Kuwait Petroleum International is considering waiving the interest on the loans of its partners in Vietnam’s Nghi Son refinery, the Arab Times is reporting. This could also see the interest rate on said loans possibly reduced to 0 percent.
The publication notes that at the end of December there was US$3 billion outstanding, US$1.8 billion of which was the remaining principal and the other US$1.2 billion interest.
The loan is set to mature in 2029 and the Vietnamese entity, Nghi Son Refinery and Petrochemical Limited Liability Company (NSRP) has estimated that between 2023 and maturity the loan would accrue about US$360 million each year or US$2.1 billion. On its current heading the company says it could not start paying the interest until 2034 and would not be able to pay the principal at all.
Background: The Nghi Son refinery’s financial challenges seem to stem from a tangled web of regulations and agreements. For details see: Vietnam oil refinery to receive US$338 million in compensation, but essentially, it’s cheaper to buy imported petrol from South Korea than from the Nghi Son refinery.Some food for thought: Nghi Son recorded revenue of US$6.4 billion in 2023 and paid US$820 million in taxes. Its third biggest shareholder, with 25.1 percent of the firm, is also the Vietnam Oil and Gas Group, which is a wholly owned state owned enterprise.