Vietnam-Russia oil and gas joint venture Vietsovpetro raked in US$1.684 billion in revenue in 2021, beating its target by 49 percent despite coronavirus-related setbacks, according to the company's general director Nguyen Quynh Lam.

Vietsovpetro exploited over 3.1 million tons of crude oil this year, approximately 105.5 percent of its target, Lam announced at a conference held on Wednesday to review the firm’s fiscal year and set new targets for 2022.

According to Lam, Vietsovpetro also produced 0.91 billion cubic meters of natural gas in 2021, 9.7 percent higher than planned.

Such success led to the joint venture contributing $922 million to the state budget over the course of the year, $317 million more than expected.

The company ended the year with a registered profit of $282.5 million, 73.2 percent higher than its target.

Such numbers came as a surprise to many given the challenges the COVID-19 pandemic has presented to the oil and gas industry over the past year, including issues with oil price fluctuation, risks of production chain disruption, and an increase in the cost of oil production supplies and equipment.

The company also embarked on an expansion plan over the past year, including the ahead-of-schedule completion of two oil rigs – BK-18A and BK-19 – which contributed to maintaining high production numbers despite oil supply chain disruptions caused by the epidemic.

Vietsovpetro also cut $17 million in overhead this year, 80 percent higher than its target, thanks to an effective cost optimization plan.

In 2022, the firm is targeting to produce nearly three million tons of oil and more than 65 million cubic meters of natural gas.

At a base oil price of $62 per barrel, the joint venture expects to achieve $1.31 billion in revenue from its oil sales, equating to $189.9 million in profit and an addition of $679.1 million to the state budget. 

Vietsovpetro also plans to continue building the RC-RB1 and RC-10 oil rig projects and expects to put them into operation during the last quarter of 2022, according to PetroTimes, an e-magazine produced by the Vietnam Petroleum Association. 

The joint venture was established in June 1981 in accordance with an intergovernmental agreement signed by Vietnam and the Soviet Union which called for cooperation in petroleum exploration and production on the southern Vietnamese continental shelf.

The Russian Federation took over the Soviet Union’s rights and interests in Vietsovpetro in 1993.

The company has been operating under an updated intergovernmental agreement signed between Vietnam and the Russian Federation on December 27, 2010 which dictates the continuation of cooperation in petroleum exploration and production in Vietnam.

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