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PetroVietnam confirms stability of oil, gas shares
Shares in the oil and gas industry will remain stable during the rest of the year despite difficulties in the domestic stock market, said Nguyen Ngoc Su, deputy general director of the Viet Nam National Oil and Gas Group (PetroVietnam), in an online exchange on Monday.
"Oil and gas shares were affected by the general stock market decline, but in my opinion, (recent) declines in this area are temporary," said Su.
"Oil and gas enterprises have managed to maintain their operation and produce profits amid economic difficulties, and this is the most solid foundation that assures the stability of shares in this sector," he said.
"Most firms surpassed their business targets in the first half of the year, and we are striving to exceed plans in the second half," he added.
In the first half of the year, the group saw VND120.35 trillion (US$6.8 billion) in total turnover, representing 113 per cent of the target set for the period and 57 per cent of the year's plan. Six-month export value attained was $3.5 billion, representing 115 per cent of the period's set target.
Su said the unstable world crude prices were a major disadvantage to the group's revenue growth and investment plans. "But with the current trend, we expect oil prices to range between $55 and 65 per barrel during the rest of the year and with such levels, our business stability can be assured."
He said the group was actively implementing investment projects both at home and abroad, including oil and gas survey and exploitation projects in Algeria, Russia, Venezuela and Malaysia.
Mergers and transfers
According to Su, the group did and would continue to merge and transfer its subsidiaries in the coming years. He cited examples including the mergers of PetroVietnam Land with PetroVietnam Construction, and PetroVietnam Premier Recreation with PetroVietnam Drilling Mud.
"We see the need of restructuring affiliates with similar business functions into concentrated units in order to boost competitiveness on the market, as well as minimise internal competition."
PetroVietnam would equitise "almost all" of its subsidiaries under its development strategies. "The equitisation plan given by the Government is now mostly fulfilled," he said, adding that the group was boosting works on the equitisation of its major affiliates such as PetroVietnam Gas and PetroVietnam Power.
Su said growth in some firms after being equitised was "not up to group leaders' expectations" as affected by the global economic crisis, but affirmed "almost all firms have shown more effective performance."
The group said recently that it would sell shares in three subsidiary companies to reduce its holdings in these firms to 51 per cent.
The firms include PetroVietnam Insurance, PetroVietnam Drilling Mud, and Domesco Medical.
Asked if the cut in stakes were due to the group's capital shortage. Su said the move was to reorganise its affiliates as well as meet requirements set by Government equitisation plans.
"With our great demand for investments in the coming years, we will have to mobilise a very large amount of money. But money will be raised primarily through credit institutions."
PV Securities Co. Deputy Director Pham Quang Huy said oil and gas shares were now "relatively cheap", with the price-to-earnings (P/E) ratio of the industry now at 12x, compared to 17x of the general domestic stock exchange.
PetroVietnam has a few affiliates listed on the local stock exchange including Phu My Fertilisers (DPM), PetroVietnam Finance (PVF), PetroVietnam Insurance (PVI) and PetroVietnam Technical Services Corp (PVS).
vietnamnet, vietnamnews
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