Vietnam's sole oil refinery gears up for IPO

Its initial public offering (IPO), which was previously set to take place during the third quarter of this year, will now be held by the end of the year, with the aim of funding strategic projects and increasing transparency in corporate governance, BSR said in a statement on its website.

The company will focus on petrochemical operations and expects investors to join it in ramping up the petrochemical market, CEO Mr. Tran Ngoc Nguyen said in the statement.

The number of shares to be offered to strategic investors and to the public were not specifically mentioned in the statement.

However, in an interview with VET late last year, BSR Chairman Mr. Nguyen Hoai Giang said the company was keen to have 35 per cent go to strategic investors, adding that a host of foreign oil giants, including Thailand’s State-run PTT and Russia’s Gazprom Neft, had expressed interest.

At the time, the Russian investor was staying with its plan to purchase shares in BSR despite dropping talks over it acquiring 49 per cent earlier last year, citing unfavorable conditions, according to Mr. Giang.

He was not available for further comment at the time of writing.

BSR has a plan to expand capacity at Dung Quat by 30 per cent while reducing production costs due to cheaper oil prices.

After completing its expansion in 2021, Dung Quat will be able to meet half of Vietnam’s fuel demand.

Its current capacity is 148,000 barrels per day, which can satisfy one-third of the domestic needs.

The country’s demand for oil and petroleum products has increased every year and the volume imported in 2015 rose 18.7 per cent, according to data from the General Department of Customs under the Ministry of Finance.

According to BSR, it earned estimated total revenue of $80 million in the first quarter of this year.

Pre-tax profit has not been revealed. It earlier set a pre-tax profit target of VND1.68 trillion ($73 million) for the year as a whole, which is significantly lower than its actual pre-tax profit of VND5 trillion ($219.45 million) in 2016.

2016 was viewed as a successful year for BSR, as total revenue reached more than $3.1 billion and it contributed over $483 million to the State budget, exceeding its plan by $88 million.

Production was estimated at 6.84 million tons and sales at 6.8 million tons.

The $3-billion refinery became operational in 2009 with a designed processing capacity of 6.5 million tons of crude oil per year, meeting 30 per cent of domestic demand for distillates.

It plans to expand its annual capacity by 30 per cent to 8.5 million tons at a cost of $1.8 billion.