Vietnam Oil and Gas Market Size

Vietnam Oil and Gas Market Analysis

The Vietnamese oil & gas market is expected to register a CAGR of around 3.5% during the forecast period. The COVID-19 pandemic significantly affected the oil and gas market due to crashed oil demand in the national and international markets. The refining companies had to reduce their output in response to such a significant decline. For example, the 130,000-bpd Dung Quat refinery in Central Vietnam reduced its output to 80% of capacity amid widespread lockdown. The upstream sector also faced issues due to a disrupted supply over the entire value chain. The Vietnamese oil and gas market is largely driven by the high fuel demand (particularly diesel, Naptha, and LPG) in the national market and the high demand for Vietnam's sweet crude in national and international markets. However, the high government interference in the petroleum industry reduces the ease of doing business index for private investors, hampering the market's growth.

• The upstream segment is expected to grow rapidly during the forecast period due to the upcoming exploration and production projects in Vietnam.
• Despite the unfavorable investment climate in the country, many international companies have shown interest in investing in its oil and gas market. VietsovPetro, a Russia-Vietnam joint venture, extended its cooperation agreement with Petrovietnam till 2030 to pursue the exploration and production activities in the country. The India-based oilfield equipment manufacturer, United Drilling Tools, recently promoted its products in Vietnam. Such developments create ample opportunities for the Vietnamese upstream market.
• The increased natural gas demand, particularly in the power sector, is expected to boost the oil and gas market in the future.