The Prime Minister asked Idenitsu and its partners to continue restructuring the Nghi Son Refinery and Petrochemical project to cut losses as soon as possible.
On the evening of December 16, Prime Minister Pham Minh Chinh received Mr. Susumu Nibuya, Permanent Vice President and CEO of Idemitsu Corporation - one of the four joint ventures participating in Nghi Son Refinery and Petrochemical Plant, in Tokyo, Japan.
The factory, which holds one-third of the country’s gasoline supply, is currently facing many challenges, with large accumulated losses. The Vietnam Oil and Gas Group (PVN) is still covering the losses as the factory operates commercially.
At yesterday's meeting, the Prime Minister asked Idemitsu and its partners to continue restructuring the project, improve management efficiency, operating procedures and apply technology to reduce input costs, and "cut losses as soon as possible for the project".
Mr. Susumu Nibuya said that the parties involved will be more serious in implementing the restructuring of this project.
Previously, during the talks, Prime Minister Pham Minh Chinh and his counterpart Kishida Fumio agreed to establish a joint coordination group between the two governments to promote the progress and effectiveness of a number of ongoing projects between the two countries, such as the Nghi Son Refinery and Petrochemical project.
Prime Minister Pham Minh Chinh received Mr. Susumu Nibuya, Executive Vice President and CEO of Idemitsu Corporation, on December 16, in Tokyo. Photo: Nhat Bac
Idemitsu is Japan's leading energy group, with revenue in 2022 reaching over 51.4 billion USD, and total assets at the end of last year of over 34 billion USD. In Vietnam, this group is one of 4 joint ventures participating in Nghi Son Oil Refinery, holding 34% of shares.
During a visit to the plant last month, the Prime Minister requested that Vietnamese and Japanese partners carry out a comprehensive restructuring of the project, in terms of capital, interest rates, management, and personnel. He also requested that more Vietnamese join the plant’s Board of Directors, which is currently dominated by foreigners.
Currently, the total disbursed capital for the project is 8.78 billion USD, of which the capital contributed by investors is more than 4.2 billion USD, and the loan capital from banks is more than 4.5 billion USD - accounting for a large proportion with high interest rates.
On the same day, meeting with Mr. Hidenori Harada, Chairman and CEO of MOECO - a joint venture partner in the Block B - O Mon gas project , the Prime Minister acknowledged the group's efforts in resolving the project's long-standing difficulties and obstacles.
Mr. Hidenori Harada said that the joint venture parties have reached an agreement to resolve the problems in the Block B - O Mon gas project based on the principles of harmonious benefits and shared risks. MOECO's CEO also proposed a number of solutions to promote the project, including the early amendment of regulations in 3 circulars of the Ministry of Industry and Trade.
In response, the Prime Minister said he would direct the Ministry of Industry and Trade to immediately amend any remaining regulations. He asked MOECO to work with its joint venture partners to ensure progress and quality, and that the Block B - O Mon gas project "must have its first gas flow by 2026 at the latest".
In the coming time, the Prime Minister suggested that the group expand its investment and business in Vietnam, especially in areas of strength such as equipment manufacturing and technology transfer with Vietnamese partners.
The Block B gas field development project is expected to have an estimated recoverable gas reserve of 107 billion m3 in 20 years, with a total cost of more than 11 billion USD, and supply gas to power plants in Kien Giang and O Mon (Can Tho). With the first gas flow scheduled for late 2026, gas from Block B will supply the O Mon 1, 2, 3 and 4 power plant complex with about 5 billion m3 per year.
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