BP To Supply Half of Dung Quat’s Crude Needs

PetroVietnam will sign a deal in early 2009 with BP Plc, Europe’s second-biggest oil company, to supply at least half of the crude needed by the Dung Quat plant, Thang said.

Overseas suppliers of crude to the refinery, the country’s first, would stand a better chance of getting a stake in the plant, said Dinh La Thang, chairman of state-run Vietnam Oil & Gas Group. PetroVietnam, as the group is known, is selling as much as 49 percent of the refinery, Thang said.

Dung Quat refinery is expected to help the country reduce its dependence on fuel imports and narrow the trade deficit. The US$2.5 billion plant, set to begin operating in February, will be capable of processing about 6.5 million tons of crude annually.

The plant may generate annual revenues of about VND40 trillion ($2.28 billion) if global crude prices trade around $70 a barrel, Thang said.

Fuel imports may fall by about 3 million metric tons next year when the refinery starts operating. Imports of oil products jumped 40% to $10.8 billion this year, according to government data.