News Post
Gazprom Neft to pick up stake in Vietnam refinery
Gazprom Neft, a subsidiary of Gazprom, Monday signed a series of agreement with Vietnam Oil and Gas Group (Petrovietnam) to extend their collaboration at the Dolginskoye field and the Severo-Zapadnyi (North West) licensed block on the Pechora Sea shelf.
As part of the collaboration, Gazprom Neft, the fourth largest oil producer in Russia and ranked third according to refining throughput, agreed to pick up a stake in state owned Petrovietnam's Dung Quat refinery, the Russian company said in a statement Monday.
Gazprom Neft will be acquiring 49 percent stake in Dung Quat refinery, according to government supported Russian news agency Sputnik.
The deal is a part of several agreements that Russian Prime Minister Dmitry Medvedev signed with Vietnamese authorities in the Vietnamese capital Hanoi to broaden energy cooperation between the two counties.
"Under the main clauses of the deal Gazprom Neft receives the exclusive rights to negotiate with Petrovietnam over purchasing of a share of the refinery," the statement said.
The statement added that Gazprom Neft will finance the upgrading of Dung Quat proportionally to its share.
In accordance with an agreement previously concluded between Gazprom Neft and Petrovietnam, Gazprom Neft plans to acquire a 49% stake in the plant which is owned and operated by Binh Son Refining and Petrochemical company..
Last year, Gazprom Neft and Binh Son Refining and Petrochemical Company signed a deal over the supply of Russian oil to Dung Quat refinery.
The Dung Quat oil and gas processing plant situated in central Vietnam is the only working refinery in Vietnam. Commissioned in 2009, Dung Quat's existing capacity is 6.5 million tones. The refinery accounts for about 30 percent of the oil products consumed in Vietnam
With Gazprom Neft picking up stakes, plans are afoot to expand the refining capacity of Dung Quat refinery 8.5 million tonnes per year, and improve the efficiency of its technological processes enabling the plant to switch over to producing Euro-5 standard motor fuels.
Under the collaboration agreements between Gazprom Neft and Petrovietnam, a dedicated working group of experts from both companies is to be set up to identify and formulate a list of priority oil and gas fields by the end of October 2015.
The expert group will also frame the basic terms of the partnership before further agreements are signed, Gazprom Neft stated.
The projects will be implemented via joint ventures of Gazprom Neft and state-owned Petrovietnam, in which the stakes of each party will be negotiated.
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