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Refinery seeks foreign strategic partner

Update: March, 14/2012 - 09:57

HCM CITY — The Viet Nam National Oil and Gas Group (PetroVietnam) plans to sell 49 per cent of its shares in Dung Quat Oil Refinery to three foreign partners to raise capital to expand the refinery and increase production capacity.

Nguyen Hoang Giang, general director of the Binh Son Refining and Petrochemical Co Ltd, the management unit of the refinery, told online newspaper yesterday that the company was in negotiation with Japan's JX Nippon, Venezuela's Petroleos de Venezuela and South Korea's SK.

The money expected to earn from the deal would be reinvested in the refinery to increase its capacity from 130,500 barrels (6.5 million tonnes) to 200,000 barrels (10 million tonnes) per day.

According to Giang, the three companies have good financial potential and great deal of experience in the oil refinery industry.

He said that it was possible that all three companies would contribute capital to buy the 49 per cent stake in the refinery. However, only one or two might be involved, he added.

The Binh Son refining company is currently working with various agencies to determine the refinery's assets.

The partners who buy shares would participate in increasing the refinery's capacity and expanding it.

As the refinery's capacity is raised to 10 million tonnes, it would meet between 40 and 45 per cent of the country's total demand for oil and products, according to Giang.

The expansion project is expected to be completed within the next five or six years, with an estimated investment of US$1.5-2 billion, Giang told Dow Jones Newswire.

The refinery, the first of its kind in Viet Nam, was planned in January 1998 when the Ministry of Planning and Investment was keen to have domestic refining capability. It initally granted approval for a refinery in the central province of Quang Ngai.

Construction of the refinery began in Quang Nam Province on November 28 in 2005 and the first phase was completed on February 22 in 2009.

The refinery has run at full capacity since overall maintenance was done in mid-September last year.

Last year, it produced 5.5 million tonnes of petroleum products and sold more than 5.4 million tonnes of products for a total of VND110 trillion.

Eight petrol and gas products produced by the refinery have received ISO 9001:2008 quality certificates from Norway-based Det Norrske Vertas (DNV), a leading international provider of risk management services. — VNS

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