Vietnam, Russia oil joint venture to cut 2,000 jobs in next 5 years
Vietnam, Russia oil joint venture to cut 2,000 jobs in next 5 years
Vietsovpetro is cutting 2,000 jobs in the next five years, according to newswire vneconomy.
Tu Thanh Nghia, general director of Vietsovpetro, was quoted as saying that the company would soon submit to PetroVietnam a plan to cut its headcount.
According to Nghia, the Russian side asked Vietsovpetro to reduce the headcount to under 5,000. As of now Vietsovpetro is employing 7,200.
Nghia said Vietsovpetro has been restructuring itself for the past year. In 2014 it cut 200 job titles. In 2015 it cut 400.
“Vietsovpetro’s cutting its headcount is going to help increase its competitiveness to deal with the falling oil price,” Nghia said.
He also said that Vietsovpetro is in financial difficulties, specifically, Vietsovpetro was really in need of capital, and it may run out of cash in April.
In Nghia’s opinion, as oil price is falling, Vietnam should continue the exploration of oil, but it should close some fields.
“For fields with high operating cost, high breakeven price, we are losing if we keep operating them,” he said.
Vietsovpetro is a joint venture between PetroVietnam and Russia’s Zarubezhneft. It’s the biggest oil joint venture in Vietnam with revenue of $66 billion as of mid-2015. In a recent interview with Petrotimes, the mouthpiece of PetroVietnam, Nghia said 2015 was a difficult year for Vietsovpetro when the average price of oil decreased from about $100 per barrel in 2014 to about $55 per barrel in 2015.
According to Reuters, oil prices jumped on Monday following steep losses in the previous session. Specifically, US crude futures rose over 3 per cent to above $30 per barrel, trading at $30.59 at 0809 GMT while international benchmark Brent was also up 2.4 per cent at $33.83 per barrel.
