The biggest problem for the additional exploitation of 1 million tons of crude oil and 1 billion cubic meters of gas is the expected low oil price.

MPI cited international reports as forecasting that the crude oil price in the second half of the year would be around $40-50 per barrel. 

“This will make it difficult to make financial arrangements and this will affect the business performance of PetroVietnam,” MPI warned.

However, it affirmed that the national oil & gas group will fulfill the plan of exploiting 13.28 million tons of crude oil and 10.6 billion cubic meters of gas.

The biggest problem for the additional exploitation of 1 million tons of crude oil and 1 billion cubic meters of gas is the expected low oil price.

Regarding the production of the oil & gas sector in the first six months of the year, the ministry said the oil exploitation output was 6.9 million tons only, decreasing by 12.5 percent over the same period last year, while the gas exploitation was 5.16 billion cubic meters, down by 8.7 percent.

If noting that the average oil price in the first half of the year was $54.6 per barrel, the oil & gas sector would make up 5.6 percent of GDP, 20.3 percent of industry GDP and minus 0.69 percentage points of GDP growth.

The crude oil price has decreased to the deepest low in the last seven months ($46per barrel) because of events in the US, Russia and other large oil exporters. 

The decrease in the crude oil exploitation output in the first half of the year was due to the fact that most oil fields have seen the peak exploitation days and are entering the natural decline period.

Moreover, the decline in oil prices has affected exploration and exploitation activities to increase the reserves.

Regarding coal mining, the production capacity of the industry is capable of providing enough coal for production. Vietnam plans to exploit 41.43 million tons of coal this year, an increase of 7.6 percent over the last year.

However, the inventory volume of clean coal is expected to reach 13.85 million tons, including 13 million tons of Vinacomin, the nation’s leading coal miner.

In the first six months of the year, the industry exploited 20.6 million tons of coal, fulfilling 44.5 percent of the yearly plan. The inventory volume was 10.22 million tons. 

The industry made up 0.84 percent of GDP, accounting for 3 percent of industry GDP and contributing 0.06 percentage points to GDP growth.

Miners now have to exploit coal in more difficult conditions because open cast mines are getting exhausted. 

Vietnam exported 1 million tons of coal in the first half of the year.

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Chi Mai