PV Oil Co., Vietnam’s state-owned oil marketing company, cut its offer price for Bach Ho crude loading from April to September for a second time after buyers rejected the previous level, traders said.

PV Oil reduced its offer to a premium of $4.56 a barrel over its benchmark from $5.03, said two traders involved in talks with the company who asked not to be identified because of confidentiality agreements. A company official who declined to be identified confirmed the price. PV Oil originally proposed to sell at a premium of $5.16 a barrel.

Bach Ho’s premium is based on the price of benchmark Indonesian grade Minas crude oil derived from assessments published by two oil-pricing services, the Asian Petroleum Price Index and Platts. Royal Dutch Shell Plc, Sumitomo Corp., Chevron Corp. and China International United Petroleum & Chemicals Ltd., or Unipec, are among the buyers.

The latest price is lower than the record premium of $8.09 a barrel that buyers paid for supplies loading between October 2008 and March 2009. PV Oil received a premium of $6.53 a barrel for cargoes to be loaded in the six months to September 2008.

PV Oil typically sells crude oil in cargo sizes of between 400,000 barrels and 600,000 barrels. Vietnam’s output has been declining after reaching a record 415,000 barrels a day in 2004 because of falling production from Bach Ho. The field has been operating since 1986.

Falling Output

Vietnam’s government said Dec. 31 that crude oil exports may fall 13.7 percent in 2009 because of the start up of the nation’s first refinery at Dung Quat.

Oil exports will drop to 12 million metric tons in 2009, said Vu Huy Hoang, minister of trade and industry. By value, exports may decline 56 percent, the minister said.

The country’s output fell 5.7% in 2008 to about 305,000 barrels a day, state-run producer Viet Nam Oil & Gas Group said Dec. 30.

Bach Ho oil is pumped from a field off Vietnam’s coast by a Russian-Vietnamese joint venture. Bach Ho is a so-called medium- sweet crude oil, with 0.035 percent sulfur by weight. The crude oil is processed in refineries in China, Singapore and Japan. (Bloomberg)