* Dung Quat refinery sets domestic IPO by June 2017
* Russian, Thai, Kuwaiti energy firms express interest
* Strategic investor must guarantee long-term crude supply
* Refinery to boost capacity to 110 pct by year end
By Ho Binh Minh
HANOI, Sept 7 Vietnam aims to privatise its $3
billion Dung Quat oil refinery by June 2017, with energy firms
from Russia, Thailand and Kuwait expressing interest in taking a
strategic stake, the head of the refinery's operator said on
Vietnam is trying to accelerate the sale of stakes in state
firms, including an initial public offering (IPO) of the firm
that runs the country's sole refinery, which has been meeting
about 30 percent of local oil product demand since it began
operating in 2011.
"We have not decided how much will be sold at the IPO
because it will depend on the market situation," Tran Ngoc
Nguyen, Chief Executive Officer of state-owned Binh Son Refining
and Petrochemical Co, told Reuters.
However, a strategic investor could buy up to 49 percent in
Binh Son, he said.
Nguyen said the government has set a timetable for the
domestic IPO to be completed by June 30 next year.
Binh Son, an affiliate of state oil group PetroVietnam, has
registered capital of 35 trillion dong ($1.57 billion).
Nguyen said Rosneft, Russia's biggest oil
producer, Gazprom Neft (GPN), Thailand's top energy
company PTT and the Kuwait Petroleum Corp have
expressed interest in buying stakes in Dung Quat.
"We have not picked any strategic partner yet. We need a
partner who can guarantee a crude oil supply for 50 to 100
years," said Nguyen, who took up his post last October.
Gazprom Neft had earlier halted negotations to buy a 49
percent of stake in Binh Son.
The refinery, located in the central province of Quang Ngai,
far from Vietnam's offshore oil production hub, has a
processing capacitgy of 6.5 million tonnes of crude oil a year,
equal to 130,500 barrels per day.
Nguyen said the government had cut the tariff on Dung Quat's
petrol from Sept. 3 to 10 percent from 13 percent earlier, which
would be maintained to year-end, putting it on an equal footing
with fuel imported from South Korea.
"The new rate will help us compete better," he said, noting
that Vietnamese oil product distributors could avoid foreign
currency risk by using Dung Quat petrol and cut the size of
Dung Quat was targetting 2016 output of at least 6.8 million
tonnes of oil products, matching last year.
However, it would maximise its processing to 110 percent of
design capacity in the remaining months of 2016, Nguyen said,
potentially reducing Vietnam's oil product imports.
Vietnam imported around 10 million tonnes of oil products
in 2015, up 18.7 percent from a year earlier, according to
"The ratio of domestically produced products per imports
could be changed to 40/60 from 30/70 now," Nguyen said.
(Reporting by Ho Binh Minh; Editing by Richard Pullin)