Vietnam May Allow Foreign Investment in First Oil Refinery - Vietnam Briefing News
Sept. 9 – The Vietnam National Oil and Gas Group (PetroVietnam) has submitted a proposal to allow foreign companies to buy stakes in the country’s first oil refinery.
In a press conference, PetroVietnam Chairman Dinh La Thang said that Royal Dutch Shell, India’s Essar oil, and Russian oil firms Zarubezhneft and Rosneft have expressed interest in purchasing stakes in the ongoing construction of the Dung Quat refinery located in the central province of Quang Ngai.
“Prime Minister Nguyen Tan Dung has agreed in principle on the sale proposal and is allowing us to proceed,” said Dinh La Thang.
The proposal permits foreign partners to supply crude oil to the refinery or invest in its upgrading. The project will allow as much 49 percent of the project to be owned by foreign investors.
The Dung Quat refinery is scheduled to start operations on February 2009 and should be able to supply more than 40 percent of Vietnam’s oil needs. It has the capacity to refine 6.5 million tons of crude oil annually with a capitalization of US$2.5 billion.
Currently, Vietnam is forced to import all its refined oil products for domestic use because it does not have an oil refinery.
Domestic oil consumption is expected to grow by 13-15 percent annually by 2010.
In the first eight months of the year, the country spent US$9.1 billion on importing 9.6 million tons of petroleum products, according to the General Statistics Office.