VIETNAM EXPECTED TO STAY DEPENDENT ON OIL IMPORTS

VIETNAM EXPECTED TO STAY DEPENDENT ON OIL IMPORTS

An expected delay in building Vietnam's first oil refinery following the withdrawal of French oil company Total will encourage Hanoi to seek more stable supplies of imported oil products, Vietnamese and Singapore trade sources said.

Vietnam's state-owned oil trading company Petrolimex would have to seek more long-term purchase contracts of oil products, especially diesel and kerosene, they said.They said they expected Vietnam's oil imports to increase along with higher demand, as the refinery was now not expected to be built by 2000.

"The government has to rethink the timing of when the refinery will come on stream," one Hanoi-based trade source said.

"They have to look for a new partner, and this is not so easy to do. The project will be delayed beyond the year 2000," the source said.

Vietnam initially expected imports to dip substantially when the refinery, which has a projected capacity of 130,000 barrels a day, came on stream.

The sources said Vietnam's oil products consumption would increase by 10 percent to 12 percent a year until 2000.

Oil-product imports in 1995 are projected at 4.8 million tons. Imports are estimated at 5.5 million tons in 1996 and are expected to grow to 7 million tons by 2000, they said.

"As demand grows, we will require a stable source of supply," a Petrolimex source said. "Total's withdrawal will mean that we will have more work to do" to import products.

Even before Total's pullout from the project, Petrolimex had started talks with Kuwait Petroleum Co. for a one-year purchase agreement of diesel and kerosene to ensure a stable supply.