PetroVietnam to ramp up divestitures

January 24, 2013 | 09:43

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PetroVietnam has been told to accelerate its equitisation process and pull capital from its affiliates.

According to PetroVietnam’s restructuring project from 2012-2015 which got the prime minister’s go-ahead, the group should focus on oil and gas exploration, reconnaissance and exploitation, oil refining, gas industry, electrical industry and high quality gas services. Among which, oil and gas exploration and exploitation are core business lines.

Accordingly, the state group continues retaining entire charter capital at PetroVietnam Exploration Production Corporation (PVEP) and maintaining current charter capital stake at PetroVietnam Drilling & Well Service Corporation-PV Drilling (50.38 per cent), PetroVietnam Technical Services Corporation (PTSC) (51 per cent), Russian-Vietnamese VietsovPetro Joint Venture (51 per cent) and RusvietPetro Company Limited (49 per cent).

However, a string of PetroVietnam’s affiliates are also required to be equitised as well as reduce the group’s stake during the period, namely Binh Son Refining and Petrochemical Company Limited (BSR), one-member PetroVietnam Ca Mau Fertiliser Company Limited (PVCFC) and Dung Quat Shipbuilding Industry Company Limited.

Post-2015, several other members shall be equitised, including PetroVietnam Oil Corporation (PV Oil), PetroVietnam Power Corporation (PVP), in which PetroVietnam stake will be scaled down to 75 per cent.

The government also proposed PetroVietnam entirely divest from Lai Vu Shipbuilding Industrial Zone Company Limited, Ocean Bank, Green Indochina Development, PetroVietnam Trade Union Finance Investment (PVFI) during 2012-2015. After 2015, PetroVietnam shall contemplate withdrawing entire capital from Petrosetco and several others.

PetroVietnam’s shakeup plan involved a number of its affiliates and their employees, according to its chairman Phung Dinh Thuc. “However, PetroVietnam will do its utmost to get the project underway in the upcoming period,” said Thuc.

Amid current financial hardships at home and abroad, it will be extremely difficult for PetroVietnam to carry out equitisation plan and sell stake at affiliate units to take back capital as required by the government.

However, many affiliates were still appealing to investors as benefiting from diverse incentives like the case of BSR, said Thuc.