Largest oil refinery on verge of shutdown due to financial difficulties

NSRP announced on January 19 it has decided to cancel the import of crude oil from two oil tankers in January 2022, and cut its production to 80% of its design capacity.

In a document to the leadership of Thanh Hoa province where the plant is located, NSRP said the plant could stop operations on February 13, 2022 unless the financial situation improves.

It said PetroVietnam (PVN) that accounts for 25.1% of the joint venture project’s stake has yet to approve an early payment under a “Fuel Products Offtake Agreement” (FPOA) with the refinery, causing financial difficulties for Nghi Son.

However, in a statement released on January 26, PVN said the management board of NSRP must be responsible for its decision to cancel two shipments of crude oil that put the refinery at risk of shutdown, citing the plant’s charter.

PVN said it is trying to negotiate with foreign partners on NSRP restructuring in order to maintain safe and effective operation of the plant as well as to ensure the rights of PVN and the Vietnamese side.

NSRP is a joint venture project invested by Vietnamese, Japanese and Kuwaiti companies. Along with PVN, Japan’s Idemitsu Kosan Co has a 35.1% stake in the Nghi Son refinery, the same as Kuwait Petroleum, while Mitsui Chemicals Inc owns 4.7% of the firm.