PetroVietnam plans to withdraw investment capital in subsidiaries

Nguyen Ngoc Su, deputy general director of the National Oil and Gas Group (PetroVietnam – coded PVN) affirmed that the group’s capital withdrawal in member companies was not only to restructure the business activities in those firms but also help provide capital for new projects that the group’s has been carrying out recently.

In fact, at present, the group was the main investor or co-investor of a series of large projects with investment capital of billions of US dollars such as Southern Region Oil Refinery Complex ($3.7 billion), Nghi Son Oil Refinery (over $5 billion), Plot B-O Mon gas pipeline system (over $700 million), Ca Mau Fertiliser Plant or other large-scale power projects with designed capacity of more than 1,200 MW such as thermo power plant projects of Vung Ang 1, Thai Binh 2, Long Phu 1, Quang Trach 1 and Song Hau. These power plant projects have investment capital of over $1.5 billion per project. It’s not to mention those projects in the field of oil surveying and pumping sector that PVN has conducted in Vietnam or overseas.

Therefore, the group was seeking for investment capital sources. According to PetroVietnam’s plan of restructuring the group, PVN will only hold share majority of 51 percent in the large subsidiaries that produce strategic products, with large impacts in the country’s economy, and those member companies with main business lines similar to the group’s key operation sectors of oil surveying, pumping and processing, power generation and fertiliser.

Apart from withdrawing capital in the construction and insurance firms, the group has also set up plans to withdraw capital in Dung Quat Oil Refinery. PetroVietnam plan to offload 49 percent of the oil refinery with total investment capital of over $3 billion to the foreign strategic investors. Up to now, PVN hasn’t revealed any official partners in this deal.

In an effort of seeking new investment sources, in June, PetroVietnam has already held investment promotion conference in Japan for 30 large projects with capital scale of $40 billion.
However, due to the world economic crises, the results were not as good as expected. However, the Japanese investors showed their interest in Southern Region Oil Refinery Complex that PVN has cooperated with Vietnam Chemical Group and Siam Ciment Group (Thailand) to realise the project since 2008. However, up to now, the project need additional 200 hectares of land among total 400 hectares to be required.

From the end of 2009, PetroVietnam also planned to issue international bonds with capital scale of $500 million to $1 billion. Many international financial organisations have been interested in this opportunity, and considered it as an investment opportunity, but PVN’s representative refused to discuss about this. – Dautu

Tags: PetroVietnam

Posted by VBN on Sep 28 2010. Filed under Oil-Gas & Petroleum. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry