Vietnam’s top oil refinery to avert shutdown as cash flow improves

Project led by Japan’s Idemitsu expected to make November debt payment

Vietnam’s largest oil refinery is expected to avoid a shutdown by making a November debt repayment thanks to improved cash flow.

Japanese energy group Idemitsu Kosan, the top investor, has taken steps to boost the Nghi Son refinery’s capacity usage, helping it secure an operating profit.

A scheduled shutdown for maintenance in August had raised the specter of a longer suspension due to a lack of funds amid disagreement among shareholders, which include the state-run Vietnam Oil and Gas Group, or PetroVietnam.

With more repayment deadlines looming next year, the operating company is looking to approach the Vietnamese government with a debt-restructuring proposal.

Nghi Son Refinery and Petrochemical, operator of the refinery, is a joint venture of Idemitsu, Kuwait Petroleum Europe, Mitsui Chemicals and PetroVietnam.

The operator was seeking to restructure debts to a group of banks led by the state-run Japan Bank for International Cooperation. Discussions stalled as PetroVietnam balked at extending the loan repayment period.

Commercial operation began in 2018 after delays in construction. Cash flow later deteriorated in the COVID-19 pandemic.

By Naoyuki Toyama – Nikkei Asia – June 22, 2023