A oil rig of Vietsovpetro at Bach Ho oil field off the coast of Vung Tau. Photo: VNA
National oil and gas group PetroVietnam plans to shut down or reduce output at some of its oil fields if crude oil prices fall below US$30 per barrel, said Deputy CEO Do Chi Thanh during a Monday meeting.
The group posted revenues of VND81.1 trillion ($3.65 billion) last month, meeting just 70 percent of its target. During that time, average crude prices declined 35.4 percent year-on-year to $32.4 per barrel, Thanh said. Three of its subsidiaries have suffered losses, including PetroVietnam Oil Corporation which has lost more than VND100 billion.
Vietsovpetro, a joint-venture between PetroVietnam and Russia's Zarubezhneft, is struggling to fund production, he added.
Last month, CEO Tu Thanh Nghia, reported that the joint-venture faced a deficit of around $230 million even after numerous efforts to cut costs, including shutting down two of its subsidiaries and laying off 400 employees.
Last year, PetroVietnam reported a 24.8 percent drop in year-on-year revenue or VND560.1 trillion ($24.63 billion). During that time, it produced 18.74 million tons of oil at an average cost of $24.4 per barrel compared to $36.4 in 2014, local media reported.
The group plans to cut its output to 16.03 million tons this year and reduce production costs by 10-20 percent.