Vietnam's Binh Son Refining and Petrochemical JSC plans capital hike to expand Dung Quat oil refinery

Binh Son Refining and Petrochemical JSC (BSR), the operator of Vietnam’s first oil refinery Dung Quat, is finalizing the last steps to secure approval for its charter capital hike plan in support of the refinery's expansion, said chairman Bui Ngoc Duong.

Speaking at the company's 2025 AGM on Wednesday, Duong noted that the plan has been submitted to BSR’s major shareholder Petrovietnam, which has in turn sent a proposal to the Committee for Management of State Capital at Enterprises (CMSC). The Ministry of Finance chaired a meeting on April 15 to clarify related matters.

The ministry’s Agency for Enterprise Development is expected to issue a written request to Petrovietnam and BSR on Wednesday, seeking further clarification, with a deadline for response set before April 26, he stated.

Duong said that with most key issues already addressed, the finance ministry will submit the charter capital increase plan for approval based on BSR’s forthcoming official explanation.

The expansion of Dung Quat Refinery in the central province of Quang Ngai is currently in its final drafting stage and is expected to be submitted to authorities by May 2. This will serve as the foundation for final approval and the bidding process to select a general contractor.

On capital arrangements, Duong shared that BSR has hired a financial advisor and engaged with several banks, without encountering significant obstacles so far. If the charter capital hike is approved, financing for the expansion project will be viable.

Regarding business operations, BSR’s leadership anticipates a volatile and unpredictable global oil and petroleum market in 2025.

In this context, BSR has set a 2025 revenue target of VND114.65 trillion ($4.4 billion) and an after-tax profit of VND752 billion ($28.89 million), down 8.5% and up 27% year-on-year, respectively.

For Q1/2025, BSR estimates it met all production targets. However, revenue declined due to falling oil prices, and estimated profit stood at VND317 billion ($12.2 million), down significantly from the same period last year. This profit came equally from core operations and financial activities.

Duong added that while U.S. President Donald Trump’s tariff policy may not directly affect BSR’s operations, it will have indirect effects, especially on oil prices.

In early April, crude oil prices fell from $77 to $63 per barrel, before recovering to $67-68. These fluctuations were anticipated by BSR in late 2024, prompting the company to take risk management measures and notify its major shareholder for support solutions, including mobilizing domestic crude oil sources to reduce costs and boost sales to lower inventories.

Reflecting on 2024, Duong noted that the first half of the year, particularly Q1, saw strong performance. However, BSR suffered substantial losses in Q3 and Q4 due to declining global refining margins.

The company’s full-year profit was VND591 billion ($22.7 million), only 7% of the 2023 figure. Therefore, the Q1/2025 result signals an improvement.

He revealed that BSR had originally planned to pay a 3% cash dividend from 2024 after-tax profit. However, given the actual performance, the board has proposed withholding the dividend. Instead, the entire profit will be allocated to the welfare-bonus and development investment funds.