On December 27th, 2016, in Hanoi, PetroVietnam Exploration Production Corporation (PVEP) organized the Conference on 2016 Operations Review, Realization of Plans in 2017 and Workers Conference. By building on workers' unity, passion, knowledge and love for the job, PVEP overcame enormous challenges in an extremely difficult year, safely conducted business operations and completed its set annual extraction target 30-days ahead of schedule, helping to ensure financial stability for PVEP and job and income security for staff as well. 
In attendance at the Conference were Mr. Tran Van Duong, Deputy Director General of the Department for Industry – Government Office; Mr. Tran Thanh Tung – Director General of Department for Oil and Gas Exploration and Exploitation - General Department of Energy, Ministry of Industry and Trade. PetroVietnam saw the attendance of Mr. Nguyen Vu Truong Son – CEO; Ms. Nghiem Thuy Lan - Chief Stewardess of PVN Workers Union, and other Mr. leaders, members of the Board of Directors, the Executive board, departments, and PVN's Youth Union. 
From PVEP, Dr. Hoang Ngoc Dang – Secretary of the Party Committee, Chairman of the Board of Director; Dr. Ngo Huu Hai – CEO; Mr. Nguyen Van Cu – Chief Steward of PVEP's Workers Union, and leaders of PVEP and over 300 key staff, representing exemplary models, outstanding workers of PVEP were in attendance through teleconference in Hanoi, HCMC and Su Tu Trang Platform.
Reporting on 2016 operations, directions and tasks for PVEP's Party Committee in 2017, Mr. Hoang Ngoc Dang took stock of the operations of Party cells: leading the charge in fulfilling political tasks, recruitment for the Party, supervision and monitoring of Party members, proselytizing and assuming leadership in unions and associations... were all successful and saw positive developments, closely aligned with the directives of PVN Party Committee; resolutions and action plans were in accordance with the realities that PVEP's Party Committee have passed such as Resolution No. 132-NQ/TV, Action Plan No. 133-CT/ĐU. Faced with enormous pressures to the existence of the company, the role of the key leadership in setting the example, and the spirit of determination to carry out actions and solutions, building on the role of Party cells and units in maintaining political consensus have helped all Party members, employees and staff to have peace of mind to continue their work, keep the faith in the future of development of PVEP. As Secretary of the Party Committee and Chairman of the Board of Directors, Mr. Hoang Ngoc Dang put forth objective assessments and highlighted learned lessons in carrying out PVEP's investment projects and also made recommendations, suggestions about PVEP's strategic vision, and future steps for investment projects in the current situation. 

PVEP Chairman Hoang Ngoc Dang speaking at the Conference

In his report on 2016 operations, directions and tasks for PVEP in 2017, Mr. Ngo Huu Hai – CEO of PVEP clearly outlined the efforts and solutions that have helped PVEP to overcome the most difficult time in PVEP's history, with concrete results to showcase the determination of the leadership and all employees. The CEO noted that prolonged low oil prices, a result of global oil oversupply, which reached a 13-year low (26.55USD/barrel on Jan. 20th, 2016) was the biggest challenge to PVEP and international oil and gas companies. Concurrently, oil and gas services prices did not see dips commensurate with the fall in oil prices. This lead to increased average costs staying higher than market sales price. In addition, PVEP's ability to mobilize finances was not solid; the lack of investment procedures and capital caused PVEP to be unable to carry out its financial pledges as per oil and gas Contracts and joint venture agreements. The numerous legal documents directly regulating exploration and exploitation containing numerous incompatibilities with the realities of the domestic and international oil and gas sector further compounded the problems posed by strict financial regulations in the face of unfavorable oil prices. Of note is the requirement that exploration companies be taxed based on the sale of oil from all projects, regardless of profits gained. 

CEO of PVEP Ngo Huu Hai providing guidance for operation at a project 

Despite the numerous difficulties, in the spirit of – “Working together to overcome difficulties, consensus of vision, sharing a final goal”, PVEP leadership took the initiative in recommending solutions to leaders at different levels to timely resolve obstacles, while proactively trying to resolve issues by relying on itself. 
Issues related to investment, production management, operation, organizational structure, financial management... were scrutinized by PVEP leaders and subsidiaries to agree on strong, positive solutions. PVEP made amendments to 138 management processes; effectively maintained its KPI system and othe corporate governance tools, particularly utilizing its staff to develop internal tools such as the governance reporting tool iBoard…; develop a working environment that is democratic, transparent, professional and unique. 
Faced with pressure to balance its cahs flow as a result of the negative impact of low oil prices, PVEP have put forth many solutions, most notably conducting business operations according to different oil price scenarios (closely following real life fluctuations) and changing management mentality, giving highest priority to finances, with secondary priorities for extraction and exploration. 
As such, PVEP have cut costs across the board, optimized operations; ensured projects' liquidity and cash flows; making recommendation and presenting solutions for the short and long-term, forming ad-hoc groups to work directly with government agencies to resolve immediate and long-term obstacles to exploration and extraction activities, particularly those related to financial mechanisms. 
With the aim of reducing production costs, PVEP conducted negotiations with service providers to cut costs to be more in line with market conditions and oil prices. Total costs saved since 2015 have reached a total of 232 million USD, 57 million USD in 2016 alone. PVEP also entered into talks with banks to reduce loan interest rates, resulting in savings of about 140 billion VND.
Application of R&D in 2016 also saw positive results. 15 initiatives, 8 solutions helped save 71.5 million USD for the company. Cutting administrative and travel costs, implementing Green office solutions also saved nearly 63 billion VND. 
Under the close guidance of the Government, the Ministry of Industry and Trade and PVN, the efforts, unity, and the fact that both PVEP' leadership and staff were of one mind one heart, PVEP's operations in 2016 was safely conducted, production quotas were completed on December 1st, 2016, total production for the year exceeded the target set by both the Government and PVN to reach 5.55 MTOE, roughly 108% of set plan, including 4.23 MTO, 1.317 million m3 gas. Total capital remains at 79.508 trillion VND; total revenue 30.937 trillion VND; tax contribution totalling 7.688 trillion VND.
Despite steep cuts to operating costs, and the salaries of employees were reduced as well due to PVEP's finances, the company was still able to maintain and promote social welfare, community activities through the fulfillment of tens of social welfare programs at various localities, launched drives to support victims of floods, among other programs aimed at helping children, poor students and charity, social events. 2016 also saw a host of successful emergency rescues, helping fishermen to assert ownership of Vietnam's maritime boundary as PVEP's commercial units maintain operations in the South China Sea. 
With these achievements, 2016 marked the 7th consecutive year PVEP is among the Top 10 companies (out of 1000) with the largest tax contribution to state coffers. The Company also received many meaningful prizes: Enterprise with Good Corporate Social Responsibility award; Best Enterprise for Employee, Top Brand, Green Brand... at the Conference. Many of PVEP's outstanding individuals, units, and authors of initiatives and ideas received recognition and awards. 
Speaking at the Conference, Mr. Nguyen Vu Truong Son – CEO of PVN held in high regard and commended the efforts that PVEP's staff have made to fulfill their mission and set production targets. In turn, PVEP continues to make important contributions to production targets and revenues to PVN's annual goals and for the national economy. Empathizing with the challenges that PVEP faces, the CEO also suggested that PVEP's leadership and core staff aside from effectively carrying out solutions to reach targets set for 2017, continue to conduct research, make improvements to the system to adapt to market fluctuations and ensure sustainable development in the long term. 

PVN CEO Nguyen Vu Truong Son speaking at the Conference

In response to the emulation campaign launched by PVEP's Union, Dr. Ngo Huu Hai - CEO of PVEP and the leadership of subsidiaries, joint ventures together signed a pledge to fulfill production targets for individual business unit in 2017.

CEO of PVEP and leaders of other business units sign the emulation pledge for 2017

At the Workers' Conference, the report of the Corporation's union, representing workers concluded that workers' contracts and specific terms were honored according to Government regulations. Despite numerous difficulties, with a much smaller budget for salary, bonuses and social welfare were cut, leading to much lower income for employees, and certain welfare funds being foregoed, the Corporation was still able to maintain unity of hearts and minds in all policies and directives to record more impressive business results. 
At the Conference, Chairman and CEO of PVEP personally fielded questions from staff, not many of them easy to answer and provided persuasive explanations. 
In carrying on the traditions of the previous generation of "fire-seekers", in the spirit of "Working together to overcome difficulties, consensus of vision, sharing a final goal" surely PVEP will always be ready for new challenges, determined to overcome all difficulties, and view them as drivers for a new development process, allowing PVEP to continue to enjoy stable development, deserving of its role as the key business unit for PetroVietnam, contributing ever more to the development of the oil and gas industry and the national economy. 

From: PVEP