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 4 Apr 2009

Petrovietnam to contract BP for crude supply

State oil firm Petrovietnam said on Friday it would start implementing a crude oil supply contract with British oil major BP Plc for the country's first oil refinery, Dung Quat, in the second quarter of 2009, reported Reuters.

The Hanoi-based oil group said in a business plan sent to Reuters that executing the supply contract was one of its major tasks in the quarter ending June but stopped short of providing any further details.

Petrovietnam also said it would acquire BP's stakes in two exploration blocks, 05-2 and 05-3, off Vietnam's southern coast after BP withdrew from the project.

A Petrovietnam official close to the operators of the refinery said under the engineering contract with the builder Technip, the 140,000-bpd Dung Quat refinery would have to use exclusively Vietnam's flagship Bach Ho crude until this October.

"If Dung Quat uses any other foreign crude, it would have to absolutely be after October and the crude must be the same grade, light and sweet like Bach Ho," the official who declined to be identified, said.

He said Dung Quat would use about 600,000 barrels of Bach Ho in the second quarter, or about just 6,600 barrels per day, as it is still under a "performance test".

In January Petrovietnam signed the first contract to supply foreign crude oil for Dung Quat with BP, under which BP would supply up to 70,000 bpd of crude oil to replace Vietnam's Bach Ho grade, but no timeframe was provided.

BP's head of Supply and Trading, Eastern Hemisphere, Clive Christison, has said the firm would consider supplying Dung Quat with sweet crude before 2011.




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