26/03/2019 09:44 GMT+7 Email Print Like 0

Binh Son Refining becomes PVN’s largest State budget contributor

Binh Son Refining and Petrochemical Co Ltd (BSR) contributed more than 11 trillion VND to the State budget in 2018, becoming one of the units under PetroVietnam with the largest contribution to the State budget.

BSR is a subsidiary of Vietnam National Oil and Gas Group (PetroVietnam, PVN) and operator of the 3 billion USD Dung Quat Oil Refinery in the central province of Quang Ngai – the first oil refinery in the country.

According to BSR’s audited consolidated financial statements for 2018, the company produced and sold more than 7 million tonnes of products, with revenue reaching over 112 trillion VND (5.13 million USD) and profit totalling 3.6 trillion VND.

During the year, BSR’s mid-year assets were more than 60.6 trillion VND while the figure at the end of the year was nearly 51.9 trillion VND.

Notably, liabilities decreased from 29.6 trillion VND to 20.6 trillion VND and equity increased from 30.95 trillion VND to 31.3 trillion VND.

Last year marked many important events for BSR. The company was the first affiliate of PetroVietnam to successfully launch an initial public offering (IPO) on January 17 on the Ho Chi Minh City Stock Exchange with over 242 million shares.

All shares were sold and BSR collected 5.42 trillion VND via the sale, 53.5 percent higher than expected.

On March 1 last year, BSR shares were listed on the Unlisted Public Company Market (UPCoM). On June 21, BSR successfully organised the first General Meeting of Shareholders and officially changed itself to a joint stock company on July 1.

However, BSR also revealed that after successfully transforming into a joint stock company, the company faced many difficulties, one of which was the fluctuation of world oil prices.

Dated Brent dropped from 86.16 USD per barrel on October 4, 2018, to 50.21 USD per barrel on December 28, causing prices of the company’s products to decline. For example, due to declining global oil prices, Mogas 92 dropped from 91.81 USD per barrel to 53.78 VND per barrel.

The volatility of crude oil prices is detrimental to all oil refineries, including petroleum trading and distribution units.

As being an oil refinery operator who has to continuously produce and process oil products, BSR must maintain a constant amount of crude oil and need a certain period of time to process crude oil to change it into final products for sale. This means that when the prices of crude oil and oil products decrease, the costs of inventory will be affected, rising higher than the market prices.

In order to respond to the unpredictable changes of global oil prices, BSR has actively applied many new flexible solutions, one of which is operating Dung Quat oil refinery safely and stably at 107 percent of designed capacity.

The company has also promoted sales, reducing crude oil and oil product inventories to an optimal level, while applying energy and technology solutions.

BSR has also thoroughly implemented the solutions to enhance the control of consumption norms, optimise production, save costs, promote scientific research and improve technical infrastructure.

As a result, BSR has minimised the impact of the market and achieved business and production targets in 2018, of which the target of output was achieved 38 days ahead of schedule.

BSR ranks 7th in the list of Vietnam’s largest enterprises. It was also named 14th in the list of Vietnam’s 500 most profitable enterprises.