The Viet Nam National Petroleum Group (Petrolimex) asked the Government for permission to halt the Nam Van Phong oil refinery project on Tuesday, local media reported.
Petrolimex said the reason for the proposal was that the group wanted to focus its resources on other projects.
Deputy Minister Do Hoang Anh Tuan said at the working session that the finance ministry generally agreed with the proposal.
Deputy Minister of Planning and Investment Nguyen Van Hieu said that the country already had two big oil refinery plants – Dung Quat and Nghi Son – so there was no urgent need for a third to ensure energy security.
The Nam Van Phong oil refinery project got the Government’s green light in 2008 with a estimated investment of US$4.4-4.8 billion at that time. The initial plan was for the project to be started in 2011 and go into operation in 2013 with a capacity of 10 million tonnes per year.
In 2014, JX Nippon Oil & Energy signed a memorandum of understanding with Petrolimex to found a joint venture to implement the project.
Other giant oil refinery projects have also been put on hold: Vung Ro ($3.2 billion) in Phu Yen Province and Nhon Hoi ($22 billion) in Binh Dinh Province.
At the working session, the group asked for an extension from 2018 to the 2019-20 period for its capital divestment deadline, and a rise in its foreign ownership cap to 49 percent.
The group now holds a market share of 48 per cent of the domestic petrol market.
Deputy Minister of Industry and Trade Tran Quoc Khanh said that dominating market share did not mean Petrolimex held a monopoly because there were 29 petrol importers and 155 distribution firms nationwide.
The market was competitive and Petrolimex did not enjoy any preferential treatment, he said.
According to Pham Van Thanh, chairman of Petrolimex, the group finished restructuring by completing the formation of six corporations running under the model of parent-subsidiary companies, as well as joint stock companies for the 2013-17 period.
Petrolimex is scheduled to complete the merger of Petrolimex Group Commercial Joint Stock Bank and the HCM City Development Bank this year, which is expected to raise Petrolimex’s profits by VND1 trillion ($43.5 million).
In the first eight months of 2018, Petrolimex’s pre-tax profit was VND3.43 trillion and its State budget payment reached VND29 trillion.
The group earned VND153 trillion in 2017 with pre-tax profit reaching over VND4.78 trillion. It contributed more than VND38 trillion to the State budget over the year.