• 4 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 7 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 10 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 13 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 3 hours More dumbed down? re Hong Kong Act of Congress
  • 3 hours U.S. Shale Output may Start Dropping Next Year
  • 32 mins U.S. Shale To Break Records Despite Bearish Rhetoric
  • 24 hours EU has already lost the Trump vs. EU Trade War
  • 4 hours Winter Storms Hitting Continental US
  • 22 mins Petroleum Industry Domain Names
  • 4 hours Aramco IPO magic trick
  • 1 day Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 22 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 29 mins The 5 Scary New Rules Of Upside-Down Capitalism
  • 5 hours Crazy Stories From Round The World
  • 23 hours PennEast Appealing Wacky 3rd Circuit Decision to Supreme Court
  • 1 day Article: Did Exxon only make $39 Million onshore U.S. last quarter ?
  • 22 hours China 2019 - Orwell was 35 years out
Alt Text

Vigilante Offers $100,000 Bounty To Hack Oil & Gas Companies

A well-known vigilante hacker offered…

Alt Text

The Race To Develop A 50 Billion Barrel Oilfield

China has clearly become the…

Alt Text

The Worst Is Over For Oil Markets

It has been a tough…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

The Dark Horse Of The Oil Price Rally

Vietnam’s economy is this year set to exceed the government’s growth forecast, which was predicting a healthy rise of 6.7 percent, VOA reported recently, citing a government statement. The reason this will be possible is oil prices. That’s right. Few of us would think of Vietnam when the benefits of oil production are discussed, but there you have it: this tiny producer is raking in the cash and will continue to rake it in even if Brent falls back to US$65.

To get an idea of just how much oil this new Asian tiger pumps, here are the figures for September and January to September this year: 910,000 tons (6.67 million barrels) for September and 9.04 million tons (66.26 million barrels) for the first nine months of the year, according to government statistics quoted by Reuters. What’s more, the nine-month figure was down 11.7 percent on an annual basis and the September figure was down 14.2 percent. Still, Vietnam’s economy is getting enough fuel from oil sales, it seems, to hit on all cylinders.

Exports of oil have also been on the decline this year. For the nine months so far, crude exports dropped by a hefty 45.2 percent on the year and September exports shed 21.1 percent. The reason is trivial: natural decline at mature fields. At the same time, new fields are in geologically challenging areas, according to state oil company PetroVietnam, as quoted by S&P Global Platts earlier this year, when June exports took a 67.5-percent nosedive. And still the outlook for the country’s economy is bullish.

Over the first nine months of this year, the Ministry of Finance has calculated oil export revenues at US$3.13 billion. That would be 42.5 percent more than oil revenues for the comparable period of 2017, VOA reports. Put simply, higher oil prices are more than making up for the production decline, at least for the time being. Related: Goldman Sachs: This Is The Next Big Risk For Oil

If this state of affairs continues, Vietnam plans to start building more refineries. To date, the country relies on imported fuels for 70 percent of its consumption and, naturally, wants to change things. However, this may take more time than the government would like.

There are two operating refineries in Vietnam at the moment, with a combined capacity of 330,000 bpd of crude. One large-scale refinery project, the Nam Van Phong, was first approved in 2008 and it has yet to be built. With a price tag of US$4.4-4.8 billion, that’s hardly surprising. Another petrochemical project, worth US$3.7 billion, has also been put on hold as state companies participating in these projects found themselves unable to provide the capital required. This has opened up the door for foreign investors to step in, but it is too early to say if these two refineries will see the light of day.

Declining production seems to be the biggest problem for Vietnam’s oil industry. Reversing the decline would require a lot of investment, as would exploration for new reserves, especially since some of these reserves are in disputed areas of the South China Sea. In this context, high oil prices gain even greater importance for Vietnam’s budget. Count it among the producer group that is keeping their fingers crossed for the rally to last longer.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play