VNS reports that PetroVietnam Chairman Nguyen Xuan Son said that the group was considering decreasing production from oil fields where production costs were above $50 a barrel if it was technologically possible.

The average production cost at most PetroVietnam oil fields is around $30-35 a barrel, reports VNS, although at some fields it can be as low as $20-25 a barrel.

Son said that PetroVietnam could deal with oil prices as low as $40-45 a barrel, but as prices plunge, he wants to decrease production to protect the nation’s resources.

The proposed reduction is relatively modest given the group’s 2015 production target of 16.8 million tons.

Several local media reports have indicated that PetroVietnam’s announcement makes Vietnam the first country in the world to consider such a move as a result of the current fall in prices.

PetroVietnam has also considered the possibility of increasing oil reserves if prices fall to around $40-45 a barrel, selling them when the price situation improves, says VNS.

Oil is a strategic commodity for Vietnam, and last year PetroVietnam reported total revenues of VND745.5 trillion ($34.8 billion).

Late last year, Son said that besides the difficulties lower oil prices bring, they could also bring PetroVietnam new opportunities to purchase fields at cheaper prices.

“However, the group will not abandon the oil and gas projects that are being invested in due to lower oil prices in the short term” he said. Because an oil and gas project begins from exploration, then exploitation will last for many years, it is necessary to take long-term benefits into account.

By Wendy Laursen - The Maritime Executive - January 18, 2015


Vietnam's Dec crude oil exports jump 27% on year to 867,207 mt

Vietnam exported 867,207 mt of crude oil (205,052 b/d) in December, up 27.4% from the same month last year, Vietnam Customs data showed late Friday, January 16.

The export volume in December was 23.5% higher than November. But the export value for the month was $414 million, 32.1% lower than December 2013 and down 4.7% from November last year.

The main buyers of Vietnamese crude in December included Australia (176,778 mt or 20.4% of the total), Japan (158,841 mt or 18.3%) and China (118,099 mt or 13.6%).

Over January-December, the country exported 9.29 million mt of crude, up 10.5% year on year.

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Vietnam's Dec crude oil exports jump 27% on year to 867,207 mt

Singapore (Platts)--19Jan2015/415 am EST/915 GMT

Vietnam exported 867,207 mt of crude oil (205,052 b/d) in December, up 27.4% from the same month last year, Vietnam Customs data showed late Friday, January 16.

The export volume in December was 23.5% higher than November. But the export value for the month was $414 million, 32.1% lower than December 2013 and down 4.7% from November last year.

The main buyers of Vietnamese crude in December included Australia (176,778 mt or 20.4% of the total), Japan (158,841 mt or 18.3%) and China (118,099 mt or 13.6%).

Over January-December, the country exported 9.29 million mt of crude, up 10.5% year on year.

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The export value for 2014 was $7.2 billion, down 0.1% from 2013.

The country's main crude oil customers in 2014 included Australia (2.31 million mt or 24.9% of the total), Japan (1.85 million mt or 19.9%) and China (1.59 million mt or 17.1%).

Part of the country's crude output is consumed by its sole 130,000 b/d refinery at Dung Quat, with the remainder being exported.

State-owned PetroVietnam's Binh Son Refining and Petrochemical, or BSR, operator of the Dung Quat refinery, bought about 5.7 million mt of domestic crude in 2014, from the Bach Ho, Te Giac Trang and Dai Hung fields in southern Vietnam, according to a BSR statement on December 25. It did not provide a breakdown.

BSR expects to maintain run rates of the facility at 107-110% of capacity throughout 2015, up from an average of 105% in the second half of 2014, it added.

In December, Vietnam imported 80,660 mt of crude oil for the Dung Quat refinery, down 13.4% year on year and 32% lower than November last year.

The imports for the month were worth $54 million, down 34.1% from December 2013 and 35% lower month on month.

In 2014, Vietnam imported 691,279 mt of crude oil, comprising of Azeri Light, Champion and West African crudes, for Dung Quat, dropping 46.4% from 2013. The import value was $532 million, 51.8% lower than 2013.

DEC OIL PRODUCT IMPORTS JUMP 9% ON YEAR, SURGE 51% FROM NOV

Vietnam imported 751,870 mt of oil products in December, up 9.4% year on year and 51.1% higher than November.

A local industry expert said Monday that the increase in oil product imports in December could be attributed to import tax and quota issues.

Companies possibly rushed to boost imports before import tariffs rose.

The Ministry of Finance on December 5 introduced a new import duty structure for oil products, where it raised the tariff ceilings and shortened the review period of benchmark crude oil prices.

Following that, the ministry adjusted the import tariffs on December 6 after keeping them unchanged since May 2013.

The duty on gasoline was raised to 27% from 18%, diesel to 23% from 14%, kerosene to 26% from 16% and fuel oil to 24% from 15%.

From January 7, the ministry continued to hike the import tariffs on gasoline to 35% from 27%, diesel to 30% from 23%, kerosene to 35% from 26% and fuel oil to 35% from 24%.

Moreover, December is also the time oil companies have to fulfill the import quota for the year that the Ministry of Industry and Trade allocates, the expert added. The ministry did not publicly announce the quota for 2014.

The value of oil product imports in December was $467 million, down 30% from the same month in 2013 and 32% lower than November, according to the data.

In December, Vietnam mainly imported its oil products from Thailand (166,783 mt or 22.2% of the total), Singapore (158,241 mt or 21%) and China (122,456 mt or 16.3%).

In 2014, Vietnam imported 8.62 million mt of oil products, up 17.1% year on year. The import value for the year was $7.7 billion, 9.9% higher than 2013.

The country's top oil product suppliers in 2014 included Singapore (2.59 million mt or 30% of the total), China (1.73 million mt or 20%) and Taiwan (1.26 million mt or 14.6%).

Around 70% of Vietnam's oil product demand is met through imports with the remainder supplied by its Dung Quat refinery.

By Dao Dang Toan - Platts - January 19, 2015