Foreign firms eager to buy stakes in Vietnam’s state-owned energy firms

German, Japanese and Indian firms are looking to invest in Vietnam’s biggest state-owned energy firms, according to the authorities.

The government’s hunt for overseas investment has yielded interest from firms including Siemens AG, Idemitsu Kosan Co. and Indian Oil Corp., among others, Deputy Minister of Industry and Trade Hoang Quoc Vuong told Bloomberg on May 3.

“We’re in the process of finding foreign investors and intend to finalize the deals by the end of the year," Vuong said, adding that the timeline for the stake sales was set by Prime Minister Nguyen Xuan Phuc. Vuong confirmed that deals are being made between foreign investors and PetroVietnam Oil Corp, known as PV Oil, PetroVietnam Power Corp., known as PV Power and Binh Son Refining and Petrochemical Co.

Earlier this year, six foreign buyers expressed an interest in becoming strategic partners with PV Oil, including British-Dutch oil company Shell, South Korea’s SK Energy, and Idemitsu, a Japanese petroleum company.

Binh Son Refining and Petrochemical Co., which raised VND5.57 trillion ($245 million) from selling a 7.8 percent stake in Vietnam’s first oil refinery Dung Quat in January, is in talks with Indian Oil about a partnership. Early this year, overseas investors bought a 4.77 percent stake in the company at its IPO. 

Vietnam, which needs billions of dollars in infrastructure investment, is accelerating stake sales in state-owned companies to boost revenue and ease a strained budget, while seeking to meet its economic growth target of 6.7 percent this year. Stakes in 245 state companies are up for sale this year, Deputy Prime Minister Vuong Dinh Hue said in a Bloomberg TV interview in January.