PetroVietnam in talks to sell Dung Quat refinery stake

State oil monopoly PetroVietnam is in talks with a number of foreign oil companies including Royal Dutch Shell, India’s Essar and South Korea’s SK Energy to upgrade and sell part of the country’s first refinery.

The Ministry of Planning and Investment-run Dau Tu (Investment) newspaper quoted PetroVietnam chairman Dinh La Thang as saying the group plans to upgrade the 140,000-barrels per day Dung Quat refinery so that it could process foreign crude oil in 2013.

PetroVietnam had said last month it would have to invest another $1 billion to build a desulphurizing unit at the refinery to enable it to process lower quality crudes by 2011.

Thang said PetroVietnam had been approached by the foreign oil companies who expressed interest in both equity stakes and the upgrade project.

Thang had previously said PetroVietnam could sell up to 49 percent of the Dung Quat refinery to foreign companies who could secure long-term crude supplies.

The refinery, scheduled to come on stream officially on February 22 after 15 years in the works, can now only process Vietnam’s flagship light sweet Bach Ho crude.

Last month BP Plc. signed a preliminary agreement with PetroVietnam to supply sour grades for the plant after the upgrade but said it had no plan to buy a stake in Dung Quat.

The $3 billion refinery is situated in the country’s central region, roughly 900 km (560 miles) north of the main consumption center, Ho Chi Minh City.

Source: www.thanhniennews.com