of the oil shock that started more than one year ago. Its net profit was estimated VND20 billion ($879,740), compared to over VND14.7 trillion ($646.6 million) in 2014, Lao Dong reported.
Service suppliers such as PetroVietnam Drilling and Well Services Corporation reported a harsh competition from foreign suppliers who have cut their prices to win contracts.
Better known as PV Drilling, the corporation plans to continue reducing costs by cutting the salary of high-paid personnel and replacing foreign experts with Vietnamese, the newspaper reported.
Nguyen Hung Dung, deputy CEO of PetroVietnam, was quoted as saying the profits of oil and gas servicing companies could decrease by 40-45 percent this year.
With many of its main subsidiaries being hit hard by the oil shock, PetroVietnam, which has stakes in 32 companies, reported a year-on-year decrease of 24.8 percent in its revenue to VND560.1 trillion ($24.63 billion) in 2015.
The group managed to cut the average production cost at its oil fields to $24.4 per barrel from $36.4 in 2014, and produce 18.74 million tons of oil, up 11.5 percent from the government's plan, local media said.
PetroVietnam plans to cut its output to 16.03 million tons this year and production costs by 10-20 percent.
In a recent report, the group estimated that its revenue is set to see a decrease of VND5.4 trillion ($237.53 million), when oil prices slip by $1 per barrel. That will in turn cause a loss of VND1.5 trillion ($65.98 million) in state revenue.