“PVEP (PetroVietnam Exploration Production Corporation) underwent 10 years of oil exploitation output decreases by the end of 2022,” said Hoang Xuan Duong, PVEP deputy CEO, at a workshop late last week.

2023 is the first year which did not see the exploitation output decrease after 10 years of continuous decreases. However, PVEP’s leaders said it is challenging to stop the downward trend, protect achievements, and prevent the recurrence of decline.

In order to stop the downward trend, it is necessary to find new oil fields. According to Duong, in terms of exploration, PVEP has gained achievements in raising the reserves with the reserve increase of 3.46 million tons of oil equivalent;  it fulfilled the task 50 days earlier than scheduled.

“Regarding the exploitation output, our target is preventing the decline. We must have new output from new oil fields, or increase the output from existing oil fields, and use new technology,” Duong said.

PetroVietnam also has two oil discoveries at Blocks 16-2 and PM3-CAA, which are encouraging results as only two new discoveries have been made over the last five years.

Increasing oil and gas reserves is a vital task for PetroVietnam. The reserves and supply capability of crude oil and natural gas will fall sharply if there is no new discovery.

The National Assembly’s energy monitoring report released in October 2023 noted that the domestic oil exploitation output dropped rapidly in 2016-2022. The existing oil fields are entering the last period of the exploitation cycle, while the reserve increases are small because of difficulties in exploration.

The years from 2011 and 2015 were the boom period in oil exploration and discoveries. In 2014 and 2015 alone, oil and gas reserves increased by over 40 million tons.

The Ministry of Industry and Trade (MOIT) reported that 24 new discoveries were made during the period. However, since 2016, the new discoveries have dropped sharply. In 2016-2020, only seven new discoveries were reported.

In 2011-2015, $4.72 billion was budgeted for exploration activities ($946 million a year), 56.9 percent of which came from foreign investors. Meanwhile, the budget allocated for exploration was just $1.116 billion ($279 million a year), or 29.5 percent of the average level in 2011-2015.

According to PetroVietnam, the reserves increased by 12.6 million tons a year in 2016-2021, or 55 percent of exploitation output. The figure should have been 100-120 percent to ensure stable operation.

Manh Ha