With the involvement of international investors, competition in the local retail fuel market has stiffened.
Chairman of Vietnam National Petroleum Group (Petrolimex), Bui Ngoc Bao reviewed the firm’s plans to expand its future operations and undergo state stake divestments. Japan’s JX Nippon Oil and Energy, a leading group in Japan with 100 years of experience, in 2016, acquired an 8 per cent stake in Petrolimex, leading to an improvement in business governance by increasing transparency and operational efficiency as well as minimizing risks.
Petrolimex has been able to achieve targets of cutting operational costs by 5-10 per cent a year, since the business plan for three years has been built alongside the traditional five-year plan, in addition to an increase in the sales volume by 3.5 per cent annually.
Sales volume rose 7 per cent on-year, in the first nine months of this year, fulfilling 76 per cent of the group’s sales target. Petrolimex’s total assets reached VND54.2 trillion ($2.46 billion) as of December 31, 2016. In 2016, consolidated net revenue stood at VND123 trillion ($5.59 billion), and pre-tax profits reached VND6.3 trillion ($286.36 million), up 68 per cent on-year.
Petrolimex posted total consolidated net revenues of nearly VND112.43 trillion ($5.11 billion), in the first nine months of this year, up 27.7 per cent on-year, while total consolidated pre-tax profit reached VND3.55 trillion ($161.36 million), meeting 75.7 per cent of the whole-year target. Profit and revenue of this year is expected to surpass the targets with these results.
Petrolimex has two massive projects. The feasibility study for the over $7 billion South Van Phong oil refinery project is over and is in the process of seeking governmental approval for investment incentives.
Petrolimex is also preparing to develop a liquefied natural gas (LNG) project to serve power projects and is reviewing a location. State-run Electricity of Vietnam is also proposing that the government shift to this fuel for new power projects. Petrolimex plans to build more LNG plants when market demands increase
The entry of international players and the opening of the first foreign-owned fuel station in Hanoi is paving the way for competition. However, with 2,400 fuel stations and 70-100 new ones opening every year, Petrolimex holds nearly 50 per cent market share. Source: Vietnamnet Bridge PWKD10112017
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