Vietnam Plans to Privatize First Oil Refinery by June 2017

Vietnam plans to sell shares in its $3-billion Dung Quat oil refinery by June 2017.


                                     The Dung Quat oil refinery. Photo: Petrotimes

The Vietnamese government plans to let its first oil refinery go public by June next year while four leading global energy firms have advanced interest in acquiring a majority stake, Reuters reported.

Binh Son Refinery and Petrochemical Company Ltd (BSR), which runs the $3-billion oil refinery, is a subsidiary of state-run energy company Vietnam Oil and Gas Group (PetroVietnam).

The initial public offering (IPO) is part of BSR’s plan to expand the refinery’s processing capacity, which stands at 6.5 million tons of crude oil per year.

The firm has not decided how much will be sold at the IPO because it will depend on market developments, said Tran Ngoc Nguyen, BSR’s general director, adding a strategic investor could buy up to 49% in the firm.

Rosneft, Russia’s biggest oil producer, Gazprom Neft, Thailand’s top energy company PTT and Kuwait Petroleum Corp have expressed interest in buying stakes in the refinery.

“We have not picked any strategic partner yet. We need a partner who can guarantee a crude oil supply for 50 to 100 years,” Nguyen tipped.

Gazprom Chairman Alexandr Dyukov said in June that the group had dropped a plan to buy a 49% stake in BSR due to dissatisfaction with the conditions proposed by the Vietnamese side. It would consider resuming the purchase plan when Vietnam meets its requirements.

Vietnam imported around 10 million tons of oil products in 2015, up 18.7% from a year earlier, according to government data. The Dung Quat oil refinery meets some 30% of domestic demand for oil products.

Tuan Minh / BizLIVE