Vietnam's 2021 crude exports drop 33% but higher 2022 upstream output, sales seen

Vietnam's crude exports fell in 2021, as state-wide lockdowns and movement restrictions hampered key oil terminal and port operations in the year, but the Southeast Asian producer's upbeat upstream output will likely lead to a revival in sweet crude and condensate shipments in 2022, industry and trading participants said.

Vietnam exported 218,111 mt, or 51,573 b/d, of crude oil in December, down 17% from a year earlier, while the full year 2021 exports fell 32.8% to 3.13 million mt, latest data from Vietnam Customs showed.

Thailand, Australia and China were the major buyers of Vietnam's crude oil throughout 2021.

Shortage of manpower at key export terminals and trading operation offices due to a series of strict social distancing and movement restriction measures have led to slow overseas sales of domestic crude overall in 2021, a marketing and trading manager at state-run PetroVietnam told S&P Global Platts.

"Still, Vietnam's upstream investment and activity kept up its pace and the country's crude sales will likely rebound in 2022 as many Asian refiners are keen to procure regional sweet crude spot cargoes in times of tight OPEC and global supply situation," the PetroVietnam source added.

PetroVietnam said its crude oil production last year was 10.97 million mt, up 1.25 million mt from the company's initial 2021 target.

Taking full advantage of the upbeat production and easing logistical operation hurdles in recent weeks, PetroVietnam's trading arm PV Oil has been active in spot cargo sales early in the year.

PV Oil fetched strong premiums for February-loading crude cargoes. The state-run trading firm sold 300,000 barrels of medium sweet Bunga Orkid crude for loading in Feb. 20-26 to a Northeast Asian refiner at Dated Brent plus $5.10/b, Platts reported previously.

PV Oil was also said to have sold a 250,000-barrel cargo of Thang Long crude for loading in March 6-10 to a Western trading house at a premium of around $3.50/b to Dated Brent.

Meanwhile, Vietnam-Russia joint venture Vietsovpetro also announced that it was estimated to have produced 3.16 million mt of crude oil and condensate in 2021, surpassing its target by 165,000 mt.

Vietsovpetro conducted at least four exploration and appraisal activities at Block 09-1 in 2021, which houses Vietnam's flagship oilfield Bach Ho, adding a reserve of 2.2 million mt oil, the company said.

The JV said it also discovered some oil and gas reservoirs of industrial value while drilling at Block 16-1/15 in Cuu Long in early 2021.

In 2022, the company plans to produce minimum 2.9 million mt of crude oil and condensate, including 2.8 million mt from block 09-1.

Feedstock imports

Meanwhile, Vietnam imported 1.098 million mt of crude oil in December 2021, up 13.96% from a year earlier with most of the shipments coming from Kuwait.

In 2021, the country imported 9.94 million mt of crude oil, 15.4% lower year on year, the customs data showed. Imports from Kuwait fell 8.8% in 2021 to 8.76 million mt.

The Kuwait barrels were for the 200,000 b/d Nghi Son refinery in the central region which began commercial operation in November 2018.

State-owned PetroVietnam has a 25.1% stake in Nghi Son, with Kuwait Petroleum International (35.1%), Japan's Idemitsu Kosan (35.1%) and Japan's Mitsui Chemicals (4.7%).

Vietnam's crude exports (Unit: mt, unless specified otherwise)

*Total includes other outlets

Source: Vietnam Customs