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The signing of a MOU between Petrolimex and JX Nippon Oil & Energy Corporation takes place last weekend - PHOTO: PETROLIMEX
HCMC –Japan’s JX Nippon Oil & Energy Corporation (JX NOE) will team up with Vietnam National Petroleum Group (Petrolimex) to form a joint venture to develop Nam Van Phong petrochemical complex in Khanh Hoa Province.
The joint venture is considered the first step of JX NOE to enter Vietnam’s fuel retail market.
Tran Van Thinh, general director of Petrolimex, told the Daily on December 25 that the Government has an open policy to allow foreign companies involved in oil refinery projects in Vietnam to sell products in Vietnam.
According to Thinh, the policy is expected to attract more foreign investors and will be applied to other oil refinery projects soon, including Nghi Son in the northern province of Thanh Hoa and Long Son in the southern province of Ba Ria-Vung Tau.
Petrolimex will be in further talks with JX NOE over the joint development of Nam Van Phong project whose capital is estimated at US$4.2-4.5 billion. The capital contribution ratio is still under negotiation.
The two companies signed a memorandum of understanding on cooperation and investment in Hanoi last weekend. JX NOE will become the strategic partner of Petrolimex when the latter issues shares to raise capital.
As scheduled, the two sides will complete preparations for the share issuance and the establishment of the joint venture before they work on investment procedures in the middle of next year.
Nam Van Phong petrochemical complex, one of the key projects approved in April by the Government, will pave the way for JX NOE to become the first foreign investor to enter the local fuel retail market.
Petrolimex is active in fuel imports and exports, trading and refining, and currently holds 60% local fuel market share. Some 2,170 out of 13,500 gas stations in the country belong to this State-owned enterprise. It also has units in Singapore and Laos, and a representative office in Cambodia.
Vuong Thai Dung, deputy general director of Petrolimex, said it is difficult to predict the movements of the fuel market while world oil prices are plunging.
Dung told the Daily that the reduction will surely affect the decision of investors in refinery projects in the country.
Dung added that Petrolimex would not partner with Thailand’s PTT Public Company Limited (PTT) in Nhon Hoi oil refinery project in Binh Dinh Province due to its huge investment, about US$22 billion.
Industry insiders said investors will weigh their participation in oil refinery projects in Vietnam due to the fluctuations of input material costs. The upcoming projects with foreign involvement may be delayed as foreign investors need more time to observe the fuel market.
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