PV Drilling Maintaining Leadership in Oil & Gas Industry

2:22:30 PM | 8/10/2019

As an industry leader in oil and gas drilling and well services, PetroVietnam Drilling & Well Services Corporation (PV Drilling) has experienced ups and downs in operation. Vietnam Business Forum Magazine has an interview with Mr. Pham Tien Dung, Chairman of the Board of Directors of PV Drilling, on this topic. Anh Dao reports.

Since it went public and floated its shares on the stock market in late 2006, PV Drilling has achieved impressive growth. Could you tell us more about it?

After more than 17 years of development, from a mechanical workshop specialized in repairing drilling equipment and providing oil spill response services, PV Drilling has now become a drilling contractor - a pioneer in oil and gas drilling industry, powered by a modern fleet of four new-generation jack-up rigs, one semi-submersible tender assist drilling (TAD) rig and one land rig; a strong force of more than 2,000 highly skilled and professional employees together with advanced technical machinery and equipment to perform a variety of drilling services, including cutting-edge services. These capabilities have empowered PV Drilling with sharp competitive edges of a world-class driller capable of delivering full package services for customers. Hence, PV Drilling has quickly seized the domestic market share of drilling services and related technical services notwithstanding fierce competition from foreign competitors. The corporation was named the Best Asian Drilling Contractor in 2012, 2013 and 2015.

Proportional to the robust growth of its brand name, PV Drilling’s revenue and profit have impressively increased. Its revenue and net profit surged to VND20,884 billion and VND2,419 billion in 2014. Its Compounded Annual Growth Rate (CAGR) in revenue and profit was 34% and 23% in 2007 - 2014, thus bringing stably high returns to its shareholders. From its inception to 2018, PV Drilling achieved total revenue of VND108,223 billion, a net profit of VND12,135 billion, a tax value of VND16,526 billion, and total assets of approximately US$1 billion. The corporation’s registered capital is now VND3,833 billion. With its impressive achievements, PV Drilling is rated as one of the best business performers affiliated to the Vietnam National Oil and Gas Group (PetroVietnam) and is among the biggest taxpayers to the State Budget.

In its development history, the most striking milestone of PV Drilling was in 2006 when it transformed from a State-owned enterprise into a joint stock company and became the first oil and gas company to list its shares on the Hochiminh Stock Exchange (HOSE). From this turning point, with its focused development strategy on high-quality oil and gas technical services, PV Drilling boldly invested in and took over PV DRILLING I platform in early 2007, becoming the first 100% owner of offshore jack-up rig in Vietnam. Following the success of PV DRILLING I, PV DRILLING II and PV DRILLING III jack-up rigs were launched in 2009, and PV DRILLING VI was also put into operation in early 2015. Apart from jack-up rigs, PV Drilling decided to join forces with PetroVietnam Group and other partners to invest in the semi-submersible TAD drilling rig - PV DRILLING V in late 2009, bringing to Vietnam the most modern advanced TAD rig and open a new development path for deep-water drilling since the end of 2011. In addition, PV Drilling has cooperated with many well-reputed, capable foreign partners such as Baker Hughes Nederland Holding B.V, BJ Services International S.A.R.L, Expro International BV to establish joint ventures that develop high-tech oil and gas services.

In addition to investing in drilling rigs and modern machinery and equipment, PV Drilling puts a premium on technological powered corporate management system and fulfils rapid integration requirements to sharpen its competitive edges against foreign service providers. Consistently applied standards and systems have improved service quality and built up customer confidence by adopting drilling service standards of the American Petroleum Institute (API), HSEQ management standards applied under OHSAS 18001:2007, ISO 14001:2004 and ISO 9001:2008 standards; equipment incident management and maintenance system (RCM); and enterprise risk management system (ERM).

Notably, during the tough period from 2016 to date, while many big drillers in the world went bankrupt and merged, PV Drilling have managed to maintain stable operations of drilling rigs, sought and utilized every opportunity to improve rig performances, especially in foreign markets. The corporation’s business operations have still produced positive cash flows and cemented the trust of shareholders and investors

PV Drilling is known as a pioneer that promotes international cooperation and brings drilling services to foreign markets. Could you please tell us more about your overseas projects?

Right from the early days, in addition to building and consolidating its position as “Pioneers of Vietnam drillers”, PV Drilling has been constantly expanding international services, making it a long-term and important development strategy in line with PetroVietnam Group’s overseas expansion goals.

PV Drilling-branded international projects include PV DRILLING 11 land rig, which drove the first drill on the Sahara Desert (North Africa) on September 18, 2007. PV DRILLING 11 is still operating in Algeria and has always been rated as the best-performing, fastest-drilling rig with many records of drilling depths and speed along with operational safety and performance records.

In 2016, PV DRILLING I jack-up rig successfully beat 30 drilling rigs of 10 world-leading drillers to win the Myanmar drilling bid offered by Total E&P Myanmar. In 2017, PV Drilling marked its presence in Thailand and Malaysia by providing PV DRILLING I rig for KrisEnergy in Block G10/48 (Gulf of Thailand) and PV DRILLING III for Petronas Malaysia in October 2017 and then for Repsol Malaysia with a long-term contract until 2021. PV DRILLING VI rig also had a contract with IPC of Malaysia at the same time with PV DRILLING III rig. Following the overseas dispatch of drilling platforms, all its four jack-up rigs (PV DRILLING I, II, III and VI) are expected to work in a long term for customers in Malaysia like Repsol, Sapura, Hibicus and Petronas from the fourth quarter of 2019.

In addition to developing offshore drilling services, PV Drilling also supplies manpower (PVD Offshore) for offshore drilling rigs such as Trident 9 (Singapore) & Trident 16 (Malaysia) of Transocean, WillBoss of Premium (the Philippines), and Doosung (Korea); wellhead installation service for Nido Company in the Philippines; mud logging services, oil tools rental services, OCTG services, and inspection, maintenance and workshop services for some Southeast Asian markets such as Myanmar, Thailand, Malaysia, and Brunei; fabricating and repairing services (PVD Tech) or manpower export (PVD Training) for big markets such as Japan and Myanmar.

The continuous winning of drilling rig supply and offshore well service contracts is a testament to the right strategy of PV Drilling's leadership and an affirmation to the corporation’s capacity and reputation in drilling and well services in the international market.

Given optimistic signals on the drilling market, what is the focus of PV Drilling’s long-term plans and vision for the future? As the Chairman of PV Drilling's Board of Directors, how will you continue to lead PV Drilling to keep on the trailblazing flame of Vietnamese oil and gas industry?

In the long term, PV Drilling will continue to pursue its long-term strategy launched since 2013 to expand its overseas market share. Besides traditional markets like Myanmar, Thailand, Malaysia and Brunei, in the coming time, PV Drilling will join bids to deliver drilling rigs and well technical services in Australia, Indonesia and the Middle East. We also closely monitor and prepare for domestic drilling projects to deliver our services.

On September 24, 2019, PV Drilling signed a contract to supply semi-submersible rig, PV DRILLING V, for Brunei Shell Petroleum Company Sdn Bhd (BSP). The 6-year contract, with two extension options for each 2 years, starting from April 1, 2021, serves BSP's drilling program in Brunei. To have this strategic drilling deal, PV Drilling passed rigorous technical and operational appraisal of BSP and beat well-known competitors in the world. BSP’s contract with PV DRILLING V rig not only proves PV Drilling's capabilities in the international market but also employs PV DRILLING V rig. The success is greater because this is the longest deal undertaken by PV Drilling. This is considered a platform for service development in Brunei in the near future.

With service quality, high performance and competitive prices, PV Drilling promises to have new development steps in the future to realize the vision of becoming a reliable and prestigious drilling and well service provider in the world.

I am lucky enough to have been with PV Drilling for many years. I am glad to be part of the robust development of PV Drilling and I will work hard with the Corporation to achieve new goals and hold the pioneering flame in Vietnam's oil and gas drilling and well service industry. As the Board Chairman, I will work hard with the Board to outline development orientations and strategies for the Corporation, support and advise the Board of Management to run business operations according to the guidelines of Vietnam National Oil and Gas Group.

In addition to business development efforts, how has PV Drilling performed its responsibilities to the community, the society and, above all, to the country?

I believe that every business active in Vietnam wants to build and contribute to the country, the community and the society. And, PV Drilling is no exception. With more than 17 years of development, PV Drilling always upholds its sense of responsibility to the community and the society, and spends a significant amount of money for community development. With the goal of “inclusive development and dedication to the community for long-term wellbeing”, we expect our practical activities will help promote an increasingly developed society and a more civilized community.

It is respectable and admirable that PV Drilling always holds its trailblazing spirit whenever or wherever it is represented, not only on offshore drilling rigs but also to the society and community.

PV Drilling’s leadership has carried out various social security programs, mainly engaged in education, training, public healthcare, maritime sovereignty, new countryside construction and other social welfare and gratitude activities across the country. Remarkable activities included building clinics, supporting the poor and building schools. In the past years, many social security activities have been launched by PV Drilling in Ha Giang, Lao Cai, Thai Binh, Nam Dinh, Quang Nam, Quang Binh, Quang Tri and other localities. The total budget amounted at nearly VND300 billion. In many localities, after being supported, people's lives have been improved, children's education has been sustained, public medical examination and treatment has been upgraded; and hundreds of children have been granted heart surgeries by PV Drilling. Social activities are not only PV Drilling's corporate social responsibility but also the way the corporation is inspired to make greater efforts in its business activities, contribute more to the society, improve the living environment and develop the country.

Believing that fulfilling tax obligations to the State Budget is also the business ethics and social responsibility, PV Drilling always abides by the law in all activities and fulfills tax obligations to join hands in national and local economic development. That is why PV Drilling is always among the biggest taxpayers in the country.

Deeply aware of environment protection, PV Drilling’s business operations are always based on sustainable development by continuously improving the ISO-standard environmental management system, bettering the working environment, further enhancing the rational use of resources, implementing programs to reduce emissions, save energy, manage and treat waste at production facilities.

Thank you very much!