PetroVietnam to merge two of its subsidiaries

State-run Vietnam Oil and Gas Group (PetroVietnam) will merge two of its oil products subsidiaries–PV Oil and PETEC–as part of its restructuring plan to improve operational efficiency.
PetroVietnam proposed the merger of PETEC and PV Oil under a massive government drive to restructure more than 1,300 state-owned firms by 2015. The restructuring drive, which started in January 2012, was meant to reorient these companies to focus on their primary businesses and to divest their non-core assets.
In a letter to the Ministry of Industry and Trade on May 2, PetroVietnam said that it has signed agreements to transfer all of its shares in PETEC to its wholly owned subsidiary PV Oil.
PETEC, which is Vietnam’s third largest oil products importer, has a minimum oil products import quota of about 200,000 cubic meters for this year.
Pending the completion, PetroVietnam has requested the government to suspend PETEC’s oil products imports operations and transfer its import quotas to PV Oil. The government has yet to respond to PetroVietnam’s request.
PetroVietnam holds a 95.08% stake in PETEC. The remaining shares were sold to the public in an auction in 2010.
It’s not immediately clear if PETEC will continue to exist as an entity after the merger.
While the merger will boost PV Oil’s fuel market share, the merged entity will still lag behind Vietnam National Petroleum Group (Petrolimex), the country’s largest oil products company.
Petrolimex’s minimum import quota this year is 5.18 million cubic meters.