UNIVERSITY OF ECONOMICS AND FINANCE
Subject: Capital Market
Topic: Military Insurance Company (MIG)
Members: Nguyễn Thục Quyên - 225025825
Lecturer: Nguyen Tien Trung
HCM City, …/…/2024.
I. Introduction
The Petrovietnam Technical Services Corporation (PTSC) was established in 1993 through
the merger of two subsidiaries under the Vietnam National Oil and Gas Group: the
Geophysical Company and the Petroleum Services Company. PTSC is a member unit of the
Vietnam Oil and Gas Group (holding a 51.38% stake) and is recognized as a leading
enterprise in providing technical services to the oil and gas industry in Vietnam.
PTSC currently offers seven main services that contribute to its total revenue as follows:

Provision of specialized vessels for the oil and gas sector.

Supply, operation management, and exploitation of FSO/FPSO floating facilities.

Mechanical and construction services (M&C) for the oil and gas industry.

Supply base services.

Transportation, installation, hookup, operation, maintenance, and repair (O&M) of oil
and gas structures.

Seismic surveys, geological engineering surveys, and inspections of subsea structures.

Other services.
The services provided by PTSC effectively meet the majority of needs arising during the
exploitation process of an oil field:
1. Oil field survey stage: Provision of seismic survey services.
2. Exploration drilling stage: Provision of vessels for transporting goods and
equipment between the shore and drilling platforms.
3. Oil field construction stage: Provision of installation services for drilling platforms.
4. Production stage: Provision of operation, maintenance services, and FSO/FPSO oil
carriers.
5. Decommissioning stage: Provision of dismantling services.
Company
Tax Code
Stock Code
PETROVIETNAM TECHNICAL SERVICES
CORPORATION
0100150577
PVS
Head Office
Tel
Fax
E-mail
Website
Date of Establishment
II.
PetroVietnam Tower, No. 1 Le Duan, District 1, Ho Chi
Minh City, Vietnam
028-3910 2828
028-3910 2929
ptsc@ptsc.com.vn
www.ptsc.com.vn
01/02/1993
Industry Overview, Prospects, and Challenges
1. Industry Overview
1.1. Fluctuations in Global Oil Prices
The oil market has been shaped by various events that caused significant fluctuations in
global oil prices, reflecting the interplay of geopolitical, economic, and market forces. These
shifts have had profound implications for industries, economies, and energy strategies
worldwide.
The Gulf War in 1990 marked the beginning of a sharp surge in oil prices, with prices rising
from $17 per barrel to a peak of $40 per barrel by the end of the year. This dramatic increase
was driven by the uncertainty and supply disruptions caused by the conflict. In contrast, the
global economic downturn in 2001 resulted in a substantial drop in oil prices, which fell to
$20 per barrel as demand weakened.
In the following years, multiple factors converged to drive oil prices to unprecedented levels.
Between 2007 and 2008, the global financial crisis, a decline in oil supply, speculative
trading, a depreciating US dollar, and sovereignty disputes over major oil fields propelled oil
prices to nearly $100 per barrel. By July 2008, oil prices peaked at a historic high of $147.27
per barrel, underscoring the vulnerability of the market to complex interdependencies.
The early 2010s saw continued geopolitical instability that further influenced oil prices.
Events such as the Arab Spring, conflict in Iraq, and Western sanctions against Iran
contributed to a sustained increase in West Texas Intermediate (WTI) crude oil prices, which
exceeded $100 per barrel and remained above this threshold for an extended period.
However, the oil market faced a sharp reversal in 2015 and 2016 due to declining global
demand, increased competition within OPEC for market share, and rising production from
shale oil. These factors drove oil prices to a low of $30 per barrel in February 2016, reflecting
a significant oversupply in the market.
The COVID-19 pandemic in 2020 had a profound impact on global oil demand, leading to
unprecedented market disruptions. As economies began to recover in 2021, oil demand
rebounded. However, challenges such as rising oil inventories and storage shortages
persisted. The geopolitical tensions arising from the Russia-Ukraine conflict in 2022 further
exacerbated price volatility, pushing oil prices to an eight-year high by mid-2022. The
OPEC+ production cut agreement, implemented in May 2021, played a role in stabilizing
prices, contributing to a 50% increase in oil prices that year.
Looking ahead to 2023 and 2024, geopolitical tensions in the Middle East and OPEC+’s
decision to extend production cuts until the second quarter of 2024 continue to influence
global oil prices. These ongoing dynamics underscore the complex and volatile nature of the
global oil market, highlighting the need for adaptability and strategic planning in the face of
such challenges.
1.2. Factors Influencing Oil Prices in 2024-2025
1.2.1. Positive Factors
The global economy is projected to continue its recovery in 2024, with a particular uptick in
industrial production and transportation activities. This increased economic activity is
expected to drive up global oil demand.
In the United States, oil consumption is anticipated to gradually return to normal trends. The
stabilization of air travel and road transportation in 2024 will likely maintain high demand for
transportation fuels, boosting US oil consumption.
China's crude oil demand is expected to increase slightly. The recovery of manufacturing and
tourism activities is projected to bolster China's oil demand. Additionally, high refining
margins are encouraging refineries to operate at higher rates.
India's oil consumption is forecast to remain strong. Continued growth in manufacturing and
construction activities, fueled by increased government spending, is expected to drive India's
oil demand. Furthermore, the recovery of air travel will boost transportation activity and fuel
demand.
OPEC+ may extend production cuts through 2024. Reduced oil supply from OPEC+ could
create a slight supply deficit in the market.
Investors are increasing their long positions in crude oil futures. Investors are taking long
positions in crude oil futures as a hedge against potential price increases due to escalating
tensions in the Middle East.
Escalating tensions in the Middle East could disrupt shipping routes. Increased tensions
between Iran and Israel have raised concerns about the closure of the Strait of Hormuz, which
could lead to supply shortages from Gulf nations.
1.2.2 Negative Factors
European oil demand is expected to be subdued. The European economy is forecast to grow
at a modest rate of 0.8% in 2024. Additionally, the growth of electric vehicles amid
increasingly stringent environmental regulations is expected to reduce demand for oil
products.
Increased production from non-OPEC+ countries may offset production cuts. US crude oil
production has surpassed 13 million barrels per day, adding to global oil supply.
Oil inventories are near long-term averages. Current inventory levels in the OECD and the
US are relatively stable and close to long-term averages, which could help mitigate shortterm supply disruptions.
OPEC's spare capacity is on an upward trend, indicating that the oil market is unlikely to
experience a prolonged and significant price increase in the near term. However, several
additional factors could influence the market dynamics. Geopolitical risks, including ongoing
tensions such as the Russia-Ukraine conflict and regional disputes, have the potential to
introduce considerable volatility into oil prices. Technological advancements in renewable
energy and energy efficiency may gradually reduce global oil demand over time, altering the
market's long-term trajectory. Additionally, financial market conditions—such as changes in
interest rates, exchange rates, and investor sentiment—remain critical variables that can
impact oil prices, further emphasizing the complex interplay of factors shaping the oil
market.
2. Prospects
2.1 Lot B - Ô Môn: A Key Highlight
In 2024, the oil and gas sector is poised for significant growth with the implementation of
several large-scale projects, including Phase 2B of Su Tu Trang, Nam Du - U Minh, Lac Da
Vang, and Lot B - Ô Môn. These projects, designated as national priorities with a long-term
focus, will present substantial opportunities for upstream players, particularly in the
Mechanical and Construction (M&C) segment, including PVS.
Among these projects, the gas-to-power chain of the Lot B - Ô Môn project stands out as a
key driver. Officially launched in late October 2023 after overcoming various hurdles, this
project, with a total investment of nearly $10 billion, will generate significant work volumes
for upstream businesses during its development phase.
PVS has secured several critical packages for the Lot B - Ô Môn project. In the upstream
segment, PVS, in collaboration with McDermott, has been awarded EPCI#1, encompassing
the design, construction, and installation of the central processing platform and living
quarters platform. This contract holds an estimated value of $1.08 billion. Furthermore, PVS
has been assigned EPCI#2, which involves the design, procurement, fabrication, and
installation of the gathering platform, wellhead platform, and in-field pipeline systems, with
an estimated value of approximately $400 million.
In the midstream segment, the PVS-Lilama 18 consortium has been awarded the Lot B - Ô
Môn gas pipeline package. This package encompasses onshore pipeline installation, detailed
design, and offshore pipeline testing, with a contract value of $300 million. Additionally,
PVS is actively bidding for the EPCI#4 contract, which involves the installation of
approximately 300 km of 26-inch offshore pipelines, with an estimated value of around $400
million.
2.2 Potential in Offshore Wind Energy
Vietnam's recent approval of Power Development Plan VIII, coupled with the country's
ambitious commitment to achieving net-zero emissions by 2050, has created a strong
momentum for renewable energy projects. This presents significant growth potential for the
sector in the coming years. Recognizing this opportunity, PVS entered the offshore wind
market in 2022 and has since secured two new contracts in partnership with Semco Maritime,
set to commence in 2024. These contracts include: An EPC contract to supply an offshore
substation with a capacity of 375 MW for the Baltica 2 offshore wind project in Poland,
valued at $200 million and an EPC contract for an offshore substation with a capacity of 500
MW for the Fengmiao offshore wind project in Taiwan, also valued at $200 million.
By actively participating in these global offshore wind projects, PVS gains valuable
experience and enhances its capabilities in this emerging sector. This experience will be
invaluable as Vietnam transitions towards offshore wind energy. With a strong track record
and a growing expertise, PVS is well-positioned to secure large-scale contracts and capitalize
on the significant opportunities presented by the ongoing energy transition.
2.3 2024 Growth Drivers
In 2024, PVS's main growth driver will be the Lot B - Ô Môn project. With its significant
workload, the project will boost the company's revenue and profit growth in the medium
term, particularly after the FID in Q2 2024. In the long term, alongside its expertise in oil and
gas mechanical and construction, investors may continue to focus on the promising offshore
wind segment that PVS is actively pursuing.
3. Challenges
The oil and gas industry is one of the most competitive sectors in the global economy,
characterized by significant challenges and opportunities for key players. PetroVietnam
Technical Services Corporation (PVS) is no exception, as it navigates a complex landscape
shaped by intense competition, fluctuating global markets, stringent regulations, and the need
for sustainable development.
The oil and gas industry is marked by fierce competition among both international and
domestic players. PVS faces significant challenges from global giants such as Total, BP, and
Shell, who bring vast resources and advanced technologies to the table. Simultaneously,
domestic competitors in Vietnam add to the pressure. To maintain its competitive edge, PVS
must leverage its expertise, focus on operational efficiency, and explore strategic partnerships
to bolster its market position.
The dynamics of the global oil market have a profound impact on PVS’s revenue and
profitability. Oil prices are highly volatile, influenced by factors such as geopolitical tensions,
shifts in global energy demand, and the growing emphasis on renewable energy. For instance,
political instability in oil-producing regions can disrupt supply chains, while increased
adoption of renewables poses a long-term challenge to fossil fuel demand. PVS must adopt
flexible strategies, such as diversifying its service portfolio and investing in alternative
energy projects, to mitigate these risks.
The oil and gas sector is capital-intensive, requiring substantial investments in infrastructure
and advanced technologies. For PVS, maintaining and enhancing production capacity
necessitates significant financial resources. This includes upgrading existing facilities,
adopting cutting-edge technology, and expanding its exploration and production capabilities.
Effective financial management and securing strategic investments are essential to support
these initiatives without overburdening the company’s balance sheet.
Financial risks are inherent in the oil and gas industry, particularly concerning exploration
and retail contracts. The volatility of oil prices exacerbates these risks, as fluctuating
revenues can disrupt financial planning. PVS must develop a robust financial strategy that
includes risk management tools, such as hedging against price volatility, and diversifying
income streams to stabilize its financial performance.
The COVID-19 pandemic has significantly disrupted the oil and gas industry, affecting
supply chains, reducing demand, and causing operational delays. For PVS, adapting to these
changes requires agile management practices and innovative solutions. Enhancing digital
capabilities, optimizing supply chains, and focusing on core operations can help the company
mitigate the impact of future disruptions.
III. Company Analysis
1. Analysis of the Prospects and Position of PVS in Vietnam’s Oil and Gas Industry
Vietnam’s oil and gas industry has long played a vital role in the national economy. Among
the companies operating in this sector, PetroVietnam Technical Services Corporation
(PVS) holds a particularly significant position. PVS is not only one of the leading companies
in Vietnam’s oil and gas sector but also a top technical service provider in the region.
1.1 Providing High-Quality Technical Services
PVS has established itself as a leading provider of technical services for Vietnam’s oil and
gas sector. The company offers a wide range of services, including the design, construction,
operation, and maintenance of oil and gas projects. With a team of highly trained and
experienced engineers and specialists, PVS ensures the delivery of top-tier technical solutions
for its clients.
1.2 Contributing to the Development of Vietnam’s Oil and Gas Sector
PVS has played a crucial role in advancing Vietnam’s oil and gas industry. The company has
been involved in numerous major projects, including oil and gas extraction as well as refining
and petrochemical ventures. These projects have not only enhanced Vietnam’s oil and gas
output but also created thousands of jobs and contributed significantly to the country’s
economic growth.
1.3 Supporting Communities and the Environment
PVS focuses not only on business growth but also on supporting communities and protecting
the environment. The company has implemented various social and environmental initiatives,
including support for local communities and measures to minimize the environmental impact
of oil and gas activities.
2. Fundamental Analysis
3. Technical analysis
1. Investment Thesis
III . Investment situation and investment strategy
III.
Conclusion