Vietnamese authorities have offered LUKOIL the chance to set up an oil refinery in that country. The project is in keeping with the company's development strategy and could be profitable, since Vietnam is experiencing a severe shortage of petroleum products. International oil companies have already turned down two other projects in the country because of their inconvenient location and the lack of incentives from the state. LUKOIL is likely to only be interested the new project, an oil refinery in Ba Ria-Vung Tau Province.
Vietnam now has no oil refineries. Although it exported oil 11.1 million tons of oil between January and September of this year, it imported 7.7 million tons of petroleum products. LUKOIL's development strategy calls for it to have 14 percent of its capacities in Asia and America by 2011.
One obstacle to investment has been the logistics of the locating of the refinery. The government wants it built in the center of the country, while all oil production is in the north. The first project to build a refinery in Vietnam, on Dung Quat Bay in Quang Ngai Province, arose in the early 1990s, but no investors were found for it. In 1998, the Russian Zarubezhneft oil company became involved in it, but it withdrew from Vietross, the joint venture founded for the project, in 2002. The cost of the project is now estimated at $2.5 billion, having grown from $1.3 billion across the years. A source in the Vietnamese oil industry told Kommersant that the Russian government insisted that a new Russian partner be found, even thought the Vietnamese offered to return to $235 million invested by the Russian in the project. The launch date has been moved from November 2005 to 2009.
Another project was suggested at the end of the 1990s. That was the construction of a refinery with a capacity of 7 million tons and a chemical complex in the Nghi Son economic zone in Thanh Hao Province. The authorities estimate the cost of the project at $3.4 billion. It is located close to the sales market (200 km. from Hanoi), but far from oil production (about 1200 km.). Launch date is 2011. The Vietnamese government is hoping for the participation of Mitsubishi or Idemitsu.
The new project appeared in September. Ba Ria-Vung Tau is close to both the oil producing region and Ho Chi Minh City, its sales market. Total suggested the same site in 1992, but Vietnamese authorities rejected it at that time. The formation of a joint venture with PetroVietnam will not be required.
Vietnamese authorities still maintain that they need three refineries. Gasoline consumption is expected to reach 20 million tons per year by 2010.
kommersant.com
Vietnam now has no oil refineries. Although it exported oil 11.1 million tons of oil between January and September of this year, it imported 7.7 million tons of petroleum products. LUKOIL's development strategy calls for it to have 14 percent of its capacities in Asia and America by 2011.
One obstacle to investment has been the logistics of the locating of the refinery. The government wants it built in the center of the country, while all oil production is in the north. The first project to build a refinery in Vietnam, on Dung Quat Bay in Quang Ngai Province, arose in the early 1990s, but no investors were found for it. In 1998, the Russian Zarubezhneft oil company became involved in it, but it withdrew from Vietross, the joint venture founded for the project, in 2002. The cost of the project is now estimated at $2.5 billion, having grown from $1.3 billion across the years. A source in the Vietnamese oil industry told Kommersant that the Russian government insisted that a new Russian partner be found, even thought the Vietnamese offered to return to $235 million invested by the Russian in the project. The launch date has been moved from November 2005 to 2009.
Another project was suggested at the end of the 1990s. That was the construction of a refinery with a capacity of 7 million tons and a chemical complex in the Nghi Son economic zone in Thanh Hao Province. The authorities estimate the cost of the project at $3.4 billion. It is located close to the sales market (200 km. from Hanoi), but far from oil production (about 1200 km.). Launch date is 2011. The Vietnamese government is hoping for the participation of Mitsubishi or Idemitsu.
The new project appeared in September. Ba Ria-Vung Tau is close to both the oil producing region and Ho Chi Minh City, its sales market. Total suggested the same site in 1992, but Vietnamese authorities rejected it at that time. The formation of a joint venture with PetroVietnam will not be required.
Vietnamese authorities still maintain that they need three refineries. Gasoline consumption is expected to reach 20 million tons per year by 2010.
kommersant.com
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