Japan’s second-biggest refiner, Idemitsu Kosan, has just said it has no plans to provide new financial support to Vietnam’s Nghi Son Refinery and Petrochemical, which has had to cut output by 80% due to lack of funding, Reuters quoted a group leader as saying on February 9.
Vietnam’s largest oil refinery avoided a lengthy shutdown last month, after a major shareholder secured short-term funding following disagreements among shareholders over funding to buy crude oil, and previously cut operating levels.
“The refinery is taking measures to bring the operating speed back to normal,” Yoshitaka Onuma, general manager of Idemitsu, said at a press conference on the group’s earnings in Feb but declined to say when.
Idemitsu has a 35.1% stake in the Nghi Son oil refinery which has a capacity of 200,000 barrels per day, meeting up to one-third of Vietnam’s petroleum needs. Other shareholders are Kuwait Petroleum with a 35.1% share, PetroVietnam with a 25.1% share, and Mitsui Chemicals Japan with a 4.7% stake.
Mr. Onuma said the refinery’s shareholders are currently negotiating to improve the financial situation of the refinery because “capital is not abundant.”
When asked if Idemitsu would provide new financial support to Nghi Son, Mr. Onuma replied, “We have no such plan at the moment.”
Nghi Son Refinery and Petrochemical Plant have struggled with many difficulties since the outbreak of the COVID-19 pandemic.
At the end of last month, PVN – Nghi Son’s product outsourcing unit – and Nghi Son Refinery Co., Ltd. reached an agreement on short-term financial support for Nghi Son Refinery and Petrochemical Plant to continue operating, avoiding the stopped production as scheduled from mid-February due to financial difficulties.
With a market share of about 35%, information about the possibility of shutting down Nghi Son Oil Refinery has raised concerns about the risk of disruption of petroleum supply in the domestic market.
With an investment capital of $9 billion, Nghi Son Refinery and Petrochemical Plant has a phase 1 capacity of 200,000 barrels of crude oil per day, equivalent to 10 million tons of crude oil per year, nearly double Dung Quat Oil Refinery in Vietnam’s central province of Quang Ngai.
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