By Tien Minh, Hoang Bac – Translated by Kim Khanh
The port is designed to handle tankers and petroleum service ships and drilling rigs having capacity of up to 150,000 DTW.
In normal weather conditions, the port will have its pilotage areas spanning a circle with a radius of 1 nautical mile.
The Ministry of Transport has asked the investor of the project to ensure maritime safety and security as well as apply measures to prevent environmental pollution during the operations of the port, while collecting fees in line with regulations./.
The Ministry of Transport has issued a decision to open the Sao Vang-Dai Nguyet petroleum port offshore the southern province of Ba Ria-Vung Tau.
The port is designed to handle tankers and petroleum service ships as well as drilling rigs with a capacity of up to 150,000 DTW.
In normal weather conditions, the port will have its pilotage areas spanning a circle with a radius of one nautical mile.
The Ministry of Transport has asked the investor of the project to ensure maritime safety and security as well as apply measures to prevent environmental pollution during the operations of the port, while collecting fees in line with regulations. — VNS
The Ministry of Industry and Trade (MoIT) has proposed removing the rule in a decree that says foreign investors are allowed to hold no more than 35% of shares in petroleum trading businesses.
The rule is included in an amended draft Decree 83/2014. The Ministry said that it was necessary to do further research.
In its document recently submitted to the Government, MoIT further explained the regulations allow domestic petroleum trading firms involved in production activities to transfer their shares to foreign investors, but it cannot exceed 35%.
This is controversial content. The ministries of Public Security, Planning and Investment, and Finance believe that this is a new regulation, raising concerns about energy security, legality, and the actual benefits of opening up for foreign investment.
The amendment to the decree on petroleum trading has not been completed yet. Photo: L. Bang
According to MoIT, this regulation has recently been included in Decree 83, but in fact it has been implemented for many years for state-owned petroleum trading enterprises such as Petrolimex (with 20% of shares owned by foreign investors), PVOil (35%), BSR (49%), through equitization and mobilization of investment capital. This was also approved by the Prime Minister before implementation. These firms are still doing business and operating normally.
MoIT explained that the inclusion of this regulation in the amended draft Decree is to comply with the Government’s guidance issued in March 2016 on the issuance of shares to increase capital for strategic shareholders of Petrolimex.
In addition, the participation of foreign investors contributes significantly to improving governance, making financial statements more transparent, thereby improving efficiency and competitiveness, and helping increase the value of petroleum trading businesses through shares.
The Ministry said that foreign investors are very knowledgeable and abide by Vietnamese laws and regulations in petroleum trading. However, because of the absence of official and specific regulations on the shareholding ratio of foreign investors, domestic enterprises as well as state management agencies are very confused when negotiating with foreign investors on investment and capital increases, especially the lack of heterogeneity in the shareholding rate of this subject when these firms are listed on the stock exchange.
The Ministry said that when the Government Office consulted the Government members on the draft amended Decree, 24 of 25 members passed it. One did not agree with the content allowing petroleum traders to transfer no more than 35% of shares to foreign investors. Three members approved but had additional comments on some content of the amended draft decree.
For the needs of businesses?
According to MoIT, in fact, there are thousands of other companies involving in petroleum trading, including many listed joint stock companies which also need to attract foreign investment.
Foreign investors are also interested in the shares of those firms, but the lack of clear and specific regulations hinders them from investing in local petroleum trading firms. Therefore, MoIT believes that this regulation is consistent with the actual situation and the development needs of the petroleum industry.
“The rule on share transfer limitation at 35% helps solve the problem of capital, technology, and business management skill attraction while still restricting foreign investors’ intervention in production and business activities of local enterprises,” the MoIT said.
Therefore, it is necessary to consider the benefits of not opening the door for foreign investors to buy shares of local petroleum trading companies with the early opening of the door for foreign capital and technology.
“The proposal to open the petroleum market comes from the needs of domestic petroleum trading businesses, not from foreign enterprises,” the Ministry said. Most countries in the world and the region have opened their petroleum markets, such as China, Singapore, Thailand, and Japan.
The Ministry affirmed that petroleum enterprises, regardless of economic sector, when doing business in the Vietnamese market, must comply with the conditions and provisions of this Decree and other related legal documents. Therefore, businesses are controlled to ensure management of energy security, quality, fire safety and others.
Allowing share transfer in such cases is an indirect investment activity that does not allow foreign firms to directly exercise the right to distribute petroleum in Vietnam. The exercise of the right to distribute petroleum in Vietnam is only possible when a foreign company establishes its branch in Vietnam and directly conducts distribution activities.
The Ministry also added that if the Prime Minister thinks this content needs to be further researched and evaluated, MoIT will propose removing this content from the amended draft decree.
This decree has not been approved by the Government, so it will have to wait for the decision of the new Government.
Commenting on the draft decree, the Ministry of Finance proposed setting regulations to control the number of petroleum traders.
In response, MoIT said that the increase in the number of petroleum traders is consistent with actual conditions. Before 2015, there were 23 major traders nationwide, which has increased to about 40 at present. The Ministry emphasized that the increase is not high. China has nearly 500 and Singapore more than 500 petroleum traders.
MoIT promised to coordinate with the Ministry of Finance and relevant agencies to strengthen the post-inspection task to closely control the quality and number of petroleum distributors.
Meanwhile, global economic growth is also forecasted to be more optimistic, leading to an expectation about increasing demand for petrol products, having affected the global oil prices in the past time.
The global gasoline prices in the past 15 days were mixed, but the general trend was a slight decrease.
Domestically, the pandemic continues to be controlled well. The activities of production, business, and daily life of the people continue to gradually recover but still encounter many difficulties.
In recent adjustments, to support the production and business activities of enterprises and the daily life of people, and limit the increasing level in fuel prices, the ministries of Industry and Trade and Finance had used the Fuel Price Stabilization Fund at a fairly high level. From March 27 to April 12, the fund spending ranged from VND500 to VND1,900 per liter or kilogram for petroleum products.
From the beginning of the year to now, the Fuel Price Stabilization Fund has continuously been tapped with an appropriation from VND200 to VND2,000 per liter or kilogram on petroleum products.
In this adjustment, if not using the fund, the retail prices for petroleum products will surge by about VND123-VND1,755 per liter or kilogram.
To limit the increase in the retail fuel prices, contributing to stabilizing prices of goods in the market, supporting the life, production, and business activities of people and enterprises that remain difficult due to the impacts of the Covid-19 pandemic, the ministries decided not to set up the fuel price stabilization fund for all petroleum products and continue to spend the Fuel Price Stabilization Fund at high levels for all kinds of petroleum products.
This adjustment of gasoline prices continues to contribute to ensuring the implementation of the target to control inflation and stabilize the market from the beginning of this year, supporting people and businesses, and maintain the price difference between bio-fuel E5 RON92 and fossil gasoline RON95 at a reasonable level to encourage the use of biofuel to protect the environment following the policy of the Government.
Accordingly, from 4.30 p.m. on April 12, the retail prices of petrol and oil are adjusted as follows:
E5 RON92 gasoline is not higher than VND17,806 per liter, down VND45 per liter. If not using VND1,800 per liter from the fund, the price would jump VND1,755 per liter to VND19,606 per liter.
RON95 gasoline is not higher than VND18,970 per liter, down VND76 per liter. If not using VND950 per liter from the fund, the price would climb VND874 per liter to VND19,920 per liter.
Diesel oil 0.05S is not higher than VND14,141 per liter, down VND102 per liter. If not using VND250 per liter from the fund, the price would edge up VND148 per liter to VND14,391 per liter.
Kerosene is not higher than VND12,827 per liter, down VND177 per liter. If not using VND300 per liter from the fund, the price would go up VND123 per liter to VND13,127 per liter.
Fuel oil 180CST 3.5S is not higher than VND13,687 per kilogram, down VND70 per kilogram. If not using VND500 per kilogram from the fund, the price would rise VND430 per kilogram to VND14,187 per kilogram.
By Van Phuc – Translated by Gia Bao
The Ministry of Industry and Trade (MOIT) has proposed removing a tentative regulation in a draft decree that says foreign investors can hold up to 35 percent of shares of petroleum trading companies.
MOIT has submitted a statement to the Government about amending some articles of the decree 83/2014 on petroleum trading management. The document was submitted on March 29, just days before the new Government tenure began.
According to MOIT, when the Government Office collected opinions from Government members on the draft that amends and supplements Decree 83 on petroleum trading, 24 out of 25 members agreed with the draft regulations.
Only one member, who asked for an adjustment, disagreed with the plan to allow businesses trading petroleum products to transfer up to 35 percent of shares to foreign investors.
Three members agreed with the draft document, but also offered suggestions on several issues.
In the document, MOIT gave further explanations about the tentative plan to allow Vietnamese petroleum trading companies that have production activities to transfer shares to foreign investors.
This remains a controversial issue. The ministries of Public Security, Planning and Investment, and Finance say this raises concerns about energy security, legality, and the benefits of opening the market to foreign investors.
MOIT said the regulation was recently legalized, but, in fact, it has already been implemented. Petrolimex, for example, has sold 20 percent of its shares to a foreign investor, PVOil 35 percent, and BSR 49 percent through equitization. The sales were approved by the Prime Minister before they were implemented.
These enterprises have been operating as usual.
MOIT explained that adding the regulation to the draft decree aims to implement the Government decision in March 2016 on issuing shares to Petrolimex’s strategic shareholders to increase its capital.
The ministry said the presence of foreign investors in Vietnamese petroleum companies improves corporate governance and makes financial reports more transparent, thus improving the efficiency and competitiveness of enterprises. It also helps increase the value of enterprises through higher share value.
|The presence of foreign investors in Vietnamese petroleum companies improves corporate governance and makes financial reports more transparent, thus improving the efficiency and competitiveness of enterprises. It also helps increase the value of enterprises through higher share value.|
MOIT commented that foreign investors are very knowledgeable about Vietnamese laws and strictly observe the laws. However, since there is no official regulation on the exact ownership ratio that foreign investors can hold, Vietnamese enterprises and state management agencies are unclear when negotiating with foreign investors on business issues.
What will happen?
According to MOIT, there are thousands of other petroleum traders, including listed joint-stock companies operating in many business fields which also want to attract foreign investment.
Foreign investors are also interested in these companies, but they face difficulties when planning investment projects because the regulations are not clear enough. Therefore, MOIT believes that the regulation on the foreign-ownership ratio ceiling will suit the practices and development demand of the petroleum industry.
“The limitation on share transfer at 35 percent will help attract investment capital while restricting the intervention of foreign investors into production and business activities of Vietnamese enterprises,” MOIT stated.
The country needs to assess the benefits it can expect if it doesn’t open the market to foreign investors, and the benefits of opening the market, which can help attract capital and technologies.
MOIT affirmed that the proposal on opening the petroleum market was based on the demand of Vietnamese enterprises, not demand from foreign enterprises. It said that most countries in the world and the region have opened their markets, including China, Singapore, Thailand and Japan.
It said that petroleum companies, once they do business in Vietnam, must comply with the requirements and regulations stipulated in the decree and other relevant legal documents. Therefore, there is no need to worry about energy security.
In principle, this is a kind of indirect investment, as foreign investors are not allowed to directly distribute petroleum products in Vietnam. The distribution will be implemented only when foreign companies set up branches in Vietnam.
However, while trying to protect its view to allow foreign investment in petroleum companies, the ministry believes that it would be better to remove the tentative regulation on the foreign-ownership ratio from the draft Decree for now, if the Prime Minister thinks that the issue needs further consideration.
The draft decree has not been approved yet and will be considered by the new Government.
The Ministry of Finance (MOF) has proposed creating a regulation on controlling the number of petroleum distribution businesses in order to prevent over-development.
In reply, MOIT said the increase in number of businesses is suited to real conditions. Prior to 2015, Vietnam had 23 petrol businesses, and the figure now is 40, which is believed not to be a big increase, if compared with 500 in China and over 500 in Singapore.
MOIT has promised to work with MOF and relevant agencies to strengthen post-licensing inspections in an effort to strictly control the quality and quantity of businesses in the petroleum market.