Vietnam’s First Refinery Opens

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Feb. 23 – The country's first oil refinery opened yesterday to much fanfare when the ceremony was broadcast on prime-time television and featured a special opening program.

The refinery is slated to answer an estimated one-third of Vietnam’s fuel demand next year. The US$3 billion plant with a capacity of 148,000 barrels daily was developed by a group of contractors mainly led by France’s Technip SA.

It is found at the Dung Quat Bay in the central province of Quang Ngai, a site that garnered criticism from foreign investors because it is situated in the country’s most remote and typhoon-prone region and is hundreds of miles from the local oil fields and industrial base.

“This investment was the right decision,” Prime Minister Nguyen Tan Dung was quoted by Bloomberg as saying.“It is a milestone for our country.”

The refinery will be managed by state-owned Vietnam Oil & Gas Group and opens at a time when there is an abundant supply of refined products and lower crude prices.

Vietnam Oil & Gas Group was forced to spearhead the project alone after Total and Russia’s OAO Zarubezhneft backed out as partners.The World Bank and the International Monetary Fund even doubted the plant's impact to the country's economy.

In 2007, Vietnam was the region's third-largest producer after Indonesia and Malaysia, at 340,000 barrels per day.