Assessing the status of implementing 'value chains' in the Vietnam Oil and Gas industry

According to the PVN assessment, in the recent time, PVN activated and brought into play a number of successes during Covid-19 and market changes as:

- For crude oil chain to transport, process, sell and distribute products (Dung Quat Oil Refinery).

- For link chain of BSR - PVNDB - PVOIL in coordinating and trading gasoline.

- For link chain of PV GAS - PVOIL in producing RON 91 base gasoline, DO bottom product from condensate. And a number of chains under the other specialized majors.

During the implementation process, the units proposed to build 24 linked chains in 4 blocks:

1/ Exploring and exploiting oil and gas (E&P).

2/ Gas - electricity – nitrogenous fertilizer.

3/ Refining petrochemicals and petroleum products.

4/ Renewable energy.

The legal basis, internal regulations were focused to research, modify and improve as Petroleum Law, 69 law, Regulations on the petroleum domestic management and management of petroleum contracts.

At present, there are 23 chains deployed and researched by the PVN member units including 7 chains implemented and 16 chains researched for deploying. Among them there are 4 chains under E&P and E&P Service block, 9 chains under Gas - Electricity – Fertilizer block, 8 chains under the Refinery and Petrochemical and gasoline block and 2 chains under Renewable Energy block. Besides, a number of units, as PV GAS, PV Power, BSR, PV OIL, PTSC, PV Chem proposed to develop the chains.

Based on cooperation between the units in produce and business for effective using labor resources, experience, property and machinery of the units to bring into play the competiveness ability and promote market share with main force products and services of PVN, the units deploy cooperation and develop the investment link chains (at present there 17 investment chains). The investment link cooperation between farther and member units as well as between the subsidiaries and affiliates in PVN is regulated in legal documents.

In the current situation, PVN directs two investment link groups with the group 1 in PVN competence including investment cooperation projects with a reasonable scale, considered and approved under PVN competence.

The group 2 includes the strategic chains ensuring sustainable development for PVN. The projects in this group have a large investment scale, complicated process and procedure for approving, so it is necessary to methodically study, assess and organize deploying and clearly assign task and schedule.

For implementing its goals to form, operate and develop investment link chains, PVN will deploy the following solutions:

1/ Early perfecting list of the strategic products and services for forming and developing synchronous link chains with development strategy of PVN and its member units.

2/Developing project of PVN link chains, cataloging the value chains, forming ecosystem for each field.

3/The units assess the achieved results, optimize/ expand scale, improve benefits of the participating sides in the deployed chains.

4/Reviewing, selecting, developing the new chains for ensuring to actualize the investment value chains in 2023.

One of the important tasks in coming time is to speed up the digital transition for optimal allocating resources, exchanging information between the units. Driving preparation tasks and deploying link chains is periodic handing content between PVN and its subsidiaries for dealing with the obstacles and speeding up implementing process.

In conclusion, Mr. Le Manh Hung, PVN General Director said, deploying the link value investment chains is an innovation in common management for sustainable development of Vietnam petroleum industry in energy transition and promoting the competitiveness of the mainstay products and services of PVN in domestic and regional markets.

The PVN General Director requested to need in the coming time, continuing to systematically research, evaluate and review implementing the link chains and regularly monitor and inspect the management on value and supply chains. Putting tasks to deploy link value chain into the KPI (work efficiency index) evaluation regulations of the units in order to assess the effectiveness of the general management in PVN Group.