A panoramic view of the Dung Quat oil refinery in central Vietnam. (Photo: Nguyen Khanh/Tuoi Tre)
Gazprom Neft, a major oil producer and refinery in Russia, has dropped talks with energy firm PetroVietnam on purchasing a 49% stake in Binh Son Refining and Petrochemical Company Ltd. (BSR), which operates the Dung Quat oil refinery in central Vietnam, the Tuoi Tre (Youth) newspaper reported.
The Russian oil giant will consider opportunities to acquire a stake in BSR in the future when the latter goes public, the newspaper cited a PetroVietnam source as saying.
During the negotiation process, Gazprom Neft asked for preferential treatment in order to join the expansion plan of the refinery. However, the Vietnamese government said that it would not continue granting low import tariffs for the refinery after 2018.
Founded in 2008, BSR now runs the Dung Quat oil refinery, the first of its kind in the country. The refinery has a capacity of 148,000 barrel per day or 6.5 million tons of crude oil per year.
BSR last year announced a $1.8 billion plan to expand the capacity of the refinery to 8.5 million tons per year. The expansion will enable the refinery to process sour crude oil instead of sweet and light crude from the Bach Ho field only.