Home » Business » PetroVietnam has nearly $300 million stuck in non-core business

PetroVietnam has nearly 300 million stuck in non-core businessAt a press conference held yesterday, Mr. Nguyen Xuan Son – Deputy Director of the Vietnam Oil and Gas Group (PetroVietnam), said the group’s total investment in non-core fields is about VND5.8 trillion (about $300 million), mainly in banking and finance, insurance and real estate fields.

“This amount is much less than the group’s charter capital of VND300 trillion,” Son said.

The largest share of PetroVietnam’s non-core portfolio is the one in the Petroleum Finance Company (PVFC), which has been merged with the Western Bank to become the PV Combank.  PetroVietnam currently holds 78 percent of capital of this bank, worth VND4.68 trillion.The group also has 20 percent of capital in Oceanbank and 35 percent in PetroVietnam Insurance Company (PVI).

However, divestment of PetroVietnam is difficult. “On one hand, the group must withdraw but have to preserve capital at the highest level. On the other side, the group has to choose the best time for disinvestment,” said Mr. Phung Dinh Thuc – PetroVietnam Chairman.

Mr. Son added that divestment must ensure efficient investment, based on market situation. “Hopefully by 2015 when the market situation is good, the group will withdraw all capital,” he said.

Regarding the group’s overseas investment, PetroVietnam’s deputy general director said the group has signed 18 oil exploration contracts totaling $6.5 billion and so far approximately $1.8 billion has been disbursed.

The official said projects in Russia, Malaysia, Peru and Algeria are effective and begin yielding profit. Particularly, the project in Venezuela faces some difficulties due to the impact of the investment climate and the exchange rate. “Overseas investment needs a long time. We cannot claim immediate effectiveness,” Chairman Phung Dinh Thuc emphasized.

When being asked whether the Group is concerned of oil excessiveness when many oil refinery plants are being built, Thuc said that under the current strategy, Vietnam will have only three oil refineries: Dung Quat, Nghi Son and Long Son.

In the period of January-September, the total oil production of PetroVietnam reached 19.8 million tons, equivalent to 79 percent of the yearly plan and increased by 2 percent compared to the same period of last year.

The group also supplied to the national grid of about 12.4 billion kWh of electricity, equivalent to 90 percent of the yearly plan, an increase of 13 percent over the same period.

Its total turnover in this period was VND548.3 trillion, equivalent to 85 percent of the 2013 plan. It paid taxes of VND128 trillion, VND20.7 trillion more than plan.

It is estimated that this year the group will earn VND732 trillion in revenue, pay taxes of VND170 trillion, exceeding the plan by nearly 15 percent.

(VietnamNet)

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