Binh Son Refining makes "satisfactory" profits

September 28, 2016 | 08:54

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The Binh Son Refining and Petrochemical Co Ltd earned nearly VND1.04 trillion (US$46.22 million) in profits in the first nine months of this year.

Dung Quat Oil Refinery is run by the Binh Son Refining and Petrochemical Co Ltd in central Quang Ngai Province. The factory meets 30-35 per cent of domestic demand for petroleum products. -- Photo vietnamplus.vn

The company achieved 130 per cent of the target it set for 2016.

Binh Son is an affiliate of the Viet Nam Oil and Gas Group (PetroVietnam) and operates the $3 billion key Dung Quat Oil Refinery in central Quang Ngai Province.

Binh Son General Director Tran Ngoc Nguyen said profitability was satisfactory in the context that products of the company faced stiffer competition from imports.

He said the company only reached VND51.89 trillion in nine-month revenue, or 63 per cent of the annual target. It contributed some VND8.63 trillion to the state budget this year, equivalent to 72 per cent of the annual quota.

Since commercial operations began at the refinery in February 2009, Binh Son has imported 47 million tonnes of crude oil and produced 42 million tonnes of products, which included propylene, polypropylene, liquefied petroleum gas and gasoline, as well as kerosene, diesel and jet fuel.

The refinery, designed to process 6.5 million tonnes of crude oil per year, or 148,000 barrels per day, has meet 30-35 per cent of domestic demand.

Nguyen said the company faced increasing competition this year because imported products enjoyed preferential tariffs following national commitments for free trade agreements.

He said Binh Son is likely to witness even harsher competition next year when the $9 billion Nghi Son refinery and petrochemical complex – another key project of the nation – comes into operation in central Thanh Hoa Province.

The Nghi Son facility is developed by a joint venture between PetroVietnam and Kuwait Petroleum International with Japan's Idemitsu Kosan and Mitsui Chemicals.

The 400ha project in the Nghi Son Economic Zone is expected to meet 70 per cent of domestic demand for energy in the future, with a capacity to process 10 million tonnes of crude oil per year.

Nguyen said since the Dung Quat refinery has a mission to ensure national energy security, Binh Son will run the factory at full capacity.

Prime Minister Nguyen Xuan Phuc has agreed to support a request by Binh Son to adopt a more favourable financial policy, which will be effective from January 2017, to help the Dung Quat refinery compete with imported petroleum products.

In late 2014, the Government approved a $1.8 billion scheme to expand the annual capacity of this refinery to 8.5 million tonnes by 2022. Work is scheduled to be completed by 2021.