Vietnam to restructure state oil company

Deutsche Presse Agentur
Published: Saturday September 2, 2006

Hanoi- Vietnam's government has approved a plan to restructure the troubled state oil company Petrovietnam, establishing a new conglomerate with four subsidiaries, state-controlled media reported Saturday. Petrovietnam will serve as parent company to the new entity, called the Vietnam National Petroleum Group, the newspaper Thanh Nien reported in its online edition.

The group will have four subsidiaries focusing on oil exploration, oil refining, gas exploration, electricity production, the paper reported.

Saturday's announcement coincided with Vietnamese National Day, celebrating 61 years since Ho Chi Minh declared independence from France.

Crude oil is Vietnam's biggest export, averaging some 400,000 barrels production per day in 2004 and earning at least 15 billion dollars over the past five years.

However, Petrovietnam has been plagued by scandal. Last year, seven officials with the company, including former deputy general director Nguyen Quang Thuong, were sentenced to prison terms of up to 21 years on corruption and embezzlement charges.

Petrovietnam's project to build Vietnam's first oil refinery is seven years behind schedule, slated to begin production in 2009 after delays when construction partners pulled out of the deal.

Vietnam is Southeast Asia's third-largest petroleum producer and reportedly has 600 million barrels in proven oil reserves.

Petrovietnam Vice President Nguyen Dang Lieu stunned investors at a business conference this year by claiming 1.25 billion in both oil and gas reserves, though he gave no breakdown between oil and gas.

© 2006 DPA - Deutsche Presse-Agenteur