Prime Minister Nguyen Tan Dung has ordered state-owned oil and gas giant
PetroVietnam to complete its restructuring plan and submit it to the Ministry
of Industry and Trade for consideration.
In a recent meeting, the
government acknowledged the role that PetroVietnam has played as a major
economic group, contributing considerably to the state budget, developing the
domestic petroleum industry and even expanding operations to foreign countries.
However, it has continued to
maintain ineffective non-core investments and demonstrate shortcomings in
corporate governance, with a number of affiliated enterprises operating without
sufficient supervision.
The Prime Minister is therefore
urging the restructuring plan to focus on rearrangement of PetroVietnam
affiliates into five main business concentrations or sectors.
Any plan would also forbid
PetroVietnam from forming member councils in single-member limited liability
companies it controls, including PetroVietnam Exploration and Production,
PetroVietnam Oil, PetroVietnam Power, Binh Son Petrochemical Refinery, Dung
Quat Shipbuilding and Ca Mau Fertiliser.
The PetroVietnam reorganisation
plan would also need to build a roadmap for divestment from non-core lines
businesses, particular in securities, civil engineering, real estate
development, and tourism and leisure.
In a meeting in July,
PetroVietnam chairman Phung Dinh Thuc admitted that the group had invested over
VND5 trillion ($238 million) in non-core lines of business and had targeted to
gradually withdraw from these sectors by 2015.
However, he proposed to the Prime
Minister to retain holdings of 18-20 per cent in PetroVietnam Finance Co., and
PetroVietnam Insurance Corp, arguing that these were essential to core its
operations. However, the Government rejected the proposal for PetroVietnam
Finance and urged the group to devise a specific plan for divesting from the
corporation.
VIR/VNA
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