Vietnamese drilling firm sees profits sink to record low in 2016

The company's oil rigs have been sitting idle as demand dries up.

PetroVietnam Drilling and Well Services Corporation (PV Drilling) said the significant decrease of crude oil prices caused its revenue to fall sharply last year, leading to record-low after-tax profit of VND120 billion ($5.26 million), down 14 times against 2015.

In its latest financial report, PV Drilling said global crude oil prices dropped to under $30 per barrel at times last year, seriously affecting its business.

The firm generated VND5.36 trillion ($235.20 million) in revenue during 2016, falling VND9 trillion ($394.92 million) from the previous year.

Due to low oil prices, many firms cancelled orders, leaving only 46 percent of oil rigs in use the year-round in 2016, the company said.

The cost of hiring oil rigs also went down by 55-60 percent compared to 2015.

According to the Maritime Securities Incorporation (MSI), if global oil prices continue their recovery, the demand for oil rigs will get back on track.

In addition, the MSI predicted that 75 percent of PV Drilling’s oil rigs will be put back into service this year after the firm secured several projects with the Vietnam Oil and Gas Group (PetroVietnam), its biggest shareholder with a 50.46 percent stake.

The firm's major businesses include drilling and well services, oil-spill equipment, and acting as an intermediary for foreign companies.

By Phuong Dong