Will PTT redraw the Vietnam petroleum market?
27-07-2015 11:04:30+07:00
Will PTT redraw the Vietnam petroleum market?
The appearance of PTT in Vietnam has raised curiosity about how the petroleum market, in which Dung Quat satisfies one-third of demand, is restructured.
The strong recovery of the national economy will higher energy demand in Vietnam in the years to come, creating more interest in the petrol market.
The US company Murphy Oil has recently signed a cooperation agreement with PetroVietnam on developing projects in Vietnam and the US.
The project on exploiting gas to serve power plants at Ca Voi Xanh oil field in the central region of Vietnam, implemented by Exxon Mobil, has been proceeding well. It is expected to begin manufacturing products by 2021.
Therefore, it is surprising that Victory, a huge petrochemistry and oil refinery capitalized at $22 billion by Thai PTT Group in Nhon Hoi Economic Zone of Binh Dinh province, has remained quiet.
Some analysts believe the the low oil price is the major reason behind the silence.
Jittayapa Wongsaroj from PTT said the sharp fall of the oil price since late 2014 has had little effect on Nhon Hoi oil refinery’s expected economic benefits.
However, the oil price is not the only influencing factor. The investor will also have to consider construction costs, profit margins and product prices.
An analyst commented that all energy projects target long-term benefits; therefore, the oil price drop over the short term will not affect investors’ decisions, if other attractive factors still exist.
These include the government’s preferential policies and commitments by domestic energy conglomerates, including PetroVietnam, to contribute capital to the project.
The project has been added to the national program on the oil and gas industry development.
PTT’s ambitions
Dung Quat’s products can only satisfy one-third of total domestic demand. Therefore, PTT will give the domestic market a new face.
Analysts said that Vietnam is an important ‘card” for PTT to implement its ambitious plan to become the leader in the energy sector in South East Asia, especially when the ASEAN Economic Community (AEC) takes effect, slated by the end of 2015.
In Brunei, PTT is teaming up with local companies to set up joint ventures to exploit and export crude oil. PTT is also present in Cambodia, building a system of providing petrol products and LPG. In Laos, it is moving ahead with a plan to supply oil and develop hydropower plants.
In Vietnam, PTT and its foreign partners are considering different capital contribution models, while expecting support from ECAs (export credit agencies).
