Vietnam determines to expand the Dung Quat oil refinery Plant despite oil prices fall

Gazprom has stoped to buy shares of Dung Quat Oil Refinery Plant

President Truong Tan Sang said that, in difficult economic situation, Russian partner has stoped to buy shares of Dung Quat Oil Refinery Plant. Vietnam Oil and Gas Group (PVN) is seeking the other partners to participate in this commercial affair to have finance for upgrading and expanding this national main point petroleum project.

In early Jan 2016, Russian Gazprom Neft Corporationofficially sent a letter with a proposalto stop the negotiationprocess on transferring 49% shares of Dung Quat Oil Refinery Plant (ORP).

Previously, Gazprom Neft sent to Vietnamese concerned ministries and agencies a petition to propose a preferential  mechanism on import tax asa condition for Gazprom Neft to cooperate with Dung Quat ORP and participate to expand the plant as well. However in a reply the Ministry of Industry and Trade (MOIT) of Vietnamaffirmed: “it is impossible to continue the preferential import tax for Dung Quat ORP after 2018".

However, with PetroVietnam policy on equitization of Dung Quat ORP, Gazprom Neft will resarch opportunitiesto buy shares of the plant in future.

ThatGazprom to purchase49% shares ofDung Quat ORP was agreed on the occasion of the Russian Prime Minister Dmitry Medvedev visit to Vietnam on April 5-7, 2015. The sides signed the framework agreement on Gazprom to buy 49% shares from Binh Son Single Member Refinery Company Limited (The Management Company of Dung Quat ORP).

In negotiations, the Russian companies would like to buy 49% shares ofDung Quat ORPto invest capital for modernizing equipment and improving crude oil supply forthe plant

One of the principal requirements of the Vietnam side wasthe partner to ensure the plant operating at full designed (100%) capacity.

During Mr.Dmitry Mevedevvisit to Vietnam, sides clearly defined that Gazprom Neft will be a partner of PVN in Dung Quat ORP extending project.

VietnamEnergy.vn