Kuwaiti PM dips into Vietnam’s oil

The leader highlighted oil and gas as a key sector for co-operation during a recent visit

During last week’s three-day official visit to Vietnam, Kuwait’s Prime Minister Sheikh Jaber Mubarak Al-Hamad Al-Sabah held talks with his Vietnamese counterpart Nguyen Xuan Phuc and paid a courtesy visit to State President Tran Dai Quang and Party General Secretary Nguyen Phu Trong.

Leaders of both sides stressed that the oil and gas sector would be a major focus for collaboration between the countries in the time to come, in addition to co-operation in the sectors of trade, investment, employment, agriculture, and tourism.

During the visit, Vietnam’s state-owned oil and gas giant PetroVietnam and Kuwait Petroleum Corporation’s (KPC) Kuwait Petroleum International Ltd (KPI) signed a deal to continue their co-operation within the $9 billion Nghi Son Oil Refinery and Petrochemical Complex Project in the north-central province of Thanh Hoa. The project will process crude oil provided by KPC, which holds a 35.1 per cent stake in this project.

Construction on the plant began in October 2013 and is expected to be completed in late 2016. It is scheduled to be put into official operation in the third quarter of 2017, and will meet about 40 per cent of Vietnam’s demand for petrol.

On April 18, Japan’s Idemitsu Kosan Co., Ltd announced that it and KPI had applied to register joint venture company Idemitsu Q8 Petroleum Limited Liability Company, with the purpose of distributing petroleum products in Vietnam. The products will come from the Nghi Son complex, where Idemitsu and KPI have a stake.

“Idemitsu and KPI intend to promote retail and wholesale operations, mainly through the construction and management of service stations across Vietnam,” said an Idemitsu press release. “Idemitsu and KPI will secure a stable supply of products for the growing Vietnamese market, where demand for petroleum products is expected to follow a steady upward trend.”

During the 2011-2013 period, annual two-way trade exceeded $700 million on average with $836.7 million recorded in 2011, mostly driven by Vietnam’s diesel imports from Kuwait.

Last year, due to the impact of falling oil prices and a decrease in Vietnam’s imports of Kuwaiti diesel, the bilateral trade dropped to just $220 million.

During the visit, the two countries also signed co-operation deals on culture and art, and sports. The two countries’ chambers of commerce and industry also inked a co-operation agreement. Vietnam and Kuwait also pledged to further their bilateral co-operation in employment, agriculture, and tourism.

For example, via the Kuwait Fund for Arab Economic Development, Kuwait has provided loans worth $160 million for Vietnam to help the country implement 13 rural infrastructure development projects.