Vung Ro Oil Refinery in Vietnam

20/11/2007 VietNamNet Bridge - The country’s first wholly foreign-invested oil refinery project was licensed on November 18 by the People’s Committee of the central province of Phu Yen . The UK ’s Technostar Management Ltd and Russia ’s Telloil will form a joint venture to build the Vung Ro Oil Refinery at a total cost of 1.7 billion USD. The facility will occupy 200 ha of land and 210 ha of water surface near the Vung Ro port in the province’s Dong Hoa district. Technostar will hold 51 percent ownership in the project, which would become the nation’s fourth oil refinery currently planned or under construction. The project is expected to supply the domestic market with four million tonnes of refined petroleum products annually at the end of its 500 million USD first phase, to be completed in 2011. The project’s output will be increased to eight million tonnes yearly at the end of the second phase in 2013. Crude oil for the refinery will be obtained from Petro Vietnam as well as imported from Middle East sources. Under the terms of the licence, the project would enjoy an exemption of land use rental fees for the first 11 years of operation and a corporate income tax rate of only 15 percent for the first 12 years of operation, compared to the general rate of 28 percent. Vietnam ’s annual demand for petroleum products is estimated to surge to 20 million tonnes by 2012, from 12.5 million tonnes in 2006. To meet the rising domestic demand, Petro Vietnam is working on oil refineries in Quang Ngai, Thanh Hoa and Ba Ria-Vung Tau provinces. When all four are fully operational, their combined production output will total 20 million tonnes per year. Vietnam imported 10.4 million tonnes of refined petroleum products in the first 10 months of this year, up 12.1 percent over 2006, according to the General Statistics Office. The imports in the first 10 months cost 5.85 billion USD, 16 percent over the same period last year. Lacking refining capability, the nation exported over 12.4 million tonnes of crude oil equivalent in the same 10-month period, worth nearly 6.65 billion USD, representing year-on-year declines of 9.9 percent in volume and 7.5 percent in value. Source: VNA