Nghi Son Oil Refinery in Operation: PVN Will Have to Cover Losses of Thousands of Billions of Dong
Not only that, the State budget arising in 2017 is also expected to decrease by about 1,377 billion VND and will decrease even more in the following years.
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| It is likely that Nghi Son oil refinery will not be able to enter commercial operation until November 2017. Photo: Internet |
This is new information released by the State Budget Department (Ministry of Finance) when assessing the impact of putting the Nghi Son oil refinery (Thanh Hoa) into operation on budget revenue. It is expected that this plant will begin operating from 2017.
Specifically, according to the State Budget Department, in 2017 when the factory comes into operation, total budget revenue is expected to decrease by VND 1,377 billion, the following years will decrease even more sharply, 2018 will decrease by VND 10,929 billion, 2019 will decrease by VND 10,632 billion and 2020 will decrease by VND 14,110 billion. These calculations are based on the crude oil price scenario in 2017 at USD 45/barrel.
Not only is the budget revenue decreasing, the Vietnam National Oil and Gas Group (PVN) is also suffering heavy losses because it has to be in charge of purchasing the factory's products. If the oil price remains at 45 USD/barrel, PVN will have to compensate for a loss of about 3,500 billion VND per year. This compensation will increase to 4,000 billion VND/year with an oil price of 50 USD/barrel and 4,500 billion VND/year if the oil price is 70 USD/barrel.
Regarding profit, with 25.1% of capital, PVN will receive 1,600 billion VND/year if oil price is 45 USD/barrel. If oil price is at 50 USD/barrel, profit will be only 641 million USD/10 years, equivalent to 1,400 billion VND/year.
In addition, the total support from PVN for investment in construction items inside the factory has also reached 3,833 billion VND.
Thus, when Nghi Son oil refinery comes into operation, PVN must compensate for a loss of about 1,800 - 2,500 billion VND, plus the investment of nearly 4,000 billion VND mentioned above.
| Nghi Son Oil Refinery has a total investment capital of up to 9 billion USD. This is a joint venture of 4 members: PVN accounts for 25.1%; Kuwait Petrolum Company accounts for 35.1%; Idemitsu Kosan Company (Japan) accounts for 35.1%; Mitsui Chemicals Company (Japan) accounts for 4.7%. This project also enjoys many incentives such as corporate income tax applied at a rate of 10% for 70 years of the project, tax exemption for 4 years from the first year of taxable income and 50% reduction in corporate income tax payable for the next 9 years. |
According to Kinhtedothi
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