Oil and gas stocks see promising growth

Oil and gas stocks see promising growth

Over just two weeks, shares of companies such as PV Drilling (PVD) and PetroVietnam Technical Services Corporation (PVS) have surged by 20 per cent to 28 per cent, while Petrolimex (PLX) and PV Oil (OIL) increased by about 8-10 per cent.

A PV Drilling jack-up rig. — Photo pvdrilling.com.vn

Việt Nam's oil and gas sector is witnessing a notable resurgence, with expectations for continued growth in the fourth quarter of 2025.

Analysts believe that the attractive valuations of oil and gas stocks present an opportunity for investors as the sector positions itself as a bright spot in the market.

The oil and gas stocks have been on an upbeat trend since mid-October. Over just two weeks, shares of companies such as PV Drilling (PVD) and PetroVietnam Technical Services Corporation (PVS) have surged by 20 per cent to 28 per cent, while Petrolimex (PLX) and PV Oil (OIL) increased by about 8-10 per cent.

This resurgence follows the issuance of Government Resolution No. 66.6/2025/NQ-CP on October 28, which addresses challenges in the oil and gas sector. The resolution empowers PetroVietnam (PVN) to oversee certain approvals related to oil and gas operations, enhancing efficiency and expediting project implementation.

The third quarter financial results have also fuelled optimism in the sector. According to FiinTrade, the oil and gas industry reported a staggering 594.7 per cent year-on-year increase in profits after tax, driven primarily by companies like Binh Son Refining and Petrochemical JSC (BSR), up 175.1 per cent, PLX soared 441 per cent and PBS jumped 73.3 per cent.

Previously, oil and gas stocks had underperformed relative to the broader market due to negative sentiments surrounding oil prices and a lack of growth narratives.

However, recent positive performance indicators have made these stocks more appealing, especially compared to other sectors that have already experienced significant gains.

Currently, oil and gas stocks are trading at a median price-to-earnings (P/E) ratio of around 18x to 27x, which reflects a discount of 23 per cent to 47 per cent compared to the average valuation over the past five years. This makes them an attractive option for investors seeking value.

Upbeat expectations

Looking ahead, BIDV Securities (BSV) anticipates that the oil and gas sector will maintain its growth momentum. However, the brokerage firm notes that this growth may be driven more by cost recoveries, asset sales and currency gains rather than substantial increases in operational profits.

In 2026, BSC predicts a divergence among companies in the sector. Firms with strong backlogs and favourable contract terms, such as PVS and PV Drilling, are expected to continue growing, while other companies like PV Gas may face challenges due to high profit bases from previous years and insufficient LNG supply to offset declines in natural gas production.

PVS, for example, currently has a backlog of approximately US$2.5 billion, which includes significant projects like the Lô B - Ô Môn and Lạc Đà Vàng. Additionally, the company is expanding into renewable energy, indicating a strategic shift for long-term growth.

PV Drilling has secured contracts for its entire fleet through the end of 2026, with some contracts extending to 2028. The company is also investing in a new $90 million jack-up rig, expected to be delivered by mid-2026.

Analysts at SSI Securities view stocks like PVD and PVS as robust defensive options given their strong asset foundations and long-term contracts, while stocks sensitive to oil prices, such as GAS and BSR, require closer monitoring due to ongoing uncertainties in global supply and demand dynamics.

Overall, the outlook for Vietnamese oil and gas stocks remains positive, bolstered by long-term contracts and favourable market conditions. As investor confidence returns and liquidity improves, the oil and gas sector is poised to be a standout performer in the latter half of 2025. 

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