Most of the planned petrochemistry and oil refinery projects have not been implemented as initially scheduled, but experts still think the projects deserve investment.

 

Six petrochemistry and oil refinery projects have been licensed, including the $9 billion Nghi Son, $3.2 billion Vung Ro, $8 billion Nam Van Phong, $22 billion Nhon Hoi, $4.5 billion Long Son and $538 million Can Tho projects.

Of these, only Nghi Son has been implemented as expected. The investors had disbursed $3 billion by the end of 2014, having 11,000 workers on the construction site. The others have been making no headway since the day of licensing.

The local authorities have threatened to revoke the license from the Can Tho oil refinery project, which was granted a license in May 2008. Authorities said the investors have not implement the project as promised. 

Nguyen Van Hong, director of the provincial Planning and Investment Department, said the project cannot move ahead because the US investor Semtech Ltd B.V.I  is facing financial difficulties in an economic crisis. 

The groundbreaking ceremony for the Vung Ro petrochemistry & oil refinery took place six months ago, but construction has not started.

Meanwhile, Victory, the super-project in Nhon Hoi Economic Zone in Binh Dinh province, still has no investment license.

Man Ngoc Ly, head of the Binh Dinh provincial Economic Zone Management Board, said the Thai PTT Group and Saudi Aramco are considering setting up a joint venture to develop the project.

“I hope a joint venture can be established soon in the second quarter of the year to get  an investment license,” Ly said.

The local authorities, estimating that it would take VND500 billion to complete site clearance, have asked for support from the state budget.

Though investors have been very slow in implementing registered projects, Ly does not think they will give up the projects because of the drop in crude oil prices.

“The multi-billion dollar projects are part of their (the investors’) long term investment strategies. Therefore, the crude oil price fluctuations at this moment won’t affect their investment decisions,” he said.

The Chair of the Vietnam Energy Association, Tran Viet Ngai, said the price ups and downs at certain moments will not affect long-term plans.

Moreover, Ngai said, investors won’t expect big profits from refined products, but from petrochemical products such as asphalt, polymer beads and synthetic fibers. 

These products can account for 60-70 percent of total profits.

“The crude oil price has dropped, but petrochemical products’ prices have stayed high. This would bring even higher profits,” Ngai said.

Tien Phong