Foreign investors still eyeing Dung Quat

                                                               Photo: Duc Anh

A number of foreign investors have sought opportunities to invest in the Quang Ngai oil refinery.

Together with Russia’s Gazprom Neft have been other investors from Europe, the Middle East and Thailand visiting the Dung Quat Oil Refinery in central Quang Ngai province over the last year seeking strategic investments from its equitization, Mr. Nguyen Hoai Giang, Chairman of the Binh Son Oil Refining and Petrochemical Company Limited (BSR), told VET.

However, “there is still no movement as yet,” he added. “The company is for now completing the refinery’s asset valuation to quickly submit it to PetroVietnam and then the Ministry of Industry and Trade for consideration and approval.” The asset valuation is expected to be completed by the end of the first quarter of 2017.

The refinery's equitization will help it have more financial resources to invest in the oil refining and petrochemical sectors, according to Mr. Tran Ngoc Nguyen, CEO of BSR. “2017 will be the year the oil refinery is equitized,” Mr. Nguyen told local media.

The quantity and price of shares will depend on the progress of its equitization and the market situation next year, Mr. Nguyen said. BSR is currently working with oil and gas corporations from other countries to find a strategic partner.

Domestic consumption will be prioritized by the company in the coming year as Dung Quat’s capacity meets only 40 per cent of domestic fuel demand.

However, it will expand its exports over the next five to ten years and focus more thoroughly on the petrochemical industry instead of oil refining. That is also why the selection of strategic partners is yet to be decided, because BSR hopes to seek partners with strong financial capacity and experience in the field of petrochemicals.

Gazprom Neft dropped its plans to purchase 49 per cent of PetroVietnam’s stake in the Dung Quat Oil Refinery in the middle of the year due to unfavorable conditions at the time. Mr. Nguyen, however, revealed that the Russian oil giant still has its eyes on securing a stake in the refinery.

Referring to fluctuations in oil prices after OPEC announced production cuts in November, he said that, different to oil exploitation, oil refining is not greatly affected by oil price rises and falls.

2016 is considered a successful year for BSR as the company’s total revenue reached more than $3.1 billion and it contributed over $483 million to the State budget, exceeding its plan by $88 million, according to is latest figures. Productivity is estimated at 6.84 million tons and sales at 6.8 million tons.

This is the first time BSR has had financial autonomy after eight years of operations. Payments for BSR products sold domestically (including its own internal consumption) to the State budget was cut from 13 to 10 per cent from September to the end of 2016.

In other recent news, Dung Quat has been seeking approximately $1.2 billion in overseas loans before its initial public offering (IPO), projected in 2017. Its expansion plans will help it to increase capacity by 30 per cent while helping to cut manufacturing costs due to the cheaper oil price. The company is still in the process of selecting consultants for the loan and its IPO is still planned for the third quarter of 2017, according to Mr. Giang.

by Khanh Chi / VET