Vietnam Oil and Petrochemical Industry - Opportunities and Challenges

Deputy General Director of BSR – Mr. Hoi.N.V pointed out that the challenges for Dung Quat Refinery and Petrochemical Joint Stock Company is extremely huge in short, medium and long term. Firstly, domestic crude oil is declining in volume and quality. In addition, according to the Government's plan, strict environmental standards require upgrading the quality of Dung Quat refinery product from EURO 2 to EURO 5.

The project to upgrade and expand Dung Quat Refining and Petrochemical has been actively implementing, however, it is not governmental loan-guaranteed that results in difficulties in raising capital. The environmental impact assessment report of the project has been delayed in approval, which remarkably affected the project progress.

Deputy General Director of BSR – Mr. Nguyen Van Hoi delivered his speech at the workshop.

Speaking about the challenges, Chairman of the Board of Directors of PetroVietnam Camau Fertilizer Joint Stock Company (PVCFC) – Mr. Bui Minh Tien said that Ca Mau Fertilizer Plant is also facing many challenges.

On policy, PVCFC Chairman of the Board of Directors said that the gas price support policy of the Government to ensure the economic efficiency of Ca Mau Fertilizer Plant only lasts until 2018 (gas price accounts for 43% of total cost), while the government is considering the higher gas price which affects the efficiency of the plant.

Deputy General Director of BSR – Mr. Nguyen Van Hoi said that the development opportunity of BSR is a potential petrochemical product market, the configuration of Dung Quat oil products is open, can diversify products and develop petrochemical products. After nearly 10 years of operating Dung Quat Oil Refinery, the operation and maintenance manpower of BSR has matures, many of them have specialized level of oil refinery, so they can "exchange gray matter" for domestic and international oil refinery plants

PVCFC Chairman of the Board of Directors – Mr. Bui Minh Tien spoke at the seminar.

PVCFC Chairman of the Board of Directors – Mr. Bui Minh Tien said that after 7 years of operation, Ca Mau Fertilizer Plant provided over 5 million tons of nitrogenous fertilizer for the country's agriculture and hundreds of thousands of tons of specialized fertilizers to ensure the supply of fertilizer in good quality and regularity for the Mekong Delta. Ca Mau Fertilizer Plant is the first successful plant to produce urea in Vietnam, account for more than 30% of the market share of domestic fertilizers.

To sustain these achievements, Ca Mau Fertilizer Plant recommends that the government should have a policy to maintain the production, support peoples to access the use of good quality and affordable products, affordable, in order to ensure a profitable cultivation and contribute to stabilizing the fertilizer market and reducing imports.

Mr. Ho Si Thoang - Former Chairman of the Board of Directors of PetroVietnam, commented that there should not be any other oil refinery project in the coming years, focusing on upgrading and expanding Dung Quat oil refinery to develop more effectively.

Mr. By Van Tu, member of Vietnam Oil and Gas Association proposed that the Government should ensure the fast and legal cash flow disbursement mechanism for business operation.

Mr. Ho Si Thoang - Former Chairman of the Board of Directors of PetroVietnam

Mr. Hoang Xuan Hung, former Vice Chairman of Petrovietnam Oil and Gas Corporation, said that there are 5 major issues to be dealt with in the oil refinery sector:

Problem of product consumption; Guarantee for loans; Tax challenges; Raw materials for petrochemicals; Specific policy for PVN and the oil and gas industry of the Government

Thanh Hieu