BSR has placed a particular emphasis on enterprise management, change management, and investment project promotion as key drivers of growth, contributing to the company’s aspiration to become a leader in Vietnam’s oil and chemical refining industry and a top energy company in the region.
Adopting a Modern Governance Model
BSR has been working with a professional domestic auditing firm to implement financial statement audits (FSAs) prepared according to IFRS (International Financial Reporting Standards). These are considered international FSA standards with criteria issued by the International Accounting Standards Board (IASB). The goal is to establish universal rules for uniform, transparent, and comparable FSAs worldwide.
The IFRS standard will assist BSR in enhancing its financial management capabilities, including analysis and decision-making, while staying up-to-date with new trends such as sustainability reporting, emission commitments, transaction occurrences, and risk management. It will also help investors more accurately determine the company’s value and facilitate positive effects on BSR’s rankings, making it easier to raise capital for the expansion of the Dung Quat Refinery. Adopting the IFRS standard is also a mandatory trend that needs to be implemented gradually to optimize work efficiency.
In September 2023, Fitch Ratings, one of the world’s three largest rating organizations, assigned BSR an initial rating of “BB” with a “Positive Outlook.” Shortly after, Fitch Ratings reassessed the company’s profile and upgraded BSR’s rating to “BB+” with a “Stable Outlook.” This milestone also strengthens BSR’s ability to raise capital in the international market and attracts the attention of domestic and international investors to future investment projects.
Prior to the rating, BSR underwent an extensive evaluation process with Fitch Ratings, which included data collection and interviews with the company’s leadership. The rating assessment was conducted independently and objectively, following Fitch Ratings’ procedures and criteria, from January to September 2023.
According to BSR’s General Director, Mr. Bui Ngoc Duong, “The credit rating results from a leading international organization will serve as a valuable assessment tool for domestic and foreign investors when considering investment decisions with BSR. Proactively engaging in the Fitch Ratings evaluation demonstrates BSR’s commitment to potential investors regarding operational efficiency, responsibility, and compliance with legal obligations.”
BSR also collaborates with consulting firms to develop a comprehensive risk profile for the Board, aiming to enhance governance, improve management effectiveness, and strengthen risk control in its business operations. This is a key focus for BSR in 2024.
 BSR engineers have mastered oil and petrochemical refining technology
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Based on the published governance rules, BSR continues to refine risk profiles for functional boards and corresponding KPIs, moving towards a comprehensive governance system. BSR, along with its consulting partners, conducts reviews, learns from limitations, and builds on successful solutions. They also develop plans to strive for the timely completion of projects.
Additionally, BSR continues to promote its corporate culture, integrating risk management with training and cultural propagation across functional boards and all employees and workers at BSR.
To optimize governance and facilitate business operations, BSR has accelerated digital transformation and embraced the achievements of the Fourth Industrial Revolution. Since 2016, BSR has implemented a performance measurement system with over 500 KPIs. Moreover, the optimization of the Dung Quat Refinery, through the adjustment of the control system and the implementation of a multi-variable control system, has resulted in cost savings of approximately 12 million USD for BSR.
The comprehensive digital transformation in business operations has also yielded significant results for BSR. The company has developed and implemented a “Digital Office” solution comprising 15 integrated subsystems. They have also deployed and officially operated the first phase of an enterprise resource planning (ERP) system, including financial and management accounting, procurement management, hydrocarbon and non-hydrocarbon inventory management, distribution and sales management, system integration (SOA), and an ESG system that measures the company’s sustainability and impact on the community.
Additionally, BSR has implemented a high-performance working solution based on Microsoft 365 for all employees. The company has also intensified the utilization and improvement of smart, integrated production and maintenance management systems, as well as developing a range of in-house systems. These include a visualization system for real-time reporting on production, maintenance, commerce, human resources, and tasks, and a system for COVID-19 declaration and control for employees, contractors, partners, and customers.
At the Core of the National Oil and Petrochemical Refining Center
Embracing modern governance practices has not only strengthened BSR but also served as a driving force for the company to become the nucleus of the National Oil and Petrochemical Refining Center in Central Vietnam.
To achieve this goal, BSR, in collaboration with the international consulting firm Boston Consulting Group (BCG), headquartered in the United States, has developed a strategic plan for BSR’s development until 2030, with a vision towards 2045. This strategy aims to build and grow the company in alignment with the strategies of the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Industry, the Sustainable Development Strategy for Vietnam’s Marine Economy, the National Energy Plan, and the country’s Socio-Economic Development Strategy. It also ensures synchronicity, efficiency, and sustainability while enhancing BSR’s competitiveness in the domestic and regional markets, contributing to energy security and actively supporting the achievement of Net Zero by 2050, with a strong commitment to the community, society, and the environment.
 The Dung Quat Refinery serves as the core in establishing the National Oil and Petrochemical Refining Center in Central Vietnam.
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Regarding the driving forces, BSR recently adjusted the expansion project for the Dung Quat Refinery. This project aims to increase the refinery’s processing capacity from 148,000 barrels per day to 171,000 barrels per day, with products meeting the EURO V standard, in line with the government’s mandatory environmental roadmap. It also enhances crude oil flexibility and ensures a long-term and efficient crude oil supply for the refinery.
Mr. Nguyen Van Hoi, Chairman of BSR’s Board of Directors, shared, “Resolution No. 26-NQ/TW dated November 3, 2022, of the Politburo on ‘Developing the economy and ensuring national defense and security in the North-Central and Central Coastal regions by 2030, with a vision to 2045’ directs the Dung Quat Refinery to be the nucleus in establishing the National Oil and Petrochemical Refining Center in Central Vietnam. BSR will leverage this opportunity to assess investment prospects, capitalize on existing infrastructure, and stay ahead of emerging trends. We will utilize the Dung Quat Refinery as a pivotal point for the development of the petrochemical and energy industries.”
In the medium and long term, BSR will continue its journey to implement petrochemical and energy projects, which will serve as new growth drivers for the company.
BSR also places a strong emphasis on research and development (R&D). From 2014 to the present, BSR’s R&D efforts have generated additional revenue of approximately VND 4,000 billion through technological solutions and production optimization. Therefore, the establishment of a Research and Development Center will be a foundation for applying technological solutions to production and a key focus of BSR’s governance in recent years.
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