Vietnamese oil and gas giant PetroVietnam is about to shrink production or even cease exploration at four of its oil fields as their expenses have already surpassed prices.

Nguyen Xuan Son, chairman of the board of members of the state-run company, said Tuesday at a meeting in Hanoi that PetroVietnam will lower – or even stop – the exploitation of oil fields where expenses are greater than oil prices to avoid losses.

The average exploration cost of PetroVietnam, fully known as the Vietnam Oil and Gas Group, is US$30-37 a barrel, whereas at four of its oil fields the figure is now more than $60 a barrel, Son said.

“Once the oil price dips to $60 a barrel, we will cut production at these four fields,” Son said.

“As per the cost-effective policy, production at fields with big expenses should be cut to keep the natural resources.”

U.S. crude benchmark West Texas Intermediate for February delivery on Tuesday lost $1.12 to finish at $53.61 a barrel after the morning session in New York, the lowest since May 2009, according to Reuters.

The four costly oil fields have total reserves of only 450,000 tons, which Son said is not a particularly large figure.

PetroVietnam will also consider stockpiling crude oil, he added.

The company will seek to buy other oil fields it deems “effective projects,” the chairman said.

“While we used to be financially unable to do so, the purchase of effective projects is now feasible.”

Le Hoang Quan, Chairman of Ho Chi Minh City, also proposed on Monday that the government consider stockpiling more crude oil in case the global oil situation worsens.

“We can suspend or reduce crude oil exploration and production and stockpile oil along with foreign exchange reserves, as oil is a very important material for production,” he said at an online conference between the central government and localities nationwide.

The slumping oil price has lowered fuel prices in Singapore, where Vietnam imports most of its fuel from.

Gasoline imported from Singapore currently fetches $65.68 a barrel, or VND8,776 a liter. The retail price in Vietnam is VND17,880 a liter.

The total cost price of gasoline, with all taxes and fees counted, is currently VND300 lower than retail price, making another price reduction possible.

Vietnam has adjusted fuel prices 12 times this year, with 12 cuts in a row from July 18. The last fuel price adjustment of the year fell on December 22.

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