PetroVietnam taking over Dungquat Shipyard: two huge vessels to be launched in 2011

Tuesday, 07 September 2010 13:34
Vietnam Shipbuilding Industry Corporation (Vinashin) has recently transferred the  Dungquat Shipbuilding Industry Company with all its properties and some other projects to Vietnam Oil and Gas Group (PetroVietnam) as part of a restructuring plan ordered by the government when Vinashin is found to be stuck on some financial troubles. This event helps disperse the gloomy clouds hanging over the progress two long-awaited oil tankers being built at Dungquat shipyard.

Construction of the first crude oil vessel named “Dung Quat 1” with a capacity of 104,000 DWT started in 2006. It was scheduled to see completion in April 2008 but this has not happened. The ship body is now basically completed, but three important parts of the ship including the main unit, the boiler and the main capacitor have not been assembled. One year later (in 2007), Dungquat Shipyard commenced work to build another huge oil vessel of 105,000 DWT under a contract with PVTrans; the building progress of this ship is no better than of the first one. Vinashin’s financial difficulties arising during the recent global financial crisis prevent it from paying to equipment suppliers and vendors and this blocked all the progress.
When the transfer happens, the lack of capital facing Dungquat shipyard is hoped to be solved and the two oil vessels are expected to complete soon thanks to the strong financial potential of PetroVietnam. In compare with some other projects which PetroVietnam is now implementing, the amount to finance the projects taken over from Vinashin is considered not too big for PetroVietnam. This oil and gas Group plans to secure the necessary capital by its own capital, issuing bonds as well applying for preferential loans offered by the government. Completing the two ships is considered priority task that the newly-transferred Dungquat Shipbuilding Company must finish quickly. The target is now set: first ship (104,000 DWT)  to be launched in early 2011 and handed over to client in April 2011, the second ship (105,000 DWT) to be launched in August 2011 and handed over 4 months later.

PVN is pouring cash and labor to get this 104,000 DWT oil vessel launched and sail
on the ocean next year. Photo: Tri Tin

PetroVietnam leaders have been urgently restructured the transferred company and its human resources (around 2,200 staffs and workers) with an aim to stabilize the workforce and the company’s operations by the end of this year. Several subsidiaries of Dungquat Shipbuilding Industry Company have been transferred to Petro Vietnam’s son companies operating in Quang Ngai such as PTSC, PV Security, PMC … In the first move, PetroVietnam will supply VND 369 billion (~ USD 19 million) to the Dungquat shipyard to maintain production and business operations and pay remuneration to its employees.

Engineers and workers at Dungquat shipyard.
Photo: Tri Tin
The said transfer is part of an overall restructuring scheme in which Vinashin is ordered to transfer some delayed projects to PetroVietnam and Vinalines. The entities to be transferred from Vinashin to PetroVietnam include: Lai Vu Shipbuilding Industrial Zone (Hai Duong province), Nghi Son Shipbuilding Industrial Park (Thanh Hoa province), specialized shipyard and ship equipment manufacturing plant in Nhon Trach (Dong Nai province), Soai Rap shipyard (Tien Giang province)… Considering all the possibilities and believing in its plan and efforts, PetroVietnam representative said to some national newspapers that the projects which PetroVietnam takes over from Vinashin can make profits within 1-2 years and the invested capital will be returned then. Most of all, all the related parties are looking forward to the day when two huge ships are launched, sail on the ocean to bring crude oil to feed the Dungquat refinery.
By tvdanh