Negotiations under which PetroVietnam will sell a 49 percent stake in the Dung Quat refinery, the country's sole oil processing facility, to the Russian oil company Gazprom Neft are expected to be soon concluded.
|The refinery is expected to produce 8.5 million tonnes of crude oil a year (171,000 barrels per day) once a projected upgrade is finished by 2022 (Photo: VNA)|
This was reported by the Russia-based Interfax-ANI news agency.
"At the current time, we don't see any obstacles that can destroy this potential agreement," Gazprom Neft's Chairman Alexander Dyukov was quoted as saying.
Dyukov said Vietnam's economy was booming and its demand to import oil products was likely to increase. The oil refinery's capacity needed to be upgraded to make more profit.
Earlier, Gazprom Neft said it now had exclusive rights to negotiate with PetroVietnam on acquiring 49 percent of shares, the highest foreign ownership rate in a Vietnamese company, in the refinery operator's Binh Son Refining and Petrochemical Co. However, no value or timing was given for the purchase.
This negotiation is in line with an agreement signed between the two countries during Russian President Vladimir Putin's visit to Vietnam in 2013. Following this, Gazprom Neft, the oil arm of top global gas producer Gazprom, may buy a 49 percent share in Dung Quat refinery.
The two countries also signed a tentative intergovernmental agreement under which, after the share purchase, the Russian company is responsible for supplying oil to Dung Quat refinery, from 3 million tonnes in 2015, 3.6 million tonnes in 2016 to 4.8 million tonnes in 2017 - and no lower than 6 million tonnes from 2018 onwards.
According to Gazprom Neft's assessment, the refinery upgrade may cost US$ 1-1.5 billion. This would raise capacity from the current 6.5 million tonnes per year to 10-12 million tonnes.
The refinery is expected to produce 8.5 million tonnes of crude oil a year (171,000 barrels per day) once a projected upgrade is finished by 2022.
On the state-level visit by Russian Prime Minister Dmitry Medvedev to Hanoi early this week, the two countries also agreed to step up cooperation in expanding oil and gas exploration and production in Vietnam.
Early this week, PetroVietnam and Gazprom Neft signed a tentative agreement to collaborate on exploring and developing oil and gas resources beneath the Pechora Sea in the Russian Arctic. The signing was witnessed by the two countries’ Prime Ministers.
By October, the two sides will unveil the basic terms of partnership, as well as release a list of priority oil and gas fields.
Vietnam and Russia have long had close energy cooperation, beginning with the construction of a hydropower plant in the 1980s and then oil and gas joint venture Vietsovpetro.