Vietsovpetro has been strongly hit by the oil crash. (Photo: Internet)
Vietsovpetro, a joint Russian-Vietnamese firm for oil and gas exploration, is currently cash-strapped and is mulling ceasing pumping from some of its wells and fields as the oil market remains bearish, the Nang Luong Moi (New Energy) newspaper cited General Director Tu Thanh Nghia as saying.
“[We] should close drilling platforms and well that have too high operating costs or break-even points. [We] shouldn’t attach importance to the output because some oil flows cost us too much,” he said.
“If oil prices continue nosediving, we need to close wells and fields, otherwise losses will be larger.”
He warned that Vietsovpetro will run out of cash to cover its expense this April as it now has $75 million in cash stuck at a place that the newspaper did not specify.
However, Mr. Nghia advocated increasing survey and exploration activities in the context of lower oil prices and service fees.
The executive tipped that the Russian side [JSC Zarubezhneft] had asked the company to cut down its staff by 5,000 in the coming five years from 7,200 presently, aiming to tackle the plunge of oil prices.
Prices of the benchmark Brent crude have tumbled by 44% year-on-year as of February 11, 2016 and 75% from early 2013, according to a recent Fitch report.
Vietnam and Malaysia are among Asian countries that bear the major brunt of the ongoing oil plunge while Thailand, Korea and Sri Lanka are the largest beneficiaries, the credit rating agency said.