Press Release

Petrolimex, Russia’s Lukoil reach agreement

Moscow, Sept. 16, 2009 - The Vietnam National Petroleum Corporation (Petrolimex) and Russia’s Lukoil Open Joint Stock Company have reached a trade and economic cooperation agreement on petrol and related services.

Petrolimex’s General Director Bui Ngoc Bao and Lukoil’s First Vice President Vladimir Nekrasov officially signed a cooperation agreement in the presence of Vietnam’s Minister of Industry and Trade Vu Huy Hoang and the Vietnamese trade mission in Russia.

Petrolimex General Director Bui Ngoc Bao (on the right) and Lukoil’s First Vice President Vladimir Nekrasov (on the left) officially signed a cooperation agreement in the presence of Vietnam’s Minister of Industry and Trade Vu Huy Hoang (in the middle).

Under the newly-signed agreement, Petrolimex and Lukoil will cooperate in the following fields:

Firstly, Lukoil will supply between 500,000-600,000 tonnes of fuel oil to Petrolimex every year starting from 2010.

Secondly, Lukoil will lease the Van Phong bonded warehouse on a long term basis as soon as the first phase of Petrolimex’s project is scheduled to finish in 2011.

Thirdly, Lukoil agreed to ensure the supply of diesel fuel for the 100,000-DWT Aframax oil tanker commissioned by Petrolimex in late 2009. Diesel oil will be shipped from the Black Sea, the Middle East and other regions.

Fourthly, both parties will exchange information on other business interests and investment opportunities in Vietnam and other regional countries on the basis of mutual benefits.

The agreement will be valid for three years from the day it was signed but may be extended with the consent of both parties. After the signing ceremony, Petrolimex and Lukoil will negotiate detailed contracts to realize their cooperative ties in line with the agreement’s contents and itinerary.

On addressing the signing ceremony, Petrolimex General Director Bui Ngoc Bao said, “the cooperation agreement is a joint effort by Petrolimex and Lukoil and is their long-term cooperation goodwill, in line with both enterprises’ business strategies.

“Lukoil is keen to enter the Vietnamese fuel market as this would consolidate the company’s position in the Asia-Pacific region,” said Lukoil’s First Vice President Vladimir Nekrasov.

‘I am convinced that the mutually beneficial cooperation between Lukoil and Petrolimex will not only benefit both companies but also promote commercial and economic relations between Russia and Vietnam,’ said Minister of Industry and Trade Vu Huy Hoang.

Petrolimex’s profile:

Petrolimex is a state-owned enterprise. It is registered to operate in 12 business fields, with trading petrol is its core business. The other areas include transportation and petrochemical products such as lubricating oils, grease, bitumen and chemicals. It also produces gas for civil and industrial use and is involved in engineering and the design and construction of petroleum projects, insurance and several other commercial services.

In the area of trading petrol, Petrolimex focuses mainly on the domestic market. Together with 11 other petroleum import-export businesses, the corporation supplies many oil based products for production, consumption and national defence and security. 41 out of its 67 subsidiaries trade petrol and oil products in 62 out of the 63 cities and provinces nationwide.

As for retail petrol services, out of 10,000 petrol stations nationwide, more than 1,800 belong to Petrolimex. The firm now also reaches more isolated and remote areas.

Since it was set up in 1956, Petrolimex has played a key role in ensuring the petrol and oil supplies and always fulfills its social responsibilities.

In addition to the domestic market, Petrolimex develops business in other regional countries in the forms of switch trade and export. Petrolimex’s branch in Singapore is finalising its procedures to be transformed into a company in order to be appropriate for the development of this business activity./.