Apr 6, 2012

Vietnam - PetroVietnam causes $874 mln state budget loss


The state-run Vietnam National Oil and Gas Group, or PetroVietnam (PVN), has made several wrongdoings in capital and asset management, as well as investing in non-core businesses, which cost the state budget a huge sum of VND18.2 trillion, or $873.6 million, the Vietnam State Inspectorate (VSI) told a press briefing yesterday.


The total capital of PVN at the end of 2010 was some VND466 trillion, and revenues it reaped in the 2006 – 2010 period topped nearly VND689.5 trillion, VSI said, citing figures from PVN’s audited financial report.
“With such a massive sum of capital and asset in hands, PVN has made a lot of mistaken investments and capital allocations,” said a VSI representative, while petitioning that VND18.2 trillion be returned to the state budget.

PVN has defied the laws to earmark more than VND15.6 trillion from the profits earned from selling oil and gas for financial activities that are not listed in key oil and gas investment projects, VSI elaborated.

Moreover, PVN has allocated a total capital of VND622 billion to Soc Trang, Ha Tinh, Quang Binh, and Hau Giang provinces for these localities to complete site clearance tasks, without directive from the Prime Minister.

It was also found to have deducted VND352 billion from the fund for oil and gas investment and development and given the amount to Ca Mau City to build a road connecting the city’s downtown and the Ca Mau Gas – Power – Fertilizer Industrial Park.

PVN has also invested nearly VND12 billion from the fund for scientific research and training to establish the Dat Mui high school in Ca Mau, an investment VSI said was against state regulations.

“PVN has also yet to fully retrieve the VND1.99 trillion earned from its equitization, and the interest worth VND185 billion,” VSI informed.

Unprofitable investments

By the end of 2010, PVN had sunk more nearly VND114.6 trillion into investments for its subsidiaries and non-core sectors, with VND11.4 trillion earmarked for the power sector, which has yet to produce any profits since all of the projects are under construction.

PVN allocated VND1.26 trillion for 37 subsidiaries in 2009, and VND2.37 trillion for 42 others in 2010, all of which have been operating without a gain, VSI pointed out.

The oil and gas giant has also bought a seismic vessel that has not renewed its registration for 10 years, without reporting the purchase to the Prime Minister.

Tuoi Tre



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