Saturday, February 23, 2008

PetroVietnam nears deal for KPI, Idemitsu refinery JV

PetroVietnam nears deal for KPI, Idemitsu refinery JV

State oil group PetroVietnam is moving closer to an agreement with Idemitsu and Kuwait Petroleum International to form a joint venture to build Vietnam’s second refinery, the 170,000 bpd Nghi Son plant.

“Talks with Idemitsu and KPI are underway and some significant progress has been reached, including some special treatment granted to the foreign investors,” an official from PetroVietnam said Wednesday.

PetroVietnam has said it would grant investors in Nghi Son refinery the right to sell directly to the domestic retail market, which up untill now, remains closed to foreign companies.

Crude oil imports for use in the refinery will be exempt from taxes, and so will exports of oil products, the group has said.

It was unclear what shares each investor would hold in the US$6 billion refinery, which will use 100 percent foreign crude oil when it is put into operation in 2013.

PetroVietnam is currently the sole investor in Vietnam’s first oil refinery, the 140,000 bpd Dung Quat refinery, which is scheduled to go on-stream early next year.