Competitive petroleum market? It’s still far away
100% foreign-owned filling stations and the sale of a stake in petroleum companies by the state have not been enough to create a competitive petroleum market.
The Binh Duong Province’s People’s Committee has released a notice inviting strategic investors to buy a stake of Thanh Le Trade Import/Export Corporation (Thalexim).
Investors can buy up to 107.768 million shares, or 45.5% of Thalexim’s charter capital after equitization.
At the first auction of the sale campaign which took place on the last day of October, 11.83 million shares, or 5% of charter capital, were on sale. Forty four investors bought the shares at the average price of VND14,823 per share.
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After selling a stake to strategic investors, members of the public and workers, the State’s ownership ratio in Thalexim will reduce to 49% before it falls to 36% by the end of 2018.
PV Oil is taking similar steps. In the latest news, its IPO will take place at the end of the year when 210 million shares, or 20% of charter capital, will be put on sale, double the initially planned amount.
PV Oil is also carrying out negotiations to sell a 44.7% stake to foreign strategic investors. The state’s ownership ratio in PV Oil is expected to reduce to 35.1% after the plan is implemented.
Petimex in late August once intended to have an IPO, slated for early October. However, the plan has been delayed due to problems in asset valuation.
Meanwhile, Petrolimex had an IPO in 2011, and began listing shares on HOSE in April 2017 and completed the sale of an 8% stake to JX Nippon Oil & Energy from Japan. In Petrolimex, foreign investors are allowed to hold up to a 20% stake.
According to a general director of a petroleum company in the south, Comeco has foreign shareholders for the last 10 years.
Nevertheless, the appearance of non-state and foreign shareholders in domestic petroleum companies doesn’t mean Vietnam now has a competitive petroleum distribution market.
Ngo Tri Long, a renowned economist, said the common characteristic of all the deals is that the state will still hold a controlling stake in the enterprises after the divestment.
He went on to say that Vietnam, when joining WTO, and signing 11 bilateral & multilateral FTAs and another future four FTAs, did not commit to open the petroleum market.
This means that foreign enterprises won’t have the right to trade, distribute and import/export petroleum products in Vietnam.
Long agrees with the policy on not opening the domestic petroleum market, but warns that Vietnam won’t have a competitive market as long as one enterprise (Petrolimex) holds 50% of the market share.
