PVOil equitization: Competition to become strategic investor
Updated at Thursday, 11 Jan 2018, 17:32
The Hanoitimes - PetroVietnam Oil Corporation (PV Oil) is expected to sell 44.72% shares to strategic investors.
Idemitsu and Kuwait Petroleum Europe are two potential candidates to become strategic investor of PV Oil, stated in the report from the VietCapital Securities (VCSC). Currently, both companies own a large amount of shares at the Nghi Son Oil Refinery and operating in oil & gas industry.
Companies likely to be chosen as strategic investors for PVOil are divided into two groups: (1) taking part in oil refining and sale of petroleum products; and (2) sale of petroleum products.
PVOil owns a large network of gas stations across Vietnam.
Based on Vietnam’s commitment to the World Trade Organization (WTO), “crude oil and petroleum products” are one of the 7 conditional business lines for which Vietnam is not obliged to open the market for foreign investors. Meanwhile, under the government guarantee and undertakings (GGU) between the Vietnamese government and Nghi Son Refinery’s foreign investors, companies invested in Vietnam’s refineries are permitted to participate in petroleum sale nationwide.
At present, there are 3 foreign companies qualified to become strategic investor for PVOil, including Idemitsu Kosan (Japan), Kuwait Petroleum Europe (Kuwait) and Mitsui Chemicals (Japan). “Among these 3 companies, Mitsui Chemicals has not shown interest in PVOil, as they do not have experience in petroleum sale. Moreover, Mitsui Chemicals only hold 4.7% shares at Nghi Son Refinery” – VCSC reported.
On the contrary, both Idemitsu and Kuwait Petroleum have expressed interests in becoming strategic investors of PVOil, as PVOil’s network of gas stations across Vietnam may potentially become ideal distribution channels for Nghi Son Refinery’s products.
Idemitsu, the second largest Petroleum company in Japan, currently owns 35.1% shares of Nghi Son Refinery, with more than 100 years of experience, Idemitsu engages in the production and sale of petroleum products and basic oil-based chemicals while developing new energy resources, such as coal, geothermal energy and uranium.
Kuwait Petroleum Europe, which holds 35.1% shares of Nghi Son Refinery, is a branch of the Kuwait Petroleum Corporation. The company operates mainly in Europe and Asia, focusing on petroleum exploration, production, petrochemicals, refining, marketing and transportation. O
On September 2016, a joint venture between Kuwait Petroleum and Idemitsu named Idemitsu Q8 received the government license in import, wholesale and retail petroleum products in Vietnam’s market, an unprecedented decision for 100%-owned enterprise.
PVOil currently owned a network of 540 gas stations nationwide under the form of company owned company operated (COCO) and 3,000 gas stations of dealer owned dealer operated (DODO). As such, this is an obvious advantage for foreign investors expecting to join the Vietnam’s market.