Leading the energy transition trend, enhancing competitiveness in Petrovietnam's service sector

ANTD.VN - On August 25, in Hanoi, Vietnam Oil and Gas Group ( Petrovietnam ) organized the 2023 Oil and Gas Services Conference.

Attending the conference were Mr. Hoang Quoc Vuong - Chairman of the Board of Directors; Mr. Le Manh Hung - General Director; along with members of the Party Standing Committee, Board of Directors, Board of Directors, leaders of specialized departments/Group Office, leaders of member units of the Group and 120 delegates.

Speaking at the conference, Petrovietnam General Director Le Manh Hung said that the service sector is one of the five main sectors of the Group, playing an important role in production and business activities as well as supporting and promoting the development of the Group. In recent times, although the service sector has achieved many results, there are still some groups of issues that need to be resolved such as the lack of a master plan, limited concentration, competitiveness improvement, linkage, sharing, coordination... in the service sectors. General Director Le Manh Hung suggested that the delegates attending the conference focus on exchanging, discussing, and jointly proposing solutions to promote the service sector in the Group.

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PTSC workers at the construction site of the drilling rig base.

The reports and discussions at the Conference also pointed out the difficulties and advantages. The Group's service units continue to promote their strengths and roles in providing services. In addition, member units in the whole Group are always responsible and aware of making the most of the services provided by units in the industry. The quality of service provision by units in the industry is increasingly improved, meeting the needs and requirements of service users. In 2022 alone, the Group's service sector revenue reached 199.8 trillion VND, exceeding 78% of the annual plan, accounting for 34% of the Group's consolidated revenue and increasing by 39% over the same period in 2021. Oil and gas service activities have made changes and increasingly affirmed their role in Petrovietnam's value chain.

Regarding the challenges ahead, according to forecasts from reputable economic and financial organizations, 2023 will have more fluctuations and difficulties than 2022, the risk of economic recession always contains many risks when economic factors always fluctuate rapidly and unexpectedly. The political and macroeconomic situation in the world is still unstable, fluctuations in the market, price indexes, exchange rates... negatively affect the production, business activities and investment plans of the unit in all areas of Petrovietnam.

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Signing of a memorandum of understanding on long-term condensate business cooperation between BIENDONG POC and BSR.

To minimize the negative impacts of this trend, at the conference, leaders of the units shared the need to promote and expand the linkage chains to optimize material resources, increase investment efficiency in the provision of oil and gas services not only inside and outside Petrovietnam. This is also the driving force and leverage for service units to be proactive, find cooperation and linkage options suitable to their capacity, and increase the competitiveness of providing services for the Group's upcoming large-scale projects in the coming time.

Speaking at the Conference, Chairman of the Board of Directors of Petrovietnam Hoang Quoc Vuong acknowledged and highly appreciated the opinions presented. Chairman of the Board of Directors of Petrovietnam Hoang Quoc Vuong also proposed to strengthen decentralization in units in the service sector to increase initiative, at the same time build an incentive mechanism, create closer coordination between units in the Group. Along with that, promote the building of corporate culture, anticipate the trend of energy transition, provide technical services related to this transition not only domestically, but also expand the provision of technical services abroad, urgently promote the process of applying digital transformation in administration, operation and building a common data and information system throughout the Group.

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PV Drillings workers on the rig.

Concluding the Conference, Petrovietnam General Director Le Manh Hung emphasized that in recent years, Petrovietnam's oil and gas service sector has not only met the maximum demand of the oil and gas market and domestic industries, but also expanded the provision of Vietnam's oil and gas technical services abroad, ensuring the development goals set by the Politburo and approved by the Prime Minister. Service units have gradually affirmed their position in terms of capabilities and capacity not only domestically but also in the region and the world. This shows that although the growth rate is not high, service units in Petrovietnam have made efforts, gradually oriented to stabilize for development and increase in scale, some typical units such as PTSC, PVOIL...

However, the service work of the units still has many difficulties and problems, that is, some types of services still have overlaps because many member units in the Group perform them together. The coordination and mutual support for development between units is still slow, the connection between units in the same Group to meet the oil and gas services is still limited, has not promoted the combined strength of the Group and has only stopped at the level of creating conditions for implementation...

General Director Le Manh Hung also acknowledged that in the recent period, Petrovietnam's strategic orientations for the service sector have brought about certain results. However, with the current speed of global energy transition, we need to have specific implementation orientations to adapt, while taking advantage of opportunities to increase revenue of oil and gas service units through exploiting oil and gas capacity and technology in a number of areas with advantages in energy transition such as: processing and manufacturing; installation of oil and gas exploitation works and oil and gas exploitation/transportation systems (EPCI); O&M and drilling... The demand for services for the E&P sector will increase dramatically from now until 2030 under the pressure of the energy transition trend. The investment rate in the renewable sector, especially offshore wind power, has surpassed fossil energy and will create a great demand for technical services. This is an opportunity but also a challenge for the growth and development of Petrovietnam's service units.

Petrovietnam is aiming to become an energy industry group. To match the stature and scale of Petrovietnam, the oil and gas service sector needs to become an “energy and industrial service sector”. To do that, Petrovietnam needs to adjust and create business models to use investment assets more effectively and increase connectivity between resources in the units. The main goal is to continue to maintain market share of traditional oil and gas services, ensure high economic efficiency; improve the quality of oil and gas services.

With that spirit and determination, the General Director requested the Representative to complete the restructuring plan, rearrange the units operating in the oil and gas service sector, ensuring the role as a sector connecting the Group's activities; urgently complete the list of key products and services of the Group in each phase; perfect the internal management system through capital investment and Representatives; improve the decentralized management model, flexibly decentralize power to Petrovietnam Representatives at the units; at the same time, request the Deputy General Directors in charge of the units, Petrovietnam Representatives at the units to regularly evaluate and propose the implementation of value chains.

General Director Le Manh Hung also requested the specialized departments and units to urgently research and develop investment strategies and develop facilities to form key service units with strong competitiveness, leading the way, capable of shouldering large-scale projects of the Group as well as in the international market in the coming time.

Within the framework of the Conference, the units signed 7 minutes and memorandums of understanding to expand the implementation and enhance the effectiveness of the linkage chains throughout the Group.

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