PetroVietnam Reduces Salaries to Cope with Coronavirus, Low Oil Prices

Vietnam Oil and Gas Group is cutting employee salaries to rein in costs as it grapples with low oil prices and a coronavirus pandemic that has infected 212 people in the southeast Asian nation, the company said on Wednesday.

The move was part of efforts to cut costs by 15% to 30%, said the company, better known as PetroVietnam.

"The combined impact of the disease and low oil prices has hurt PetroVietnam's performance in March, and the difficult situation is expected to continue into the second quarter and through the entire year," it added.

Global crude prices have plunged to about $20 a barrel, from its previous forecast for an average of $60 this year, it said.

In a note on Wednesday, Fitch Solutions said "capital spending cuts and FID (final investment decision) delays appear inevitable" for PetroVietnam, adding that the country's demand for refined fuels will also shrink.

"We now expect refined fuels consumption to contract by 1% in 2020, down from the previous forecast for 3% expansion," it said.

Last month, PetroVietnam said it was considering stockpiling crude oil amid low prices while exploring ways to battle the pandemic fallout. 

(Reporting by Khanh Vu; Editing by Tom Hogue and Clarence Fernandez)

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