Saturday, October 13, 2007

Vietnam plans to import 1mil tonnes oil in 2007: PetroVietnam

17:40' 12/10/2007 (GMT+7)

VietNamNet Bridge – Vietnam wants to import 1mil tonnes of crude oil in 2007, and crude oil imports will increase in the time to come, according to Dinh La Thang, Chairman of the Vietnam National Oil and Gas Group (PetroVietnam).

Mr Thang said that the Deputy Prime Minister, during his working visit to the Dung Quat oil refinery site, asked PetroVietnam to work with the contractor on solutions to speed up the pace of the project.

Mr Thang said that PetroVietnam would consider adjusting the project’s cost in order to help the main contractor offset the increased prices of materials and equipments, while ensuring the nation’s benefit. If the two sides cannot reach an agreement on the project’s cost adjustment, foreign consultants will be hired and the case will be brought to international arbitration.

As for the Nghi Son petrochemistry project, Mr Thang said that the negotiations were experiencing difficulties due to the increased prices of materials and equipment.

PetroVietnam has suggested two solutions. First, PetroVietnam will continue negotiations with foreign partners. Second, the Nghi Son project will be invested in domestically. PetroVietnam is leaning towards the second.

According to Mr Thang, Vietnam has the two most important conditions needed for the second solution to be implemented: capital and oil sources. Five domestic strategic shareholders and two foreign partners who can provide crude oil for 30 years have been found.

Regarding concerns about crude oil supply for oil refineries (the world is forecast to face a long-term shortage of crude oil), Mr Thang said that PetroVietnam had anticipated all these things. Vietnam has good diplomatic relations with regional countries including Laos, Cambodia, Russia and SNG countries, African and American countries.

In 2007, PetroVietnam plans to import 1mil tonnes of crude oil. However, according to Mr Thang, the plan is likely to fail due to many reasons, including security money and money remittance.

For a long time to come, locally sourced crude oil output will remain at around 18-20mil tonnes per year, and new oil refineries will have to use import materials. Therefore, it is expected that crude oil imports will gradually increase in the coming years.

The import of gas has also been thought of, in order to meet the demand for industrial development.

In the first nine months of the year, PetroVietnam signed six contracts on exploring for oil and gas abroad, raising the total number of the group’s abroad projects to 13. The group is also seeking new investment opportunities in Kazakhstan, Myanmar, Tunisia, Indonesia, Angola, Iran, Russia and Belarus.