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Petrovietnam seeks to sell part of 1st refinery

State oil group Petrovietnam has sought government approval to sell part of the country’s first oil refinery to foreign investors, a state-run newspaper quoted an executive of the group on Monday a saying.

Petrovietnam also sought permission to sell an up-to-49% stake in Binh Son Refining Petrochemical Co Ltd, its unit to trade products for Dung Quat refinery, the Planning and Investment Ministry-run Dau Tu (Investment) newspaper said.

Petrovietnam has talked with several firms, such as India’s Essar Oil, Royal Dutch Shell, Russian oil firms Zarubezhneft and Rosneft, over selling an undisclosed number of shares in the $2.5 billion state-owned refinery, Dau Tu said. Officials at Petrovietnam were not immediately available for comments.

The newspaper said talks were also about further investment to upgrade the $2.5-billion, 140,000 barrels-per-day (bpd) refinery which is scheduled to test run late this month before coming onstream in February 2009. Given the falling crude oil supply from Vietnam’s top oil field Bach Ho, one of the criteria to pick the foreign investor in Dung Quat refinery will be its ability to ensure a long and stable crude oil supply, Dau Tu said.

Vietsovpetro, the operator of Bach Ho, expects the field’s output to fall 6.3% to 148,000 bpd in the five months ending December compared to the average in the Jan-July period. The venture is a 50/50 venture between Petrovietnam and Zarubezhneft.

When fully operational, Dung Quat refinery would supply more than 40% of the consumption in the country of 86.5 million people with more than 20 million motorbikes. Demand for refined oil products is expected to grow 13-15% annually by 2010. (Reuters)