Restructuring plan to end PetroVietnam’s non-core business
  • By Bich Diep | | September 13, 2012 02:28 PM

PetroVietnam will only focus on its five core business areas and withdraw from others, according to the group’s restructuring plan for the period of 2012-2015.

PetroVietnam has proposed retaining a 20% stake in PVFC 

The group has been asked to send the project to the Ministry of Industry and Trade for appraisal before submission to the Prime Minister this month.

PetroVietnam’s non-core business activities have proven inefficient, with many showing resulting in large losses. The firm has established too many affiliates, which has caused significant difficulties management, according to the Government’s report.

Under the restructuring plan the group will concentrate on its five major business areas of oil surveying, exploration and exploitation, oil refining and petrochemistry, the gas industry, electricity and oil services.

PetroVietnam will also withdraw from non-core investments, particularly in the securities market, real estate and the hospitality industry.

Wholly-owned subsidiaries which do not have established members' councils, will be run by a chairman/general director.

PetroVietnam bids to keep stake in PVFC and PVI

Although the Prime Minister has requested that PetroVietnam end its operation of Petrovietnam Finance Joint Stock Corporation (PVFC), the chairman of PetroVietnam, Phung Dinh Thuc, said that the company has proposed retaining a 20% stake in PVFC, as well as an 18% stake in PetroVietnam Insurance Joint Stock Corporation (PVI).

PVFC is an investment body, while PVI provides insurance for oil exploration and exploitation. Thuc said that total withdrawal from these groups could cause difficulties for the company.

The Prime Minister has allowed PetroVietnam to hold capital in PVI not in excess of 35% of PVI’s total capital.

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