Vietnam’s Crude Oil Industry: Overview 2025

Vietnam’s crude oil industry remains a key part of the country’s energy sector and economic landscape, contributing to both domestic energy security and export revenues. In recent years, production levels have faced challenges, prompting efforts to revitalise the sector through new exploration and production projects.

To drive growth, Vietnam has actively sought international partnerships and foreign investments in its oil and gas sector. The country’s crude oil reserves have attracted interest from global players looking to strengthen their presence in the region. Investment in refineries and petroleum infrastructure is also seen as a way to enhance Vietnam’s capacity to process and distribute oil products efficiently.

Looking ahead, the crude oil industry is expected to see moderate growth as domestic demand increases and foreign investors seek opportunities in exploration and refinery development. However, the sector faces challenges, including the need for infrastructure upgrades, regulatory improvements, and balancing environmental considerations with energy expansion. These factors will shape the trajectory of Vietnam’s oil industry in the coming years.

Vietnam’s crude oil industry in numbers

Vietnam’s crude oil industry has experienced notable changes in recent years. Here’s an overview of key statistics:

Crude oil production

Vietnam’s crude oil exploitation declined by 4.37 percent in November 2024 compared to October 2024, according to Vietnam’s General Statistics Office.

Year-on-year, crude oil output dropped by 7.62 percent in November 2024 compared to the same month in 2023, reflecting persistent challenges in the sector. Over the first eleven months of 2024, the cumulative production fell by 6.04 percent compared to the same period in 2023, highlighting a broader decline in output.

Crude oil imports-exports

Vietnam’s crude oil trade dynamics have evolved significantly in recent years, transitioning from a net exporter to a net importer due to increasing domestic demand and changes in production levels.

Vietnam’s crude oil exports, November 2024

Source: Vietnam Exports Tracker

Vietnam’s crude oil imports, November 2024

Source: Vietnam Imports Tracker

Domestic crude oil firms in Vietnam

PetroVietnam (Vietnam Oil and Gas Group)

PetroVietnam, the state-owned oil and gas giant, is the backbone of Vietnam’s energy sector. It oversees exploration, production, refining, and distribution of crude oil and natural gas, playing a critical role in ensuring national energy security. The company operates key oil fields both domestically and through international joint ventures, contributing significantly to Vietnam’s crude output.

PVEP (PetroVietnam Exploration Production Corporation)

As a subsidiary of PetroVietnam, PVEP specialises in oil and gas exploration and production activities. It manages various upstream projects across Vietnam and collaborates with international partners to develop offshore oil fields, such as those in the Cuu Long and Nam Con Son basins.

BSR (Binh Son Refining and Petrochemical Company)

BSR operates Vietnam’s first refinery, Dung Quat Refinery, which processes domestically produced crude oil and imported supplies. The company plays a vital role in ensuring Vietnam’s energy supply and contributes to the downstream segment by producing refined petroleum products.

PV Oil (PetroVietnam Oil Corporation)

PV Oil focuses on trading, distributing, and exporting crude oil and petroleum products. It handles both domestic and international markets, serving as a key intermediary for PetroVietnam’s crude oil production while meeting growing domestic fuel demand.

Vietsovpetro

Vietsovpetro, a joint venture between PetroVietnam and Russia’s Zarubezhneft, is a major operator in Vietnam’s offshore oil sector. It has been instrumental in developing fields like Bach Ho (White Tiger), one of the largest oil reserves in the country, contributing significantly to national crude oil production.

These domestic firms play pivotal roles across the oil and gas value chain, ensuring stable production, processing, and supply of crude oil in Vietnam while supporting the country’s economic and energy security.

Foreign crude oil firms in Vietnam

Vietnam’s crude oil industry has attracted significant participation from foreign companies, contributing to the exploration, development, and production of the country’s oil resources. Notable foreign firms operating in Vietnam include:

ExxonMobil

The American multinational ExxonMobil has been involved in Vietnam’s oil and gas sector, particularly in the development of the Ca Voi Xanh (Blue Whale) gas field, one of the country’s largest offshore natural gas discoveries. This project is expected to enhance Vietnam’s energy security and support its growing economy.

Zarubezhneft

The Russian state-controlled oil company Zarubezhneft has a longstanding presence in Vietnam through its joint ventures with PetroVietnam, notably Vietsovpetro. Established in 1981, Vietsovpetro has been instrumental in developing major oil fields, including the Bach Ho (White Tiger) field, significantly contributing to Vietnam’s crude oil production.

Pharos Energy

Pharos Energy, a UK-based oil and gas exploration and production company, has been active in Vietnam since 1996. It holds interests in two oil and gas producing blocks: Block 9-2, which includes the Ca Ngu Vang (CVN) field, and Block 16-1, encompassing the Te Giac Trang (TGT) field. Pharos collaborates with partners such as PetroVietnam Exploration and Production and PTTEP, the national oil company of Thailand.

Japan Vietnam Petroleum Company (JVPC)

A wholly-owned subsidiary of JX Nippon Oil & Gas Exploration Corporation, JVPC has been operating in Vietnam since the 1990s. JVPC renewed its contract with PetroVietnam Exploration Production Corporation (PVEP) to continue operations in Block 15-2, located offshore Vietnam, extending exploration and production activities beyond 2025.

These foreign entities, through joint ventures and partnerships with domestic firms like PetroVietnam, have played a crucial role in advancing Vietnam’s oil and gas industry, bringing in technical expertise, investment capital, and contributing to the overall development of the sector.

Vietnam’s main crude oil products

Vietnam’s crude oil industry produces a range of refined petroleum products, primarily to meet domestic energy demand and support its export markets. The key products derived from Vietnam’s crude oil include:

Gasoline

Gasoline is a major refined product used primarily for transportation. With increasing vehicle ownership and industrialisation, demand for gasoline has grown significantly in Vietnam.

Diesel

Diesel is widely used in transportation, construction, and agriculture. It also plays a crucial role in powering industrial machinery and backup generators, making it a cornerstone of the country’s energy supply.

Jet Fuel

Vietnam’s aviation sector relies heavily on jet fuel to support domestic and international air travel, which has expanded rapidly in recent years due to tourism growth and increasing business activities.

Fuel Oil

Fuel oil, or heavy oil, is commonly used in power generation and industrial applications. While less efficient than other fuels, it remains a critical energy source for specific sectors, including shipping.

Liquefied Petroleum Gas (LPG)

LPG is a byproduct of crude oil refining and is widely used in Vietnam for cooking, heating, and as an alternative fuel for vehicles. Demand for LPG has increased alongside urbanisation and population growth.

Petrochemical  Feedstocks

Vietnam’s crude oil is also processed into feedstocks for petrochemical production, such as naphtha, which is essential for producing plastics, chemicals, and synthetic materials.

These refined products are processed in facilities like the Dung Quat Refinery and Nghi Son Refinery, which play a key role in meeting domestic fuel demand and reducing reliance on imported refined products. While Vietnam continues to export crude oil, the focus has increasingly shifted toward developing refining capacity to meet the needs of the domestic market.

Crude oil regulations in Vietnam

Vietnam’s crude oil industry operates under a comprehensive legal framework designed to regulate exploration, production, and distribution activities, ensuring alignment with national interests and international standards. The key components of this regulatory structure include:

Petroleum Law

The Petroleum Law serves as the cornerstone of Vietnam’s oil and gas sector, outlining the legal parameters for all petroleum-related activities. The law specifies the rights and obligations of entities involved in exploration and production, establishes procedures for licensing and contracting, and sets forth guidelines for resource management and environmental protection. In 2022, significant amendments were introduced to enhance the sector’s attractiveness to investors and to streamline operational processes.

Petroleum contracts

Vietnam employs various types of petroleum contracts, including Production Sharing Contracts (PSCs) and other agreements, to facilitate collaboration between the government and oil companies. These contracts define the terms of resource extraction, profit sharing, and cost recovery. The 2022 amendments to the Petroleum Law have introduced more flexible contract terms, allowing for a maximum duration of 30 years, extendable under specific conditions, to accommodate the complexities of exploration and production activities.

Investment incentives

To attract foreign investment, Vietnam offers a range of incentives within its petroleum sector. For oil and gas blocks and fields eligible for investment incentives, the corporate income tax rate is set at 32 percent, with a crude oil export duty of 10%, and a cost recovery rate of up to 70% of the annual oil and gas production output. For those eligible for special investment incentives, the corporate income tax rate is reduced to 25 percent, the crude oil export duty to 5 percent, and the cost recovery rate is increased to up to 80 percent. 

Environmental and safety regulations

Operators in Vietnam’s crude oil industry are required to adhere to stringent environmental and safety standards. Regulations mandate comprehensive environmental impact assessments, implementation of safety measures, and decommissioning plans for petroleum installations. These provisions aim to mitigate environmental risks and ensure the safety of operations throughout the project lifecycle.

This regulatory framework reflects Vietnam’s commitment to fostering a stable and attractive environment for investment in its crude oil sector, while safeguarding national interests and promoting sustainable development.

What’s next?

Vietnam’s crude oil industry is a key contributor to the country’s economy, supporting both energy security and export revenues. Managed primarily by state-owned PetroVietnam and its subsidiaries, the sector focuses on offshore oil exploration and production. Major oil fields, such as Bach Ho and Rong, play a central role in output, with foreign partnerships contributing technical expertise and investment through production-sharing contracts. While crude oil remains an essential export, Vietnam has increasingly prioritised refining capacity to reduce reliance on imported petroleum products.

The industry operates under the Petroleum Law, which regulates exploration, production, and investment activities. Recent amendments aim to attract foreign investment by offering more flexible contract terms and incentives, particularly for offshore projects. However, challenges persist, including fluctuating global oil prices, infrastructure limitations, and the need for environmental compliance. 

With this in mind, foreign firms operating in the crude oil and energy space should make sure to keep up to date with the latest developments by subscribing to the-shiv.