ASEAN KEY DESTINATIONS
Concern over Vietnam's oil refinery
At a meeting on Monday, PetroVietnam Group, the project's main investor, attributed the lower costs to the fact that running costs during a trial period had been cut and they had been tax exempt during that time.
A final report on the project with more specific statistics will be finished in December. Vice chairman of the National Assembly, Nguyen Duc Kien, said that this was the first of many national key projects to be reviewed in order to draw lessons and improve effectiveness in the future.
Minister of Industry and Trade Vu Huy Hoang said the refinery operated safely and stably at its full capacity at 6.5 million tonnes of crude oil per annum, satisfying nearly one third of the country's total demand.
According to a report by PetroVietnam, the refinery imported roughly 6.4 million tonnes of crude oil and produced 5.5 million tonnes of a variety of products since operations started last year. Dung Quat sold 5.3 million tonnes of products making VND25 trillion ($1.28 billion), VND3 trillion ($153.8 million) of which went to the State budget.
PetroVietnam also reported to the National Assembly the project's internal rate of return (IRR) of nearly 7.7 per cent.
The refinery generated 1,400 jobs and made a great contribution to the social and economic development of Quang Ngai Province.
However, experts pointed out some of the project's shortcomings. They claimed that it took nearly 13 years to complete after it had first been suggested, with construction suspended for over nine years.
Luong Van Ket, deputy director of the Ministry of Planning and Investment's Industrial and Economic Department said that the IRR should be higher than the 7.7 per cent rate set by PetroVietnam.
He also expressed his concern over VND1.5 trillion that had not been disbursed due to problems on legal documents and procedures.
Experts also said that the refinery's capacity should be raised to 10 million tonnes of crude oil per year rather than the current rate of 6.5 million tonnes because the average capacity of other refineries around the world is 10-12 million tonnes.
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