Dung Quat Refinery plans for IPO

09:38 | 20/05/2017
Vietnam’s first oil refinery operator Binh Son Refinery and Petrochemical Co Ltd (BSR) has planned its domestic initial public offering (IPO) with 5-6 per cent of its capital in the fourth quarter of the year.
An overview of Dung Quat Oil Refinery in the central Quang Ngai Province.-VNA/VNS Photo Nguyen Dang Lam

The information was announced on Thursday. BSR, which owns the $3-billion Dung Quat Oil Refinery, added that the remaining shares would be offered to strategic investors.

Tran Ngoc Nguyen, BSR’s general director, said it has selected a consultancy firm to implement divestment plans at the three capital contribution units of PV Building, PMS and PVOS to prepare for the IPO.

Answering a question on the modest rate of the IPO, Nguyen said BSR had carefully considered the number of offered shares and taken note of recommendations from the consultancy firm.

Nguyen added that all information on business value and offered price would be announced next week after receiving approval from the Ministry of Industry and Trade.

The IPO will be divided into two periods. During the first period, BSR will be transferred into a privatisation model, offering shares to its staff and an IPO which is set to be completed in 2017. It will complete the offering to strategic investors in the next 12 months.

He expected BSR to sell up to 36 per cent of its shares to strategic investors with strong financial resources and experience in the refinery sector.

Sharing the idea, Nguyen Hoai Giang, BSR’s chairman, said the privatisation model had been under consideration since 2013.

Giang affirmed the determination for privatisation despite the unfavourable conditions of the financial market and decreasing oil prices, which had affected investors’ confidence.

He expected BSR would be privatised at the earliest to attract strategic investors to participate in the refinery’s expansion and development in the future.

Since its operations in 2009, the refinery’s total revenue is VND834 trillion and profit is VND13 trillion. In the first five months of the year, its revenue reached VND35 trillion, representing an increase of 18 per cent from the set target.

Temporarily closed for overall maintenance

Dung Quat Oil Refinery in central Quang Ngai Province will be temporarily closed to undergo a nearly two-month full maintenance process.

The general director said the third overall maintenance will start on June 5 and continue for 52 days.

“Some 4,000 specialists, architects and workers, with special equipment and thousands of machines will participate in the maintenance. The maintenance aims to help the refinery run stably and safely and extend its operation time after 3-4 years,” he said.

The maintenance will be divided into seven main packages. Three foreign contractors from Singapore, Malaysia and South Korea will participate in the maintenance.

However, BSR will take measures to shorten the scheduled time of 5-7 days. It is estimated that the refinery could increase revenue by VND250 billion and contribute VND30 billion per day if the maintenance time is shortened, he added.

Dung Quat, the first-ever oil refinery of Viet Nam, opened in 2009 with capacity of 6.5 million tonnes of crude oil annually, or 140 thousand barrels per day. The refinery was put into official operation in 2009 and has undergone overall maintenance twice -- in 2011 and 2014.


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