VietNamNet Bridge - Oil refinery projects have been progressing slowly, partly due to a drop in oil prices, but economists have called on the government to reconsider investments in the field.

 

 

The project feasibility was seen more clearly after a meeting between Vietnamese Prime Minister Nguyen Tan Dung with PTT’s leadership in Bangkok in 2014 and the appearance of Saudi Aramco, a “guarantor” for the project success.

However, no further information has been reported about licensing of Victory, the $22 billion oil refinery project developed by PTT Group (from Thailand) and Saudi Aramco (from Saudi Arabia), though the licensing was initially slated for February 2015, according to Lao Dong newspaper.

Binh Dinh’s Chair Ho Quoc Dung has said the investment certificate may be granted to Victoria in the second quarter of the year.

Sharp falls in oil prices in the world market would possibly have an impact on the implementation of oil refinery projects.

Tran Viet Ngai, chair of the Vietnam Energy Association, said in Dau Tu that investors would have to reconsider their disbursement plan, because the oil price decrease would disrupt their initial investment plans.

He said the crude oil price fluctuations would lead to major changes in estimated investment rate, total investment capital and capital recovery plan.

Minister of Planning and Investment Bui Quang Vinh has also expressed concern about the petrochemistry and oil refinery projects in Vietnam.

“The oil price decreases would certainly affect oil and gas firms’ profit,” he explained. “Therefore, they would not have much money for re-investment to expand production.”

An analyst noted that international investors may suspend their new investment plans, because production costs at new mines may be higher than current selling prices.

He went on to say that except for Dung Quat, which has been operating for several years, and Nghi Son, which is under construction, other projects do not show positive signs.

Dien Dan Doanh Nghiep reported that the Can Tho City Planning and Investment Department was considering asking city authorities to revoke the license granted to the $538 million Can Tho oil refinery project because of slow implementation by the investor.

The construction on the refinery has not started. Since the licensing date in 2008, the investor has changed joint-venture partners who would run the refinery three times.

Thanh Lich