Singaporean firm set to splash $5 billion on abandoned Vietnamese oil refinery

A Singaporean company is preparing to plow $5 billion into the Vung Ro oil refinery in Vietnams's southern province of Phu Yen, according to local authorities.

The previous investors, Technostar Management (U.K.) and Telloil (Russia), started the project in November 2007, said the Phu Yen Economic Zone Authority (EZA).

However, they recently withdrew due to financial difficulties, the Phu Yen EZA said.

Singapore-based Gia Phu International Pte. Ltd. is looking to replace the previous investors.

The company already has stakes in a number of large-scale projects across Vietnam, including a petroleum storage facility in Tien Giang Province.

“We have committed to demonstrate our financial ability in Vietnam, as well as our expertise and experience to implement this project,” said a company representative.

The company added that the biggest problem with Vietnam's oil refineries is the output, but said it had  carefully calculated the deal before deciding to invest.

Phu Yen EZA has allowed Gia Phu, in a joint venture with Vietnam's ABC International Trade Investment Consultant Company Ltd., to conduct research into the project.

The coast of Phu Yen Province, where the oil refinery will be constructed. Photo by VnExpres/Hai Minh

Local authorities have committed to assisting and providing clearance and investment incentives to the new investor, however, no contracts and agreements have been signed.

Local residents have been suffering for over 10 years since clearance work started, and many are living 3 kilometers away in temporary housing, waiting for compensation from the original investors.

“We want to to go, but they haven’t paid us yet and it’s been a long time,” said Nguyen Cao Ky.

Ky said he and his family will move as soon as their compensation has been paid.

A meeting between Gia Phu and Phu Yen authorities has been scheduled for mid-April to finalize the project.