Russia, Vietnam agree to advance new oil, gas projects, including LNG, oil refining
MOSCOW. May 12 (Interfax) - Russia and Vietnam have agreed to advance new oil and gas projects, including shipping and refining crude oil and liquefied natural gas (LNG) from Russia to Vietnam, according to a joint declaration "On the main areas of the Russian-Vietnamese relations of comprehensive strategic partnership at a new stage" published on the Kremlin's website.
"The Parties have agreed to strengthen energy and oil and gas industrial cooperation and to ensure energy security by raising the efficiency of existing energy and oil and gas projects and advancing new ones in accordance with the effective legislation and strategic interests of each Party, including shipping and refining crude oil and LNG from Russia to Vietnam," the declaration said.
The two countries' leaders also support creating favorable conditions for broader Russian business operations on Vietnam's continental shelf, and for Vietnamese in Russia.
Ahead of the talks held on May 10 between Russian President Vladimir Putin and the secretary-general of Vietnam's Communist Party Central Committee, To Lam, the Russian government approved a number of draft agreements to broaden bilateral cooperation on oil and gas production. In particular, the documents involve giving PetroVietnam a 35% stake in the Kharyaga Production Sharing Agreement (PSA) by 2027 and Zarubezhneft acquiring a 49% stake in a future PSA to develop the Block 01/17 field and Block 02/17 field in Vietnam. The documents also propose extending the two companies' joint venture Vietsovpetro's operations until the end of 2050.
For years Vietnam has been offering Russian companies to develop its Dung Quat refinery (controlled by PetroVietnam through the Binh Son Refining and Petrochemical Company) and said it could sell its 49% stake in it. Gazprom Neft was the closest to a deal, having signed in 2015 even framework documents on a possibility to join the project, but later abandoned the idea, having deemed investments in the refinery to be unprofitable without sufficient tax breaks. In the summer of 2022 Zarubezhneft and Gazprom Neft representatives visited the Dung Quat refinery to study cooperation possibilities.
The topic of Russian LNG shipments to Vietnam was raised during Russian President Vladimir Putin's visit to the country last summer. Russia could both take part in building LNG capacity in Vietnam, which has the resources, and ship LNG to Vietnam, Putin said then. Novatek and PetroVietnam signed a memorandum of understanding on cooperation in Vietnam.