Posted on 05/10/2008 3:40:27 AM PDT by decimon
NGHI SON, Vietnam (AFP) - Energy-hungry Vietnam started building its second oil refinery on Saturday, a 6.2 billion dollar complex, in a bid to feed the nation's booming economy, the State Oil company announced.
Vietnam Oil and Gas Corporation (PetroVietnam), the oil monopoly in the communist nation, set up a joint-venture with its counterparts from Japan and Kuwait to build Nghi Son refinery in the north of the country.
Vietnamese Prime Minister Nguyen Tan Dung hailed the project at the ground-breaking ceremony, saying it was the country's most important and biggest power scheme, attracting capital investment of 6.2 billion dollars.
Petrovietnam said the refinery, with a targeted capacity of up to 10 million tonnes a year, is located in Thanh Hoa province, about 200 kilometres (125 miles) south of the capital Hanoi.
Petrovietnam will hold a 25.1 percent stake, Japan's Idemitsu Kosan Co (IKC) and Kuwait Petroleum International KPI) will each hold a 35.1 percent share, and Mitsui Chemicals Inc (MCI), also of Japan, will have the remaining 4.7 percent.
The Nghi Son refinery, to be operational by 2013, will turn Kuwaiti oil into petrol, liquefied petroleum gas, diesel, kerosene and jet fuel for Vietnam, which has offshore oil reserves but currently imports petroleum products.
Dung said last month the facility would create about 10,000 jobs and the state media said around 1,000 local families will be relocated from more than 500 hectares of Gia Tinh district.
Dung Quat, the country's first refinery costing around 2.5 billion dollars, is now being built after lengthy delays in central Vietnam and is expected to produce 6.5 million tonnes a year from 2009 -- equivalent to a third of the country's needs.
"By 2013, this project combined with Dung Quat refinery would ensure 65 percent of Vietnam oil and gas demand. It will contribute to ensure the nation's energy security," the Prime Minister said.
PetroVietnam is now preparing for its third refinery project in Long Son district of southern Ba Ria-Vung Tau province.
Vietnam's economy grew at 8.5 percent a year in 2007, and its energy needs for industry, households and transport are rising annually at about twice that rate.
Last year, Vietnam spent eight billion dollars to import 12.55 million tonnes of refined oil.
I am happy to read about ANY non-muzzie country either drilling for oil or building refineries.
As the citizen of a country that is TOO ABYSMALLY STUPID to do either, I’m glad to see that there are smarter folks on this globe than the dunderheads who run my own government.
Set our oil companies free!
I agree 100%.
Pretty clear that the politico's on both sides of the ever blurring aisle here in the USA have a vested interest in keeping oil prices high. All we hear is the same old lip service we've been hearing since 1974. Meanwhile, they continue to lease Cadillacs and keep the fuel needles on "F", all on the taxpayer's dime. Disgusting.
Hmmm...if they can do it, why cant we? This is what really scares me about McCain. When O’Reilly asked if he would drill in ANWAR, Gulf of Mexico, etc. he answered no. Why? “Because I am an environmentalist” McCain said. I hate to tell you this John, but taking the side of the enviroweenies will not get you elected.
isn’t that special..... the environmental whack jobs wouldn’t protest the installation of a big bad refinery in the pristine waters and grasslands of Vietnam.... but try to build something like that in this country..never happen.
I want drilling in ANWR! I want drilling off shore! I want new oil refineries built in the US, NOW!
vaudine
There needs to be a Vietnam ETF so people can start investing there.
It’s pretty amazing that the commies are able to build refineries but our so-called “free” country doesn’t seem to allow this type of activity. It’s pretty ironic, isn’t it?
Certainly better than the Vietnam ETA I once had.
There seems to have been a Vietnam ETF that apparently bombed. See the comments here.
I estimate this is a 260,000 bbl/day refinery. Not a bad start...
When O’Reilly asked if he would drill in ANWAR, Gulf of Mexico, etc. he answered no. Why? “Because I am an environmentalist” McCain said.Drilling ANWR won't hurt the environment.
If we are lucky, maybe they will build a new one in our country.....
According to the article, this will be their second refinery with the first now being built and of about 2/3 the capacity of the second refinery.
Since oil production is at an all-time high, and will only decrease from here on out, it does not make any economic sense to build more refineries here. Plus, they are very expensive to build, and take a while to construct. 10-15 years ago, there would have been a motivation to build more refineries, as oil production had the capability to increase, but with prices at $10-$20 a barrel, there was little economic incentive.
You might be right about the refinery issue, though frankly I’m skeptical. To me the more important issue is drilling. We don’t KNOW that we’re at “peak oil” just yet (and I seriously doubt that we are) and no one can KNOW that given our restrictions on drilling. Not just ANWR, but off-shore as well. And there are new discoveries now at deeper levels, under PA and WVA.
Look, I’m not saying we should have tax-payer financed drilling or refinery-building. All I’m saying is, remove the restrictions. Set the oil companies free. Let THEM decide whether or not to build a new refinery, not the government, not the democrats, not the rino’s not you, not me. (Unless you’re a stock holder, then you get a vote.)
Get the government out of the oil market so there’s room for more oil to ENTER the oil market.
We won't know Peak Oil occurred until after it actually happens. But I believe we are very close to it. Production has not really increased at all since 2005. Half of all oil producers have hit national Peak Oil and are now declining (for the U.S., Peak Oil occurred in 1970). Peak Oil for Saudi Arabia looks like it will occur by 2020, and obviously if they start declining any time soon, it will be bad for the entire world. China's demand is constantly increasing at a huge rate. Iran isn't doing so well, and will likely become a net oil importer in the next several years, which provides a logical reason for Iran to seize Iraq. Plus, some people think Iraq may end up having huge oil reserves.
We still have plenty of oil, but the question is, how much effort does it take to get to that oil? Daily production is at 85 million barrels of oil. That's $10.6 billion of oil produced (and sold) per day. That's also a lot of money flowing into Muslim hands on a constant basis.
Drilling ANWR won’t hurt the environment.
I know that and you know that, but McCain wont admit it. What sickens me even more is the RATS, confronted by the reality of constituants now saying “Drill in ANWAR”, do nothing but stonewall. Thier response is “Drilling in ANWAR wont yeild benefits for another 10 years.” Thats true, but if you had not continually shot down the legislation when it was introduced in the past, WE WOULDNT BE IN THIS MESS NOW!!! They are never held accountable for anything.
Oil at $120: Here’s Why
by Michael J. Economides
It would be more amusing had I not been personally involved. Three years ago I was a lone voice outrageously predicting $100 oil, debated on many occasions on national TV by those predicting $50 or even less. The tapes are still available.
Now, $100 seems conservative, others have jumped on that number by the carload and the OPEC president said last week that oil may climb to $200. This, by the way, is the same organization that four years ago was insisting that the “official” price was between $24 and $28, while we were paying $50. Clearly they hoodwinked us.
Oil is at $120 with no price reduction in sight because of two simple but unsavory facts: We in the United States and Europe have earned the right and the luxury to be ridiculous and oil producing countries, knowing this, have become militants, in what arguably can be called energy imperialism.
First a disclaimer, in itself silly that I have to make. This article is not paid by Big Oil. Second, I have a simple belief: energy and its abundance is perhaps the most important commodity in modern life, bar none, and any energy shortages will plunge the world in an economic tailspin we have never experienced before. If one does not believe this, no need to read further.
Of the world energy demand 87 percent comes from fossil fuels, oil, gas and coal. This fraction has not changed much since the 1970’s and the first “energy crisis” while energy demand has more than doubled. By almost everybody’s estimates by the year 2030, the total world demand will increase by 50 percent and oil, gas and coal will still provide 87 percent of the world’s energy.
The reason we use them is not because of some evil conspiracy headed by a dark knight by the name of Dick Cheney. We use them because they are the easiest, most flexible, most reliable and most efficient forms of energy. Biofuels as done today, cause a negative energy balance not even considering their impact on food prices. I have no aversion to wind or solar. I love the sun, I am Greek. But they are eminently unreliable and, even in their best case, without government subsidies, they make $200 to $2000 oil still attractive. It is that simple.
But here is how we are ridiculous and it would have been funny had we not run the danger of committing societal hara-kiri. We have let dazed environmentalism of the most outrageous variety to put on a tie and become mainstream, dominate the covers of national newsmagazines and, predictably as of late, earn Oscars, Emmys and Nobels.
There are no alternatives to fossil fuels for decades to come and the transition will be long and painful. We will continue to be a fossil-fuel dependent economy for the foreseeable future. To boot, the US imports now almost 70 percent of 21 million barrels per day of oil demand. Hugo Chavez, Vladimir Putin and Mahmoud Ahmedinejad have noticed.
So what do we do now? We are not allowed to drill in proven offshore or arctic resources and where we can drill “it takes more than an act of Congress”. At any given time, our oil and gas reserves are perhaps 40 percent less than they could have been in practically any other country because of environmental compliance. Ask almost any American which country provides more oil to the United States and the answer would be Saudi Arabia, Canada or Mexico. The correct answer is of course the United States, by far. In a margin business where one half of one percent of over or under supply can cause havoc on the oil price, drilling in the ANWR would make a heck of difference both really and symbolically.
It takes 800 permits to build a new refinery. Is it surprising that none has been built in over 30 years?
Big Oil is of course blamed by many, headed by national politicians. The truth is that US oil companies have very little impact on current oil prices and their influence is waning by energy militant countries that own the reserves. Instead of being protected they are maligned by politicians and a gullible public. Simple question: suppose that the energy industry is all nationalized and the ExxonMobil’s of the world are taken over by the government. Does anybody believe that gasoline prices would be lower? It may surprise almost all to realize that, having to buy oil from militant nations with little control over them, US Big Oil and the consumers are in much closer predicament than taxing and regulating government or elitist, touchy feely politicians and environmentalists.
And of course the biggest boogieman is climate change hysteria. Both Hillary Clinton and Barrack Obama have bought the man-made origin and have adopted the slogan of 80 percent reduction in carbon dioxide emissions (the main greenhouse gas produced from burning fossil fuels) by 2050. John McCain is not far behind. If they succeed they will bring a growing United States to the level of the lowest 5 percentile of the world’s poorest countries. Maybe that is the egalitarianism they seek: to make all of the world that poor.
Mr. Economides is editor-in-chief of the Energy Tribune
Maybe this will compel that puke Tom Hayden to slit his wrists.
Excellent article. Thanks.
The only thing this ignores is that existing refineries are increasing in size and have been during the 30 year spell. 1 new refinery is in the process of getting approval to be built in 2010, but the reason we have no new refineries is only in part due to environmentalists.
Oil is getting heavier and more sour every single year and it is a trend that will continue. The low hanging fruit of oil that could be pumped out of the ground easily and turned to gas easily is almost all gone, and what we have less is unconventional oil, whether Canadian tar sands or even more expensive to capture oil shale like the Bakken formation in North Dakota. This information points to a need for more heavy crude refining capacity.
We should be drilling in Anwar, but more importantly, we should be drilling on the east and west coast. Opposition to coastal drilling was easy after the Valdez, but it is much more difficult now because platforms cannot even be seen with binoculars and no mishaps have occurred in many years. The problem aside from NIMBY forces is that there are not enough drilling platforms. Platforms now rent for double what they rented for 2 years ago and some of the ones we had in the Gulf of Mexico are moving to the Middle East.
Refinery capacity is increasing in North America. The Saudis just partnered with Shell to do a 7 billion dollar retrofit in Texas and they are shipping their heavy oil over here to have it processed and sold. To have a refinery you need the aforementioned permits, but you also need access to two things, oil to process and rail to remove your coke. That does not seem like a tall order but if you look at where refineries are and where they could be, in almost every case it makes more sense to build out than to build new. Refinery after refinery is investing in expansion and upgrades.
Oil is still a remarkably cheap form of energy, but even if we had freedom to drill and drill and build and build it would not return to a $30 a barrel price point.
The number one reason oil is at $125? The “terror premium”, speculators with easy access to the futures market, supply disruptions via natural disasters, global demand increasing from China and India and the Middle East itself, have combined to push prices upward and all of this has only SLIGHTLY decreased demand in NA. What rational actor in this economy would seek to lower the price of a good that is selling briskly and bringing them record profit? No one.
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