French-led consortium wins Vietnam oil contract

A consortium led by France's Technip-Coflexip has won a contract to build Vietnam's first oil refinery.

A consortium led by France's Technip-Coflexip has won a contract to build Vietnam's first oil refinery.

The consortium, which also includes Japan's JGC Corp and Spain's Technicas Reunidas, saw off a rival consortium led by South Korea's Samsung Engineering.

The French firm's Technip Malaysia subidiary will take the lead in the huge contract which includes all the design consultancy, procurement and building work for the $1.3 billion dollar refinery, said planning director Nr Tran Quoc Hung.

The much-delayed refinery project at Dung Quat on Vietnam's central coast is a joint venture between PetroVietnam and Russia's Zarubezhneft, which each have a $400 million dollar stake.

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Vietnam had turned to the Russians to help run the long-mooted refinery after lengthy talks with the United States and Asian partners broke down in 1997.

French oil giant Total pulled out as long ago as 1995, saying it made no economic sense to put the refinery in central Vietnam, far from the country's oilfields off the southern coast and the main consumer markets in Hanoi and Ho Chi Minh City.

The project has also been repeatedly delayed by funding shortfalls - a 2003 target date for completion has now been put back to 2005. The final $250 million was only found in December when Moscow announced a concessionary loan matching a similar amount from Hanoi.

AFP