Saudi Arabian Oil Company (Saudi Aramco) has decided to withdraw from the development of the $22 billion Victory Nhon Hoi refinery and petrochemical complex in the south-central coastal province of Binh Dinh, along with Thailand’s largest energy company PTT Public Company Limited (PTT), according to newswire ICIS.com.
According to a source from PTT, the reason for Saudi Aramco’s withdrawal is that the two investors have yet to find a suitable Vietnamese company to partner with for the project.
In spite of Saudi Aramco’s withdrawal, PTT still considers Vietnam as a strategic investment location and will continue to develop the project by transferring it to IRPC, a 38.5 per cent PTT-owned company.
“As a shareholder, PTT will support IRPC in determining the project’s size, the scope of necessary investment as well as finding potential partners,” the PTT source said.
However, the date to start construction has yet to be set because in late June PTT postponed plans due to the uncertainty of the global oil market.
According to Nguyen Ngoc Toan, deputy director of the Nhon Hoi Economic Zone Management Authority, along with the uncertainty of the global oil market, the company has yet to complete the project study as well as dossiers for the investment certificate. It will delay the project and review the investment plan at the end of the year.
In 2014, PTT and Saudi Aramco agreed to hold 40 per cent each in the project. Besides, the two investors wanted a Vietnamese partner to take part in the joint venture, as was mentioned earlier by PTT.
The Thai firm proposed partnering up with state-run Vietnam National Petroleum Group (Petrolimex) and held working sessions with provincial authorities and Petrolimex representatives, but eventually failed.
While PTT confirmed that a local partner was not an essential condition for its investment, Saudi Aramco insisted on a Vietnamese enterprise involved in the project. This is one of the reasons for the investors’ delay in application for an investment certificate.