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The National Oil and Gas Group (PetroVietnam) has divested from the construction of Vietnam’s tallest skyscraper, PVN Tower, in Hanoi, said its top leader at a recent press briefing.

>> Highest proposed building in Vietnam loses height

The national petroleum conglomerate has reported to the government about the divestment, stressing that it is following the government’s directive in withdrawing state capitals from non-core sectors, said PetroVietnam chairman Phung Dinh Thuc.

The project, located on a 6.5 hectare site in Tu Liem District, would be handed over to a new investor under the management of Hanoi government, he added, without going into detail.

A source from PetroVietnam’s construction arm, PetroVietnam Construction Joint Stock Corp (PVC), told Vnexpress that it is the owner of the $600 million project, of which its contribution accounts for 15-20 per cent of PVN Tower’s total investment.

According to the source, PVC will mobilize capital from the private sector.

The tower project has been projected to start this year, but it may be delayed due to current situation of the real estate market which has already been suffering a downturn.

PVC will recoup the investment capital 15-20 years after the completion of the building.

The project was shortened to 79 floors from 120 floors as seen in the original blueprint in March 2011 after the National Assembly did not agree to let PVN use its VND3.5 trillion profits in 2010 as added working capital for the following year. Instead, the sum was to be transferred to the state budget.

Some legislators showed their concerns over the fact that PetroVietnam had overstretched its investments in non-core sectors, as the PVN Tower is an example.

The building, consisting of A-grade offices, a 6-star hotel, commercial complex and high-grade apartment, was designed to withstand earthquake measured up to the 6th level on the Richter’s scale.

It has three designs with awards worth $50,000, $30,000 and $20,000 for top 3 designers including the US-based Pelli Clarke Pelli Architects, the Australian Fender Katsalidis Architects, and the Spain-based PCIC- Codinachs- Samoo joint venture.

It will be the tallest building once finished - around 500 meters tall, followed by the 345-meter Keangnam Landmark tower and 362-meter VietinBank Tower.

PetroVietnam remains No.1 in the top 10 Vietnamese largest companies in the VNR500 - the 500 Vietnamese largest enterprises in 2011 with an estimated revenue of VND672 trillion, accounting for over 50 per cent compared to VND1.16 trillion worth of total revenues of state-owned groups in 2011.

It will have to focus on its 5 core businesses, including exploration and exploitation of oil and gas, petrochemical, industrial gas, electrical and petroleum engineering services, according to its restructure scheme that has been submitted to the government.

So as to achieve the goal, it will have to divest from all non-core sectors by 2015.