Vietnam’s Prime Minister Phan Van Khai has recently approved construction of Nhon Hoi oil refinery project with 100 per cent foreign investment, which was proposed in November 2005. A feasiblity study for construction of another oil refinery in Phu Yen has been also completed.
This is the first wholly foreign invested project in Vietnam’s Oil and Gas sector. The project with an annual capacity of 5 million tonnes received investment of US$1.5 billion from a Hong Kong investor. It is hoped that the feasible study will be completed within 6 months. The factory will be built in 24 months and become operational in 2009.
An officer of the Oil and Gas Department of the Ministry of Industry of Vietnam believes that Vietnam placed 3 conditions on the investor including ensuring modern factory equipment, environment standards and ensuring distributing on the domestic market under the State control.
According to investor’s research, Binh Dinh has a good soil foundation; Nhon Hoi port is able to receive ships of 70 to 100,000 tonnes. Binh Dinh is not resort so it is suitable for industrial development.
Recently, a plan for a Phu Yen oil refinery project with investment from English and Dutch investors was submitted to the Ministry of Plan and Investment of Vietnam. The factory with capacity of 3 million tons per year will become operational in 2009.
Projects waiting for foreign investment
According to the development strategy of Vietnam’s oil and gas sector, in 2009, the Dung Quat oil refinery with a capacity of 6.5 million tonnes will be brought into operation. In 2015, the Nghi Son Refinery-Petrochemical Complex with capacity of 7 million tonnes will become operational. Another oil refinery with an annual turnover of 7 million tonnes is going to be built in the South in 2020. Therefore, by 2020, the total fuel turnover of Vietnam should be around 20 million tonnes however the oil demand will increase to 32 million tonnes.
Vietnam’s Ministry of Industry revealed that a lack of capital is a serious problem. At present, capital of US$2.5 billion for Dung Quat has been arranged. However, the Nghi Son oil refinery project still lacks capital. Therefore, investors who want to invest in Vietnam will be given priority as well as licensed quickly.
In the past, the Dung Quat project coordinated with foreign investors, however, all of these attempts ended in failure. The coordination with Total Corporation failed because they required permission to distribute products and decide on prices. A Russian partner, Zarubezhneft Corporation also withdrew in early 2003.
P.V
Vietnamese
