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PetroVietnam, BSR seek foreign capital for Dung Quat

A delegation of officers from PetroVietnam and Binh Son Oil Refining and Petrochemical JSC has attended a thematic seminar on export funding – TXF Asia 2022 – in Singapore.

This international workshop had the participation of financial experts from banks and export credit agencies (ECA) in Asia, ECAs from Europe and financial institutions such as MIGA (Multilateral Investment Guarantee Agency) and ADB (Asian Development Bank).

This year, PetroVietnam was invited to present a report about the arrangement of ECA capital for PetroVietnam’s projects and a project on upgrading and expanding of Dung Quat Oil Refinery.

On the sidelines of the workshop, PetroVietnam and BSR, with the support of SMBC, held working sessions with ECA and foreign commercial banks to seek capital for the Dung Quat expansion project, including ECAs (SACE of Italia, KSURE and KEXIM of South Korea, JBIC of Japan, Hermes of Germany), and banks (JP Morgan of the US, Societe Generale (SG) of France, and Landesbank Baden-Wuerttemberg (LBBW) of Germany).

Commercial banks and ECAs expressed their interest in the project, saying there are favorable conditions to access loans in the market. They will send letters of intent (LOI) to provider loans to BSR and complete procedures to examine and provide credit to the project.

Attending TXF Asia 2022, BSR and PetroVietnam provided preliminary information about the necessity, importance and demand for long-term capital of the Dung Quat expansion project. They emphasized the goal of optimizing the oil refinery’s operation, and minimizing emissions from petrol and diesel engines by improving the quality of the project’s products (they will be upgraded from EURO II to EURO V), which is in line with PetroVietnam’s energy transformation and emissions reduction. 

BSR is consulting with the Ministry of Industry and Trade (MOIT) and ministries on the plan to expand Dung Quat. The expansion would help settle problems of the refinery, including crude oil supply, product standards, production capacity, deep processing capability and diversification of products.

A BSR report showed the upgrading and expansion of Dung Quat has been going more slowly than scheduled.

The design has been delayed by about five months because of the updating of technical characteristics of crude oil, the issues that need to be clarified between the refinery and after the expansion, and issues related to negotiations with technology licensors. 

The project has investment capital of $1.2 billion, of which 40 percent comes from stockholder equity.

Xuan Thach

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