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 go into 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 factory will start operating from 2017.
Specifically, according to the State Budget Department, in 2017 when the factory came into operation, the total budget revenue is expected to decrease by 1,377 billion VND, the following years the decrease will be even stronger, 2018 will decrease by 10,929 billion VND, 2019 will decrease by 10,632 billion VND and 2020 will decrease by 14,110 billion VND. These calculations are based on the crude oil price scenario in 2017 at 45 USD/barrel.
Not only the budget revenue decreased, the Vietnam National Oil and Gas Group (PVN) also suffered heavy losses because it had to be in charge of purchasing the factory's products. If the oil price remained at 45 USD/barrel, PVN would have to compensate for a loss of about 3,500 billion VND each year. This compensation amount would 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 was 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 Refinery has a total investment capital of up to 9 billion USD. This is a joint venture with 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 of corporate income tax payable for the next 9 years. |
According to Kinhtedothi
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