Equinor quits Vietnam per global trend, may return later: EuroCham

Norwegian energy major Equinor’s recent decision to not proceed with offshore wind business development activities in Vietnam is in line with challenges in the global market, says a representative of EuroCham Vietnam.

Minh Nguyen, vice chair of EuroCham Vietnam, said the global offshore wind power sector is facing many challenges, including rising costs and stable power prices. While the market is unfavorable, European businesses have to reconsider their global portfolios to suitably allocate their resources and pause some projects if necessary.

Minh was speaking in response to queries from The Investor at a press conference on Tuesday to preview the EuroCham’s Green Economy Forum & Exhibition (GEFE) 2024.

GEFE 2024, slated for October 21-23 in Ho Chi Minh City, is a premier event of the EuroCham to boost green growth in Vietnam and connect European businesses to the private and public sectors of Vietnam.

Minh also noted it is not fair to blame that the unfavorable legal framework in Vietnam discourages offshore wind power businesses, clarifying that Vietnam boasts high offshore wind power potential and many other firms are willing to enter the country.

He admitted that the Vietnamese market is still underdeveloped in terms of planning, power purchase agreements, and capital allocation. "However, even if Vietnam had made more progress, it would not necessarily have stopped Equinor from exiting," Minh stressed.

Equinor has many other activities in Vietnam, such as oil and gas, and will continue accompanying EuroCham, Minh stated.

On the same page, Alain Cany, co-chair of GEFE Organizing Committee and EuroCham Vietnam advisory board chairman, said Equinor sponsoring GEFE 2024 showed that Equinor is not completely out of Vietnam.

As Equinor’s shares shrank 30-40% recently, the firm had to make decisions. Equinor could have stopped supporting GEFE 2024, but it is “still here” and it would not be a surprise if Equinor decides “to come back” to Vietnam, Cany added.

More companies are interested in coming to Vietnam and the GEFE 2024 would feature 60-70 firms, which have never been to Vietnam, to do business in the country, Cany emphasized.

In August, Magnus Frantzen Eidsvold, an Equinor spokesperson told Reuters that the company had decided to discontinue its business development in Vietnam and to close the Hanoi office.

Jacques Etienne Michel, country managing director of Equinor Vietnam, told The Investor that “The industry is facing significant headwinds, and we must make prioritizations to make sure we are competitive through the downturn.”

Equinor’s decision not to proceed with offshore wind business development activities in Vietnam is driven by its “early-stage project portfolio optimization,” he added.