State-owned Indian Oil Corp (IOC) has bid for a stake in Vietnam’s Binh Son Refining and Petrochemical Company as it looks at the South Eastern nation to expand business beyond Indian shores. IOC is among the at least four companies that have evinced interest in becoming strategic partner in Binh Son Refining and Petrochemical Company (BSR) by taking 49 per cent stake, official sources said.
Indonesian state-owned oil firm Pertamina, Vietnam’s biggest petrol dealer Petrolimex and Thailand’s Bangchak Corporation Public Company Ltd are the other firms which have put in an expression of interest (EoI). Vitol of Switzerland and Spain’s Repsol too had initially shown interest in taking a stake in the company but it was not clear if they put in an EoI at expiry of the deadline last month.
Binh Son Refining and Petrochemical Company owns and operates Vietnam’s first oil refinery, Dung Quat Refinery (DQR). It has a capacity of 6.5 million tonnes a year, meeting over 30 per cent of Vietnam’s demand for gasoline and oil. It produces up to 3.2 million tonnes of diesel per annum and up to 2.5 million tonnes of petrol. LPG, jet fuel, polyproylene and propylene are other petroleum products its produces.
The refinery is being expanded to 8.5 million tonnes by 2021. In January, the Vietnamese government had sold 7.79 per cent stake through an initial public offering of the company to raise $245 million. BSR is among dozens of units under the wing of state oil and gas company PetroVietnam (PVN).
After selling a 49 per cent stake to strategic investors, state-ownership in BSR will come down to 43 per cent. Sources said IOC, India’s biggest oil refiner, is looking at Myanmar, Bangladesh and Vietnam to expand its oil refining and fuel retailing business.
With Vietnam short in refinery products, IOC believes it can bring efficiencies and help expand BSR. IOC is looking to export aviation turbine fuel (ATF) and cooking gas LPG to Myanmar and auto fuel to Bangladesh. It currently has a fuel retailing subsidiary in Sri Lanka and sells products in Mauritius and West Asia.