PetroVietnam works to combat inflation

State-run PetroVietnam will sideline 64 non-essential projects worth around $319 million this year to help fight inflation.

PetroVietnam chairman Dinh La Thang last week said that these projects were “not really urgent” and “difficult to arrange investment capital for”. “The 64 projects chosen from hundreds will be suspended or delayed. Projects to be continued would be strictly supervised and the list of non-urgent projects would be frequently updated.”

But Thang noted that power shortages meant power development projects were not included in the list.

PetroVietnam is now the second largest power producer in the country, behind Electricity of Vietnam (EVN).

This year the oil and gas group plans to kick-off construction for a range of important projects including the Long Phu 1, Song Hau 1, Thai Binh 2 and Quang Trach 1 power plants.

Many other projects under construction or in stage of procedure fulfilment include the Thai Binh 2 (1,200 megawatts) in Thai Binh province, Vung Ang 1 (1,200MW) in Ha Tinh province, Quang Trach 1 (1,200MW) in Quang Binh, Long Phu 1 (1,200MW) in Soc Trang province and Luang Prabang in Laos (1,100MW).

Also spared the knife in PetroVietnam’s round of cuts were key projects in the oil and gas, petro-chemical, seaports and bio-energy sectors.

The group is ramping up progress of its $6.2 billion Nghi Son refinery and plans to expand Dung Quat refinery and the Southern Petro-chemical complex.

Meanwhile, Ca Mau Fertiliser, Ethanol Phu Tho, Ethanol Dung Quat and Polyester Dinh Vu should go live this year.

In the first quarter of this year, PetroVietnam exploited more than six million tonnes of oil equivalent products, a rise of 1.6 per cent over the same period last year.

The group’s January-March revenue hit VND151 trillion ($7.3 billion), a year-on-year increase of 59.4 per cent. During this period, the group contributed nearly $1.8 billion to the state’s budget, an increase of 35 per cent on-year.

In its five-year plan for 2011-2015, PetroVietnam targeted a five-year revenue of around $147 billion, of which $31.4 billion will help fill the state coffers. It anticipates producing about 90 million tonnes of crude oil and more than 51 billion cubic metres of gas over the next five years.

PetroVietnam predicted that it would need between $5 and $6 billion for investment in oil and gas projects this year. This sum would come from its own capital, equitisation and initial public offerings of member companies, and commercial loans. – VIR

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