JBIC asked to help restructuring of loss-making oil refinery in Vietnam

Vietnamese Prime Minister Pham Minh Chinh has asked the Japan Bank for International Cooperation (JBIC) to get involved in the restructuring of loss-making Nghi Son Refinery and Petrochemicals LLC (NSRP), the second oil refinery in the country.

At a meeting with JBIC’s chairman of the board of directors Maeda Tadashi in Tokyo on Monday, PM Chinh asked the bank to lower interest rates on existing loans and provide softer loans to help the refinery ease financial burden, in the spirit of “harmonious interest, shared risk”.

In response, Maeda said JBIC and he himself were interested in restructuring NSRP. He committed to further support and cooperate with Vietnam in the task.

He said JBIC will make more efforts to motivate relevant parties, including NEXI Nippon Export and Investment Insurance, in negotiations to restructure and resolve issues relating to the Nghi Son project, with the aim of figuring out the optimal option for the Vietnamese side.

Keeping NSRP afloat was a priority for the Vietnamese PM during his working trip to Japan on December 15-18.

During their official talks on Saturday, PM Chinh and his Japanese counterpart Fumio Kishida agreed to establish a joint coordination group between the two governments to push ahead with a number of economic projects, including NSRP.

At a meeting the same day with executives of Idemitsu, a major shareholder in NSRP, in Tokyo, Chinh suggested Idemitsu and its partners improve governance, develop efficient operational processes, and apply modern technology to reduce input costs, cutting losses at the refinery as soon as possible.

The Nghi Son oil refinery in the central province of Thanh Hoa, operated by NSRP, meets about 40% of the country's gasoline needs.

At the meeting with JBIC chairman Maeda, the Vietnamese PM hailed the Japanese government’s Asian Net Zero Emission Community (AZEC) initiative, and urged Maeda to support the implementation of mechanisms such as the Just Energy Transition Partnership (JETP) and AZEC with Vietnam.

Maeda affirmed that Vietnam is the first partner that Japan has given support to under the AZEC initiative, noting key international partners strongly back the Japan-Vietnam cooperation.