Vietnam - News and Regulations

WELCOME TO VIETPOWER 2010

Power cuts in Vietnam continue to impact on businesses in the country. However, all that is about to change. With one of the youngest workforces in the world and one of the fastest-growing economies in Asia, Vietnam is set to attract a lot of attention over the next few years.

A lot of money, local and foreign, is going into improving capacity in Vietnam. BOTs (Build Operate Transfer contracts) are in the process of negotiation across the country, including the 1200MW Nghi Son 2 plant and the 750MW O Mon 2.

Electricity of Vietnam (EVN) have two big priorities right now. Firstly, Vietnam has eight nuclear power plants (read as 8000MW!) planned for operation by 2030, given the go-ahead by Prime Minister Nguyen Tan Dung. Helping them with construction is a Russian firm.

Secondly, Deputy Prime Minister Hoang Trung Hai extolled the virtues of a competitive electricity market for cost-saving – a pilot market is planned for 2011. EVN’s agenda should be improving their transmission network, he said, to support power companies.

Whether aiding EVN with construction or engineering talent or knowledge share, or being one of the international power companies to be selling power to the soon-improved transmission system, prospects for foreign investment in Vietnamese power are rich. Already 2010 has seen AES and Jaks Resources sign off a 1200MW coal thermal power plant each.

With this month seeing a first draft of the Ministry of Industry and Trade’s Power Development Master Plan VII, the dynamics of Vietnam’s power industry will change forever. IBC’s 2^nd Annual VietPower conference in Hanoi this September will assemble executives from the independent power producers who have successfully landed projects in Vietnam this year, along with high-ranking government officials and financial experts. Chaired by a Vietnamese-speaking lawyer who has dealt with the government for years, the conference will create a unique forum for discussion of Vietnam’s growth, its challenges, and its potential.

For more information on this conference or to register, go to www.vietpowerconference.com or contact ruohyi.tham@ibcasia.com.sg

INTERNATIONAL RELATIONS - US, Vietnam to deepen relationship despite human rights differences

The US and Vietnam pledged on Thursday to deepen their relationship despite their differences over human rights.

US Secretary of State Hillary Rodham Clinton arrived in Hanoi early Thursday to attend the Regional Forum of the Association of South-East Asian Nations (Asean) on Thursday and Friday.

After a meeting with Pham Gia Khiem, the Vietnamese deputy prime minister and minister of foreign affairs, she said the US was prepared to take the US-Vietnam relationship to the next level.

Clinton said the United States was seeking to promote economic growth in Vietnam through integration into the regional and global economy. Expanding trade links between the two countries would also create jobs in both, she said. The meeting with Khiem covered issues including trade, investment, health, education, good governance, human rights, and humanitarian and security issues, Clinton added. She said that the US was still concerned about Vietnam's human rights record. Vietnam was "on the path to being a great nation with an unlimited potential," Clinton said,"and that is among the reasons we express concern about arrests and convictions of people for peaceful dissent, attacks on religious groups and curbs on internet freedom." "We look to work in a spirit of cooperation and friendship to support efforts to pursue reforms and protect basic rights and freedoms in Vietnam." Khiem acknowledged their different views on human rights issues, but also vowed to deepen the relationship between the two former enemies. "I reaffirmed the commitment of Vietnam to strengthen our relationship with the US in the spirit of leaving the past behind," he said. Clinton's visit also marked the 15th anniversary of diplomatic relations between Vietnam and the United States.DPA

POWER - EVN pushed to expand competitive power generation market

Electricity of Viet Nam (EVN) has been told to prepare information technology infrastructure suitable for the introduction of a competitive power generation market in Viet Nam.

A recent seminar in Ha Noi discussed the design, piloting and assessment of new IT infrastructure, due to be completed early next year. The total cost for the IT infrastructure necessary for a competitive power market was estimated at $32 million, including a market interface system for generators.

The seminar was organised by EVN to look at the existing IT landscape and the overall information architecture in Viet Nam's power generation market.

EVN deputy director Nguyen Manh Hung said the corporation had already developed a basic IT infrastructure and, from 2004, in anticipation of the creation of an official power market, had begun a process of upgrades and improvements.

This included the implementation of the VietPool Interim Market System, which managed market transactions; the development of hardware and software infrastructure for metering data acquisition, processing and storage and the upgrading of metering systems at EVN.

However, the National Electricity Dispatching Centre still lacked technological tools and methods to meet the regulations of a competitive power market, and the ability to plan the optimum operation of the electricity system in the short, medium and long term.

Such tools and methods were more necessary with the increasing number of new electricity plants coming into operation, Hung said.

Currently, the electricity system operated mostly on experience or embedded knowledge, which prevented the dispatching centre from operating an optimum business strategy or accurately forecasting supply and demand, thus affecting electricity security.

The absence of a comprehensive IT infrastructure also prevented the dispatching centre from providing electricity delivery centres with the information required to prepare corresponding operational plans, he said.
While domestic electricity plants had a monthly trading volume with EVN as high as 4 trillion dong ($222.2 million), there was no monitoring system in place to determine whether they were actually operating efficiently.

The seminar discussed the key design criteria for the new infrastructure, database and information security considerations, the constraints, and recommendations from the consultant. Under the power market principles, all electricity plants with a capacity of more than 30MW have to join the competitive power generation market.

Hung expects the regulations on the competitive market to be completed by the end of this year.

According to the Electricity Law and the government regulations, the comparative generation power market will be piloted, assessed and completed in the 2006–14 period, the wholesale electricity buying market will be competitive in the 2015–22 period, and the electricity distribution market will have become competitive by 2022. The Vietnamese government in the past year has encouraged non-EVN investors to get involved in the electricity generation sector, providing financial incentives such as favourable loans, but very few investors have met the huge financial requirements. The power distribution sector is currently monopolised by EVN.

RESOURCES - BP to sell Viet Nam assets to fund cleanup

HCM CITY — British oil giant BP has said it plans to sell its upstream assets in Viet Nam to raise cash to pay for its oil spill off the US coast.

The assets include Lan Tay and Lan Do gas fields and facilities, Nam Con Son Gas Pipeline and Dinh Co Terminal and Phu My Power Plant No 3.

BP Viet Nam declined to comment about the total value of these assets but Reuters reported they were worth an estimated US$1 billion.

The company said it had informed the Government about its intention to divest its assets in Viet Nam and was now awaiting the Government's approval.

"The plan does not affect BP's other businesses in the country such as the crude oil supply to Dung Quat Refinery and the lubricants business."

A spokeswoman for BP Viet Nam also declined to comment about suitors for these assets, saying: "It's too early to speak about the buyers."

Dow Jones Newswire reported there had been no talks between BP and the Viet Nam Oil and Gas Group on the sale of BP's assets. PetroVietnam, as the latter is known, has an equal share in BP's assets in Viet Nam.

It quoted a senior PetroVietnam official as saying there should be discussions and an agreement between BP and PetroVietnam before the sale takes place.

BP entered Viet Nam in 1989 and in the 1990s discovered four major gas fields 320km off the HCM City coast.

The $1.3 billion Nam Con Son Gas Project is a complex operation involving the development of the Lan Tay and Lan Do fields, laying of a 400km pipeline and construction of the 720MW Phu My Thermal Power Plant No 3 in the southern Ba Ria-Vung Tau Province.

Production started in November 2002 and BP now supplies 4 billion cubic metres of gas annually to generate around 24 per cent of Viet Nam's electricity. — VNS/wire services

ENERGY - ASEAN urged to focus on energy, climate change

DA LAT— ASEAN should prioritise finding effective ways to realise energy security and deal with climate change challenges, Prime Minister Nguyen Tan Dung said yesterday.

Opening the 28th ASEAN Ministers on Energy Meeting (AMEM) in Da Lat City, Dung emphasized that this was a pivotal year for the regional bloc as it was being considered a growth engine in the aftermath of the global crisis.

As signs of initial recovery had been seen in the regional and global economies, the situation presented both opportunities and challenges for ASEAN, he said.

"We should strive harder so that ASEAN energy development co-operation initiatives and programmes can be realised," the PM said.

He said the meeting should focus on increasing co-operation to ensure energy security for ASEAN in the context of rising consumption to meet the demands of recovery and development, and to cope with climate change impacts.

Dung also called for wide-ranging co-operation in researching and developing energy sources and reducing greenhouse gas emissions.

The PM suggested that ASEAN step up research efforts and expedites projects like the regional power grid and the trans-ASEAN gas pipeline. Member nations should also implement petroleum security agreements to ensure mutual support for electricity, oil and gas among members, especially in emergencies, he said.

"The region should promote co-operation in trade and investment in the fields of clean coal technology transfer and application among member nations and with partners to meet the growing demand for coal," he added.

Dung also called for greater co-operation in the use of renewable energy sources so that they account for at least 15 per cent of total energy consumption by 2015.

"We need stronger commitment to providing financial support, promoting technology transfer and coming up with new, more effective mechanisms for building projects under the Clean Development Mechanism (CDM)," he said.

Kyoto Protocol

The CDM allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to implement emission-reduction projects in developing countries in order to earn saleable certified emission reduction (CER) credits, each equivalent to 1 tonne of CO2, which can be counted towards meeting Kyoto targets.

Dung also urged co-operation in energy planning and policy-making, transportation and distribution of oil and gas, as well as environmental protection.

"The possibility of co-operation in using nuclear energy for peaceful purposes as a source of alternative low-carbon and sustainable energy should be considered," he stressed.

Dung said the plans being developed within and among ASEAN nations as well as between ASEAN and its partner countries and the international community aimed to develop low-carbon economies.

"Dialogue and co-operation between businesses and governments to ensure realisation of the ASEAN Action Plan of Energy Co-operation (AAPEC)'s objectives are crucially important," he said.

Viet Nam took over as chair of the 28th AMEM for a year, replacing Myanmar.

"This is a very important period for implementing AAPEC, which was approved last year in Myanmar," said Vu Huy Hoang, Minister of Industryand Trade, as he opened a working session at the meeting.

The lack of necessary sources was clearly creating difficulties in implementing the AAPEC, and ASEAN should raise its relationship with the international community to a new level.

Earlier, ASEAN energy officials held talks about energy co-operation for the first time with Russia and the US.

New proposals

The regional energy ministers looked at key achievements and studied new proposals for implementing the 2010-15 AAPEC, focusing on coal and clean technology, energy efficiency and conservation; renewable energy, nuclear energy and regional energy policy and planning.

They also reviewed the activities of the 2010-11 programmes initiated by SOME + 3 (Meeting of Senior Energy Officials from ASEAN and China, Japan, South Korea); as well as the implementation of the EAS (East ASEAN Summit) energy cooperation programme.

Later yesterday, Dung met the Indian Oil and Gas Minister, Murli Deora, who said Indian businesses wanted to boost their investment in Viet Nam's energy and steel sectors.

Cambodia, Laos and Viet Nam reached an agreement on future energy co-operation during a forum on the sidelines of the 28th AMEM

The document, signed yesterday evening by Vietnamese minister Hoang; Cambodian Minister of Industry, Mines and Energy Suy Sem; and Lao Minister of Energy and Mines Soulivong Dalavong, demonstrated the countries' commitment to projects involving the three nations, the ministers said.

The agreement covered inter-connection 230kV and 500kV electricity projects, development support for environmentally friendly hydroelectric power projects on the Mekong River and promotion of future energy projects that would benefit the three countries individually or collectively.

A Memorandum of Understanding on co-operation in developing nuclear power sources was signed yesterday evening by the Ministry of Industry and Trade and its Japanese counterpart. — VNS

NUCLEAR - Vietnam's nuclear ambitions powered up with China deal

Vietnam's Atomic Energy Institute and China's Guangdong Nuclear Power Group on July 21 signed a memorandum of understanding (MoU) to cooperate in nuclear power.

Under the MoU, the Guangdong Nuclear Power Group will assist Vietnam to transfer the latest scientific and technological advances and also train technicians for the nuclear power industry.

At present, China has one of the fastest-growing nuclear power industries in the world. Over the past few years, dozens of nuclear power stations have been built and put into operation in China, meeting the country's demand for power for socio-economic development.

Vietnam is considering nuclear power as a way to address an increasing demand for electricity. In 2009, the Vietnam National Assembly passed a plan to build a 4,000 MW nuclear power plant in Ninh Thuan Province. The proposed plant will have two nuclear reactors called Ninh Thuan 1 and the Ninh Thuan 2 with two 1,000 MW turbines in each.

In May the government said it would set up a steering committee to get the project up and running by 2014 with a view to having the first turbine operational by 2020.

BIO – TECH - Dong Nai plans a biotech centre

Dong Nai Province has unveiled a project to build a centre for biotechnology applications with an aim to bolster high-tech development and attract $500 million investment in the next ten years.

The province will spend around one trillion dong in developing infrastructure for the centre covering 208 hectares in Cam My District in the first stage, from 2010 to 2015, said Pham Van Sang, director of the provincial Department of Science and Technology, Sang said.

The centre will be a multi-function complex for research and development, training, technology transfer, and production of bio-products for use in the areas of agriculture, medicine, pharmaceutics and environment.

The mission of the centre is to mobilise the research and educational resources in biotechnology to facilitate discovery and commercialisation of new technologies; Sang told reporters on Monday, a day before the province started work on a road linking different sections of the biotech centre.

He also noted that the province was going to complete the procedures for the second stage, targeting to develop the centre into a high-tech park specialising in biotechnology of the region, and later as a science city.

INSURANCE - Life insurance market revenue gains of 25pct in H1

The life insurance market in the first half of the year saw revenue gains of about 25 percent over the same period last year, according to preliminary statistics from the Vietnam Insurance Association. Among the biggest gainers was Dai-ichi Life Vietnam, which reported earnings of more than 120 billion dong ($6.3 million) from new premium policies in the first six months of the year, up 48 percent against the same period in 2009. Other insurance companies also reported strong growth in the first half of the year. ACE Life said new premium policies were up 40 percent, while Korea Life Vietnam said it saw premiums rise nearly 80 percent in the second quarter. AIA Vietnam also saw solid growth in premiums, as did Prudential Vietnam, which said its market share by premiums rose 27 percent in the first six months. It now has a market share (by premium revenue) of 40 percent. Jack Howell, Prudential Vietnam's CEO, said strong growth in the local insurance market was an indictment of Vietnam's development potential. Meanwhile, Phung Dac Loc, general secretary of the Vietnam Insurance Association, said there was still room for growth in the local insurance market. At the moment, just five percent of the Vietnamese population have life insurance. It is estimated that 30 percent of the country's population can afford to take out insurance policies. There are currently 11 life insurance companies in the country. Only Bao Viet is home-grown. Nguyen Quang Tung, general director of the Vietnam Investment and Development Bank's insurance company, said his firm planned to expand its life insurance business by forming joint ventures with foreign partners.VNNEWS

RESOURCES - Olympus says Bong Mieu mine Q2 output up 12pct

Canadian gold producer Olympus Pacific Minerals Inc (OYM.TO: Quote) said second-quarter production at its Bong Mieu plant in central Vietnam is up about 12 percent sequentially, sending its shares up as much as 20 percent. Gold production at the mine rose to 8,200 ounces from 7,335 ounces in the first quarter, the company said. Olympus Pacific, which expects to further expand its reserve and resource estimates in East Malaysia and Vietnam, said it has a production pipeline capable of expansion to 300,000 ounces by 2014. Shares of the company were up 17 percent at 35 Canadian cents Thursday late morning on the Toronto Stock Exchange.reuters africa

Oliver Massmann