Idemitsu Kosan targets profit from Vietnam’s Nghi Son Refinery in FY 2025

Japan’s Idemitsu Kosan, which holds a 35.1% stake in Vietnam’s Nghi Son oil refinery, expects to achieve “positive net profits” from the petroleum facility in fiscal year 2025 (FY 2025).

The Japanese giant made the statement in its FY 2023 performance review, ending March 2024. Idemitsu Kosan stressed that while operating income excluding inventory impact of Nghi Son refinery increased in FY 2023, the refinery reported net losses due to an increase in financial expenses.

Nevertheless, the refinery achieved stable capacity utilization in FY 2023 at over 100%, thanks to initiatives aimed at enhancing productivity achieved during regular maintenance. For FY 2024, Idemitsu Kosan plans a 15-20% increase in capacity utilization, partly because of the regular maintenance conducted in FY 2023.

Nghi Son refinery, currently the only overseas refinery operated by Idemitsu Kosan, reached a production volume of 14.1 kilo barrels of oil equivalent per day (KBOED) in FE 2023, down 5.8% year-on-year. For FY 2024, Idemitsu Kosan anticipated the figure will drop 10% year-on-year to 12.4 KBOED.

For FY 2023, Idemitsu Kosan’s operating and equity income, excluding inventory impact, reached JPY310.6 billion ($1.98 billion), up JPY57.9 billion or 22.9% year-on-year. Regarding the hike, oil exploration & production (E&P) in Vietnam contributed a negative JPY10.3 billion.

Similarly, for FY 2024, Idemitsu Kosan said the figure from Vietnam’s oil E&P activities could reach negative JPY3.1 billion ($19.8 million).

Nghi Son refinery is a $9 billion complex jointly owned by state-run Petrovietnam with a 25.1% stake, Kuwait Petroleum Europe B.V. (KPE) with 35.1%, Japan’s Mitsui Chemical with 4.7%, and Japan's Idemitsu Kosan Co. with 35.1%.