Solutions sought to deal with reduction 188bet 88betapp oil and gas production

Workers of Vietsovpetro on a oild and gas platform.

Since 2015, Vietnam has seen consecutive declines 188bet 88betapp oil and gas output and exploitation plan. What're reasons behind the situation and solutions to the problem?

Reduction 188bet 88betapp oil and gas exploration and exploitation 

Currently, the majority of operating oil wells 188bet 88betapp Vietnam have been put into operation since the 1986-2015 period. Major wells have been exploited for 15-35 years and entering last periods of their life, resulting 188bet 88betapp a natural reduction 188bet 88betapp output of15-25 percent per year.

Statistics showed that domestic oil production dropped from 16.9 million tonnes 188bet 88betapp 2015 to 15.2 million tonnes 188bet 88betapp 2016, 13.4 million tonnes 188bet 88betapp 2017, 12 million tonnes 188bet 88betapp 2018, 11 million tonnes 188bet 88betapp 2019 and only 9.7 million tonnes 188bet 88betapp 2020. The figure is predicted to continue to fall 188bet 88betapp following years.

Despite efforts of oil and gas producers, including the Vietnam Oil and Gas Group (Petrovietnam), 188bet 88betapp seeking solutions to drill more wells, the number of infilling wells has remained modest and contributed only less than 10 percent of the production of the whole wells. Efforts to optimise the wells have only helped pick up the output of the wells by 1-2 percent. 

Along with a reduction 188bet 88betapp oil production, gas exploitation plans of Petrovietnam for the next years are expected be cut due to difficulties 188bet 88betapp selling gas, especially the fall 188bet 88betapp demand on gas serving electricity production.

188bet 88betapp the first nine months of this year, sales of gas for power generation were equivalent to only 72 percent of the firm’s figure 188bet 88betapp the same period last year and 70 percent of its plan.

188bet 88betapp the first nine months of this year, sales of gas for power generation were equivalent to only 72 percent of the firm’s figure 188bet 88betapp the same period last year and 70 percent of its plan. Compared to the plan assigned by the Ministry of Industry and Trade, the figure only reached 84 percent 188bet 88betapp the southeast region and about 70 percent 188bet 88betapp the southwest region. The drop has affected exploitation plans of wells.

For many reasons, the reduction 188bet 88betapp the real output and exploitation plans 188bet 88betapp the country is obvious despite the careful calculation of oil and gas firms.

Measures sought to maintain, improve production

188bet 88betapp order to complete all oil and gas exploration and exploitation targets 188bet 88betapp the 2020-2025 period, Petrovietnam has rolled out numerous comprehensive measures 188bet 88betapp technical-technology, finance-investment, mechanism-policy, organisation and training.

At an oil filed at sea

However, amid the reduction 188bet 88betapp the production at wells, to maintain and enhance the production of oil and gas, the firm has defined that the operations of new wells as the key solution. Therefore, the firm has paid special attention to investing 188bet 88betapp seeking and exploring new oil fields.

Due to various risks 188bet 88betapp seeking and exploring of new wells, the ratio of success of explored wells is only 20 percent. At the same time, difficulties 188bet 88betapp administrative procedures for oil and gas exploration projects have hindered State-run firms and those with State capital such as Petrovietnam and PVEP to launch the projects. 

Vu Quang Nam, former Deputy General Director of PetroVietnam and Vice Chairman of the Petroleum Club said that the capital demand of the oil and gas sector is very high. He noted that it takes about 10-15 million USD to seek and explore a normal well, not to mention risks during the process.

He stressed the need for capital resources and favourable mechanisms to facilitate the operations of businesses 188bet 88betapp the sector, especially 188bet 88betapp balancing their capital resources for re-investment.

It takes about 10-15 million USD to seek and explore a normal well.

According to the Vietnam Oil and Gas Association, due to the shortage 188bet 88betapp capital for exploration activities, the sector is facing an imbalance 188bet 88betapp the increase of reserve and production. At the same time, the shrunk search, exploration and exploitation activities, coupled with the rising cost for exploration and exploitation operations and complicated security developments 188bet 88betapp the East Sea, are believed to discourage foreign investors. Therefore, it is crucial to seek suitable and attractive incentives for them to draw more investment.

Alongside, experts also pointed to the need to apply short-term and middle-term measures to increase oil and gas reserve, including a change to conditions on sharing profits between the State and investors, the empowerment for Petrovietnam to approve technical changes to the plans of oil field development, and the ensuring of consumption from Vietnam Electricity.

Petrovietnam General Director Le Manh Hung underlined that the group has put exploration and exploitation activities to top priority. The potential of Vietnam’s oil and gas sectors remain great, therefore, 188bet 88betapp order to optimise the sector’s contributions to the country’s economic development and sovereignty protection, the promotion of search, exploration and exploitation activities should be conducted smoothly to attract investors and create new incomes for the country, he stated./.

​VNA