Vietnam to source crude oil from Azerbaijan
MANABU ITO, Nikkei staff writer
HANOI -- Petrovietnam (PVN) will purchase crude oil from Azerbaijan over the next two years to ensure stable supply.
Petrovietnam Oil and Binh Son Refining and Petrochemical, both of which are under direct control of state-owned PVN, signed a purchase agreement with the State Oil Company of Azerbaijan Republic (Socar) earlier this month.
The contract, which lasts through 2016, will allow Vietnam to source up to 3.5 million barrels of crude oil from Azerbaijan this year. Other details, including deal prices, have not been disclosed.
PVN opened the Dung Quat oil refinery in Vietnam's central province of Quang Ngai in February 2009 through Binh Son Refining and Petrochemical. The facility, which has an annual output capacity of 6.5 million barrels, mainly refines crude oil from the Bach Ho oil field in southern Vietnam.
Oil production at the Bach Ho field has recently declined, making operations there more expensive. PVN hopes to secure stable supplies of oil from Azerbaijan to better produce fuels, including gasoline and diesel, at low costs.
PVN plans to source crude oil from Kuwait for another refinery, which is under construction in the Nghi Son economic zone.