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PetroVietnam told to submit new plan

Update: September, 13/2012 - 09:56

HA NOI (VNS)— Prime Minister Nguyen Tan Dung has ordered State-owned oil and gas giant PetroVietnam to complete its restructuring plan and submit it to the Ministry of Industry and Trade for consideration.

In a recent meeting, the Government acknowledged the role that PetroVietnam has played as a major economic group, contributing considerably to the State budget, developing the domestic petroleum industry and even expanding operations to foreign countries.

However, it has continued to maintain ineffective non-core investments and demonstrate shortcomings in corporate governance, with a number of affiliated enterprises operating without sufficient supervision.

The Prime Minister is therefore urging the restructuring plan to focus on rearrangement of PetroVietnam affiliates into five main business concentrations or sectors.

Any plan would also forbid PetroVietnam from forming member councils in single-member limited liability companies it controls, including PetroVietnam Exploration and Production, PetroVietnam Oil, PetroVietnam Power, Binh Son Petrochemical Refinery, Dung Quat Shipbuilding and Ca Mau Fertiliser.

The PetroVietnam reorganisation plan would also need to build a roadmap for divestment from non-core lines businesses, particularl in securities, civil engineering, real estate development, and tourism and leisure.

In a meeting in July, PetroVietnam chairman Phung Dinh Thuc admitted that the group had invested over VND5 trillion (US$238 million) in non-core lines of business and had targeted to gradually withdraw from these sectors by 2015.

However, he proposed to the Prime Minister to retain holdings of 18-20 per cent in PetroVietnam Finance Cor, and PetroVietnam Insurance Corp, arguing that these were essential to core its operations. However, the Government rejected the proposal for PetroVietnam Finance and urged the group to devise a specific plan for divesting from the corporation. — VNS

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