Petec stakes out of reach for foreigners

PetroVietnam deputy general director Vu Quang Nam previously said that the participation of foreign strategic partners was key to Petec’s business development.

In its proposal, PetroVietnam asked for permission to maintain its oil trading business upon the transfer of stakes to foreign partners.

Luong Hoang Thai, director of the Ministry of Industry and Trade’s Multilateral Trade Policy Department, said that under Vietnam’s World Trade Organization commitments, petrol distribution was not open to foreigners.

With the rejection, PetroVietnam will have to find domestic partners, to reduce its shares in Petec as planned.

According to the company’s development plan, Petec will invest more in infrastructure and attempt to double its market share by 2015.

Petec now has a national network of 128 sale agencies, 1,374 petrol stations and four storages with total capacity of 100,000 cubic metres.

With 12 per cent market share, the company is the third largest in petrol business in Vietnam. Petec aims to raise its market share to 20 per cent in 2015.

The company’s annually report said that petrol business occupied more than 95 per cent of company’s turnover annually.

Petec will spend about VND1.7 trillion ($81 million) during 2011-2015 to complete construction of petroleum warehouses and ports, as well as to beef-up its distribution system.

The projects include Petec Cai Mep, which will feature a 200,000 cubic metre warehouse and a 60,000 dead weight tonnage port and is slated for completion in late 2012 and at a cost of VND698 billion ($33.2 million).

The company will also invest VND40 billion ($1.9 million) in expanding the capacity of the An Hai petroleum warehouse by 20,000 cubic metre, as well as expanding its Can Tho, Long An, and Ha Nam, Nam Dinh and Ninh Binh storage facilities.

These projects will increase the company’s total storage and distribution capacity to 300,000 tonnes in 2015.