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| This picture taken on March 8, 2008 shows the construction site of Vietnam's first oil refinery in Dung Quat, central province of Quang Ngai. (AFP/Getty Images) |
The Vietnam National Oil and Gas Group (PetroVietnam) is considering importing crude oil to run the Dung Quat refinery.
Yesterday, PetroVietnam said that the Dung Quat Oil Refinery is scheduled to begin running on a trial basis in February 2009. In the first phase of operation, the refinery will use domestic crude oil sources, mainly from the Bach Ho (Black Tiger) oil field. However, the group is considering importing crude oil for Dung Quat to refine instead of using domestic oil.
Explaining this, PetroVietnam said that it is because domestic crude oil, especially from the Black Tiger field, has very high quality which always goes for good prices.
According to PetroVietnam, Dung Quat will need some 800,000 tonnes of crude oil for refining in 2009. The oil refinery will run with a full capacity of 6 million tonnes from 2010.
PetroVietnam said it is negotiating with big partners, like BP and Shell, to reach an agreement on a long-term oil purchase. It is expected that the volume of crude oil to be imported would meet 30-50% of the oil refinery's demand.
PetroVietnam is carrying out the oil exploration and exploitation overseas. It has developed some 10 cooperation projects overseas in 2008, of which six projects were inked, while the other 3-5 projects are expected to see negotiations to be completed by the end of 2008.
The national oil and gas group is also preparing for the series of projects on cooperating to exploit and trade crude oil with Venezuelan partners, considering the purchase of oil tanks to carry oil to Vietnam to provide to the refineries. The total capital of the projects may reach US$20 billion.
PetroVietnam's latest report showed that in the first nine months of the year, it exported 10.43 million tonnes of crude oil. The volume just meant 94% of the plan, but the turnover was at US$9.09 billion, or 166% of the targeted plan. The lower export volume and higher export turnover have been explained by the fact that the price of crude oil has increased sharply from the last time.
In related news, general director of PetroVietnam Tran Ngoc Canh yesterday said that the group is willing to carry out the 13 power projects which the Electricity of Vietnam has refused to undertake due to a lack of capital.
Canh confirmed that it would arrange enough capital for the 13 projects.
In an effort to persuade government officials to accept giving PetroVietnam the 13 projects, Canh said that the group already has a power company, which is managing 2,000 MW of electricity, and it is carrying out many power projects with the capacity of up to 3-4,000MW. Therefore, no one can say that PetroVietnam does not have capacity and experience in the power sector.
Regarding the capital arrangement, Canh said that PetroVietnam has much experience in arranging capital for big projects, and that it will be able to get sufficient capital for the projects
Phan Thi Hoa, Member of the Management Board of PetroVietnam, added that it is not the first time PetroVietnam has injected money into a power project. PetroVietnam is managing three power plants and it is going to carry out many other projects like the hydropower plant in Laos, Vung Ang 1 and 2 and Thai Binh thermo power plant.
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