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VietNamNews

PetroVietnam strikes $3b insurance deal

Update: June, 19/2010 - 10:07

Dung Quat Oil Refinery in the central province of Quang Ngai. — VNA/VNS Photo Dang Lam

Dung Quat Oil Refinery in the central province of Quang Ngai. — VNA/VNS Photo Dang Lam

HA NOI — PetroVietnam Insurance Joint Stock Co (PVI) and Binh Son Oil Refining and Petrochemical Co Ltd signed an insurance contract yesterday worth US$3 billion for the Dung Quat Oil Refinery, the nation's first refinery, located in the central province of Quang Ngai.

Under the deal, PetroVietnam Insurance will provide an insurance programme covering varieties of risks and take responsibility to consult and develop procedures and solutions to minimise those risks.

PetroVietnam spent about $3 billion on the contruction of the refinery in the Dung Quat Economic Zone in the province's Binh Son District. The group formally took over refinery operations from the contractors on May 30.

The facility has an annual capacity to process 6.5 million tonnes of crude oil into eight categories of petrol products, satisfying a third of the nation's total demand.

On Thursday, Binh Son Oil Refining and Petrochemical Co Ltd also signed three other deals with PetroVietnam affiliate PetroVietnam Oil Corporation (PV Oil), under which it would purchase petrol and lubricant products from the Dung Quat facility as well as ensure crude oil supplies to the refinery from the Bach Ho offshore oil field.

Binh Son would also negotiate with other partners to import additional oil beginning in August to guarantee sufficient supplies for the Dung Quat refinery.

Seeking Japanese investors for additional projects in Viet Nam, PetroVietnam will hold an investment promotion conference in Tokyo next week, on June 20-25. The group plans to introduce 30 projects in the oil and gas, electricity, and real estate development sectors.

PetroVietnam deputy general director Nguyen Tien Dung said the group selected Japan as an initial step in its call for foreign investment because Japanese companies had powerful financial resources and advanced technologies.

Japanese firms were also rather fastidious in choosing projects, Dung said, but once they made a decision to invest, they would consistently do their utmost to make the project effective.

The group will collaborate with the Japan External Trade Organisation (Jetro) and the Ministry of International Trade and Industry (Miti) to jointly organise the conference. It is expected to attract more than 400 Japanese companies.

"After this event, PetroVietnam plans to continue investment promotion in South Korea, the US, the Middle East and Russia," Dung added.

PetroVietnam is in an ongoing search for a foreign partner to establish a joint venture to develop the Long Son oil and petrochemical complex in the southern province of Ba Ria – Vung Tau at an estimated cost of about $6 billion.

Since a Venezuelan company withdrew from the project, Malaysia's Petronas, the IPIC Group of the United Arab Emirates and South Korea's GS Group have all expressed interest in the Long Son project.

The Government has also assigned PetroVietnam to build five thermal power plants, and PetroVietnam is calling on foreign investors to generate the $6 billion budget as well as seeking overseas suppliers to provide an estimated 18 million tonnes of coal per year for the plants. — VNS

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