Lukoil receives invitation to invest in Vietnam

Vietnamese authorities have offered Russia’s Lukoil the chance to set up an oil refinery in the country. The project is in keeping with the company’s development strategy, and could be profitable since Vietnam is experiencing a severe shortage in petroleum products. International oil companies like BP have already turned down two other projects in the country because of their inconvenient location and the lack of incentives from the state. In 1998, the Russian Zarubezhneft oil company became involved in it, but it withdrew from Vietross, the joint venture founded for the project, in 2002. Lukoil is likely to only be interested in the new project, an oil refinery in Ba Ria-Vung Tau Province. Authorities estimate the cost of the project at US$3.4 billion. It is located 200 kilometers to Hanoi, but 1,200 kms from the oil production fields. (December 18, 2006)