The stock market opened on June 13th amid a sea of red, with tensions in the Middle East escalating. However, the oil and gas sector surprised everyone with a remarkable rally. GAS, PVS, PVD, BSR, PLX, and PVT shares all surged, with most rising over 3%. This united surge is a rare occurrence for the energy sector in recent times.
The surge in oil and gas stocks was partly driven by the upward momentum in oil prices. Brent crude oil prices soared 9% to $75 per barrel, a two-month high, following Israel’s latest actions toward Iran. Oil prices have been on a strong upward trajectory this week, marking their best performance in over three years since late February 2022.
Supporting oil prices are EIA data showing that US crude oil inventories fell more than expected last week, indicating strong demand. Additionally, weaker US inflation has bolstered bets that the Fed will cut interest rates in September, potentially boosting economic growth and oil consumption.
In a recent analysis report, SSI Research anticipates that oil prices will average between $70 and $75 per barrel in 2025. Factors supporting oil prices include OPEC’s delay in reducing oil output, a better-than-expected recovery in the Chinese market, and/or faster-than-expected interest rate cuts.
In 2025, SSI Research expects improved earnings prospects for the oil and gas sector compared to 2024, attributed to enhanced E&P activities. BSR’s profits are projected to surge by 73% to VND 3,100 billion due to a 15% recovery in consumption volume post-maintenance in 2024, and stable crack spreads as some global refining capacity shuts down. PLX is forecast to achieve single-digit profit growth, benefiting from a 4% natural growth in consumption volume. GAS’s profits are expected to remain stable, as increased LNG production offsets depletion from traditional fields.
Meanwhile, upstream companies like PVD and PVS are anticipated to maintain their growth momentum, benefiting from robust E&P activities. These companies also stand to gain significantly from the Lot B project. SSI Research forecasts a steep rise of approximately 50% in PVD’s earnings, attributed to higher rig day rates and increased rig utilization. PVS is expected to post a 20% increase in profits in 2025, benefiting from higher income from EPC contracts for the upstream segment of the Lot B project, estimated at a total contract value of VND 1 trillion.
Additionally, SSI Research provides updates on significant projects within the oil and gas value chain:
LNG Terminal : The feasibility study for the expansion of Thi Vai terminal has been approved, aiming to triple its capacity by 2026.
The feasibility study for the Son My LNG project in Binh Thuan province has also been approved. The first phase of the project is expected to have a capacity of 3.6 million tons and will be completed by Q4 2027. The second phase will have a larger capacity of 6 million tons and is anticipated to be operational before 2030.
White Lion, Phase 2B : GAS is working with PVN and other stakeholders to develop the project and finalize the financial report/feasibility study.
Dung Quat Expansion : BSR has completed land compensation and is expected to finalize the technical design – FEED and select the EPC contractor in 2025. This project will increase BSR’s capacity by 15.5%, from 148,000 barrels/day to 171,000 barrels/day, to meet Euro B standards.
Lot B – O Mon Mega Project : PQOC (the owner of the upstream segment of the project) has awarded several EPC contracts for most of the upstream and midstream portions (including wellhead platforms, living quarters, and CPP, pipelines, and pipe coating) to PVS (along with partners) and PVB. As of the reporting date, EPCI #1 and EPCI #2 have reached 12.8% and 24.4% construction progress, respectively. Drilling work is expected to commence in Q1 2026, necessitating the completion of drilling contract tenders and signings in 2025.
The downstream segment (O Mon II, III, and IV power plants) has not started construction, and the final investment decision (FID) for the project has not been made by PVN, despite MOECO (one of the upstream investors, along with PVN and PTTEP) announcing FID in 2024. If the downstream segment is delayed, even though the first gas flow is expected in 2027, the entire project will have to wait until after 2027 to supply electricity to the national grid.
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