Partnership With Petrovietnam 2012

Partnership with Petro ietnam 2012
This Publication is prepared in the consultation with PricewaterhouseCoopers (Vietnam) Ltd and is intended to provide a high level overview of PVNs investment projects. The Publication does not constitute an offer or invitation or a solicitation of any offer or invitation for the sale or purchase of any of the assets, business or shares described herein. The information in this Publication does not purport to be comprehensive. No representation or warranty, express or implied is or will be given by PVN, PwC or their respective directors, ofcers, employees or advisers or any other persons as to the accuracy and completeness of this Publication. No responsibility or liability is accepted for the accuracy or sufciency thereof, or for any errors, omissions or misstatement, negligent or otherwise relating thereto.
This Publication is all right reserved by Petrovietnam (PVN).
Table of Contents
4 6 7 11 13 15 16 17 17 18 21 22 25 30 32 34 36 40 42 45 46 47 48 49 50 51 52 56 57 58 59 60 61 62 63 64 65 69 71 74 75 77 78 79 80 85 Message from the President and CEO Chapter 1: Vietnam An Accessible Growth Market Vietnam One of the Most Dynamic Economies in Southeast Asia Promising Energy Market from both the Supply and the Demand Side An Attractive Destination for FDI in the Region Country Snapshot Chapter 2: PVN as the partner of choice Historical Milestones Major business activities and strategy PVN as the partner of choice Chapter 3: Partnership by Sector 1. Upstream Industry Song Hong Basin Phu Khanh Basin Onshore Mekong Delta (DBSCL) Nam Con Son Basin Phu Quoc Basin Malay Tho Chu - Phu Quoc Basin 2. Mid and Downstream Industry Nam Con Son No.2 Pipeline Ca Mau Gas Processing Plant Dung Quat Renery Long Son Renery Ca Mau Fertilizer Plant Petrovietnam Gas Corporation (PVGas) Petrovietnam Petrochemical & Textile Fiber Joint Stock Company (PVTex) 3. Power Industry Song Hau 1 Coal-red Power Plant Hoa Thang 1 Wind Power Project Thai Binh 2 Coal-red Power Plant Vung Ang 1 Coal-red Power Plant Quang Trach 1 Coal-red Power Plant Long Phu 1 Coal-Fired Power Plant DakDrinh Hydro Power Plant Hua Na Hydro Power Plant Nhon Trach 1 Thermal Power Plant 4. Services Phuoc An Port Project (PAP) Dung Quat Shipyard (DQS) Petrovietnam Construction Joint Stock Corporation (PVC) Petrovietnam Tower Petrovietnam Finance Corporation (PVFC) Petrovietnam Transportation Corporation (PVTrans) Petrovietnam Oil Stockpile Company Limited (PVOS) Appendix 1 - List of Selected Key Legal Documents Appendix 2 - Abbreviations
Message from the President and CEO

On behalf of Vietnam Oil and Gas Group (Petrovietnam), I would like to extend our warmest greetings and sincere gratitude to you. Vietnam is forecast to be the fastest growing economy in Southeast Asia over the next few years. The country is not only rich in oil and gas resources but also has a rapidly growing industrial sector and 87 million aspiring consumers which together drive demand for energy products. Due to its promising economic development potential and open investment regime the country has attracted a large number of foreign investors and will continue to be a preferred investment destination in the future. Petrovietnam is proud to play a pivotal role in the development of Vietnams economy. We have been the agship energy group of the country since our establishment in 1975. Over the past 3 decades, we have expanded from oil and gas exploration and production into rening and petrochemicals and related sectors such as power generation, support services, ship building, infrastructure and others. Our presence has expanded to cover 14 countries and will continue to explore new opportunities overseas. In 2011, Petrovietnam generated total revenues of USD 35 billion, accounting for a signicant part of Vietnams GDP and was a major contributor to the State Budget. Between 2006 and 2010, the group achieved an average annual revenue growth rate of 28% and is recognized as the economic locomotive of the country. We are currently operating 20 oil and gas elds in the Country, along with 5 abroad and we operate the rst oil renery in Vietnam. In the power sector, we are the second largest power producer in the Country and will continue to maintain this position. In the midstream sector, we operate 5 gas pipelines with a total capacity of 14 billion m3 per day. Successful collaboration with foreign partners has contributed an important part to our success. We are condent of continuing our highly successful growth path and invite you to join us in making protable investments in Vietnams fast growing economy. This project summary gives an overview of 29 investment opportunities in 4 areas namely Upstream, Mid and Downstream, Power and Services. We enclose summaries of these investment opportunities in the following sections. Further detailed information can be obtained via direct discussions with Petrovietnams executives. We look forward to cooperating with you in the near future.
Dr. Do Van Hau
Partnership with Petrovietnam 2012
Chapter 1: Vietnam - an Accessible Growth Market
Chapter 1: Vietnam An Accessible Growth Market
Vietnam - One of the Most Dynamic Economies in Southeast Asia

Vietnam is one of the fastest growing economies in Southeast Asia. The country is listed in Goldman Sachs Next Eleven (N-11) list as having a high potential of becoming one of the worlds largest economies in the 21st century and in JP Morgans Frontier Five frontier markets that are worth further investigation by global investors illustrating the general opinion that this is a country possessing huge potential.
Real GDP Growth (%), 2007 2016 16 Actual Forecast Thailand Indonesia 12 Malaysia Philippines 8 Vietnam Cambodia 4 Myanmar China 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f 2015f 2016f
The country has achieved a real annual GDP growth rate of approximately 6.6% during the period 2007 2011 and is forecast to achieve 6.9%1 on average in the next ve years (2012 2016). With regard to the economys productivity, the Nations nominal GDP per capita grew at a CAGR of 12.9%2 in 2001 2011 to reach approximately USD1,3923 in 2011, which meant that Vietnam had achieved the status of an average-income country.
(4)
Affected by the global economic crisis
Source: GSO, EIU, World Databank and PwCs calculation
Although the country still lags behind its peers in Southeast Asia in terms of GDP and GDP per capita, Vietnam is believed to have tremendous long-term growth potential. By 2016, Vietnams economic growth rate is forecast to exceed that of other Southeast Asian countries, making it a dynamic player in the region
Thailand Indonesia Malaysia
Real GDP Growth (%) GDP 2006 2011 2016f (2010) USD billion 5.1 1.2 5.1 318.9 5.5 6.5 6.3 706.5 5.8 5.1 5.7 237.8 3.6 5.4 7.7 NA NA 7.7 199.6 103.5 11.2 NA 5,824.0
GDP per capita (2010) USD 4,921 2,968 7,737 2,007 1,191 795 NA 4,437
Philippines 5.3
Vietnam 8.3 5.9 Cambodia 9.5 4.8* Myanmar 12.4 9.6* China 12.7 9.2 Note: (*) data in 2010
----------------------------------------------------------------------------------------------------(1) EIUs forecast Feb 2012, PwC calculation (2) PwC calculation (3) EIUs forecast Feb 2012
High but Curbed Inflation

Sector
Inflation in selected Asian countries, 2011 & 2016 Vietnam China Indonesia Singapore Phillippines Thailand Malaysia 2.2% 5.2% 4.7% 4.8% 3.6% 3.8% 3.4% 3.2%
Source: Vietnam GSO, EIU forecast
8.4% 18.6% 4.1% 5.6% 6.3% 5.3%
Industry & Construction Services Agriculture, Forestry & Fishery
% of Real GDP 2000 35% 41% 23%
% of Real GDP 2011 41% 37% 22%
CAGR 2000 2011 8.9% 7.2% 3.6%
Source: Vietnam GSO 2011
2016f 2011
As a result of the Nations booming economy, Vietnam witnessed high and uctuating ination rates over the years since the opening up of its economy. Nevertheless, the Country is expected to effectively control this indicator at a more levelled-off pace going forward following implementation of the Governments strategic plans to direct the economy towards more sustainable growth. In particular, ination is expected to ease as a result of the Governments various nancial and administrative measures. Excessive credit growth has been curbed by the Central Banks interest rate policy and caps on credit growth. Moreover, public expenditure was reduced. Various price-control measures were introduced, such as supporting certain manufacturing industries to ensure better demand-supply balance, reduced import tariffs on gasoline to lower petroleum price, etc. These measures have proven to be effective, as the growth rates of monthly price indices have dwindled after reaching a peak in August 2011.
Industrialisation has been achieved at a remarkable rate across certain sub-sectors, particularly manufacturing which grew at 10%4 on average in the last decade. This is the fastest-growing sub-sector in Vietnams economy and thus can be considered the Nations economic engine. To be on track against the industrialisation goal by 2020, under which industrys contribution to the overall economy overwhelms all other sectors, Vietnam will have to continue to focus on developing its industrial sector, providing various incentives to investors as well as opening up to private domestic and foreign investors. With an ever larger contribution to the countrys GDP, the role of the foreign and private sectors has become increasingly important to Vietnams economy over the last ten years.
GDP Structure by Ownership, 2000 - 2011

10.8% 13.6%
48.4%
49.9% FDI Non-state
40.8%
36.5%
State
2000
2011
Source: Vietnam GSO
Changing of the Economic Structure Towards an Industrial Economy by 2020 and Increasing Involvement from the Foreign and Private Sectors Vietnam has transformed itself into a dynamic marketbased economy in which industry and services have been playing increasingly important roles. With progressive measures to liberalise Vietnams market, the economy has seen a structural shift from one that was very agriculture focused to one that is increasingly industrial and services focussed. The industrial and construction sectors are now responsible for a much larger share of GDP and have been expanding at a higher rate than the overall economy, reecting the critical role of these sectors in boosting the Countrys overall performance.
----------------------------------------------------------------------------------------------------(4) Vietnam GSO, PwC calculation
Privatisation and Equitisation Within 10 years from 2000, the number of private enterprises grew 11.3% per annum, reaching 48,358 private companies in 2010. This boom was fostered by a new Enterprise Law with simplied business registration procedures. To make the countrys privatisation process more comprehensive, the Government has also sped up equitisation in state-owned enterprises. In particular, the Vietnamese government has an ambitious plan to extend the equitisation process to major stateowned conglomerates in sectors such as power and
telecommunications. By 2014, the Government aims to replace the current monopoly and subsidised power situation with a competitive power generation market. In seaport construction, the PPP form of investment is encouraged and is becoming increasingly popular. Doors are also widened for foreign players. Foreign investors now can acquire shares in domestic corporations, in some industries being able to take a majority stake if desired. Further liberalisation and growing foreign involvement is expected in the electricity sector.
Vietnam's major goods for exportation, 2005 - 2011 (USD billions) Textile, sewing products Crude oil Footwear Fishery products Electronic goods and parts Wood and wooden products Rice Rubber Coffee 1.4 1.6 1.4 0.8 3.0 2.7 4.2 3.9 3.6 3.2 2011 2005 4.8 7.2 7.4 6.6 6.1 14.2
An Export-Led Growth Economy

Exports made up 88.2% of Vietnams GDP in 2011 with the highest rate of change over more than the last 4 years since 2007 in comparison with other countries in Southeast Asia as well as against large exporters in Asia like China and India.
Level and Growth of Exports Change in exports as % of GDP (2007-2011) 8% India 4% Vietnam Thailand 0% Indonesia -4% China -Phillipines Singapore -12% 0% 50% 100% 150% 200% 250%
(Low occurence of) Irregular...
Coal
2.7 0.7 1.6 0.7
Source: Vietnam GSO, Vietnam Customs 2011
Improved Legal System

With the Governments continuous efforts to improve its institutional systems, Vietnams legal system has improved remarkably, resulting in a higher ranking for the country in rule of law indicators, and enabling it to catch up with its more developed peers in the region such as China and Thailand.
Rule of law rankings - Vietnam and comparison countries, 2010
Reliability of police services (Low) Business costs Rule of Law (WB) of crime and... Control of Corruption (WB) (Low impact of) Organized crime Judicial independence Efficiency of legal frame workin... Property rignts Singapore China Thailand Vietnam Cambodia
Malaysia
-8%
Ethical behavior of firms
Total exports as % of GDP, 2011

Source: Economic Intelligence Unit 2012
(Low occurence of) Diversion of...
Vietnams key export products are garments and textiles, crude oil and footwear. These are labourintensive industries. Although crude oil is the second largest exported product, export volumes of this natural resource have reduced since the country started paying more attention to the export of processed products and supplied domestically produced crude oil for use in its local reneries.
Source: WEF Global Executive Opinion Survey 2011-2012; Worldwide Governance Indicators 2010 - World Bank
Stable Political System

The Socialist Republic of Vietnam is led by the Communist Party of Vietnam (CPV) which has been the sole political party in Vietnam since the countrys independence in 1975. Since the 11th Party National Party Congress in January 2011, at which the CPV reafrmed its staying power as the ruling party, there has been no sign of any likely change in power. Such long-term political stability has been Vietnams trump card in attracting foreign investors since it has generated the image a safe and stable country.
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By virtue of such consistency as a one-party State, together with the clear mechanisms for leadership transition and the likelihood that policies will not change drastically in the medium term, Vietnam is well-known for its political stability. According to the 2010 Foreign Invested Enterprises Survey5, political stability ranks among the top three determinants encouraging FDI ows into Vietnam.
Malaysia and the Philippines. By 2020, nearly 70% of the population, or about 70 million people, will be of working age. Labour quality is in line with the region, with the same adult literacy rate (93%6) as China, Malaysia and Thailand. In addition, there have been an increasing number of Vietnamese students studying overseas with an estimated 25,0007 foreign-educated students graduating each year. This is a positive complement to the countrys skilled workforce. The labour quality has also improved as a result of the Governments attention to education related investment as well. According to the World Bank, Vietnams public spending on education is higher than that of most of its neighbouring countries in Southeast Asia (5.2% of GDP in 2009 in comparison with Malaysias less than 5%, Thailands 4%, and Indonesias 3.5%). This bodes well for the long term future of the country.
Prospects of a Better Administrative Environment

Though various measurements have been taken to improve the administrative environment, this remains an issue that has diluted foreign investors interest in Vietnams business environment. However, the Government is determined to change the situation through several major reform initiatives such as Project 30 (Vietnams Master Plan of Administrative Procedure Simplification in the field of state management for the period 2007 2010). The project has brought significant changes in Vietnams business environment such as in the customs area with the widespread introduction of e-customs and implementation of onestop shop customs procedures which have allowed businesses to cut costs. According to the Organization of Economic Cooperation and Development, Vietnams success in Project 30 will provide useful lessons for other emerging nations which are also in the process of administration reforms.
Average wage, 2010 (Minimum annual salary per worker, USD) Vietnam 1,002 Indonesia 1,027 China 1,500 Philippines 2,053 Thailand 2,293 Malaysia 4,735
A Large Pool of Well-Educated Workers at a Relatively Low Cost

Labor force (million people), 2005-2010 250 200 150 100 50 44 38 35 11 2006 45 39 36 11 2007 46 39 37 12 2008 47 40 38 12 2009 51 39 39 12 2010 112 114 116 119 118 Indonesia Vietnam Thailand Philippines Malaysia 1.2% 3.6% 0.5% 2.7% 1.6% Growth 0 6 10
Source: World Bank
Abundant labour supply is one of the Countrys main attractions for foreign investors as well as it being a solid base for sustainable economic growth. In the 2005 - 2010 period, the employed population grew at a CAGR of 2%. Vietnams workforce growth is comparable with other fast-developing Southeast Asian countries like Indonesia,
Owing to its maintenance of a relatively low average labour cost base, Vietnam has become increasingly competitive compared to its neighbouring countries in the region and to the worlds favourite labour markets, such as China. The countrys competitive labour costs, its high quality, hard working and abundant workforce have specically encouraged global producers and manufacturers (e.g. Canon, Intel, Samsung, Honda, etc.) to relocate their production hubs to Vietnam. In 2010, Intel the worlds largest chip maker opened its biggest chip factory in the world in Vietnam. Intel said it was attracted to Vietnam by its skilled, vibrant workforce, as well as the support and incentives Intel received from the Vietnam Government, the Saigon Hi-tech Park and suppliers. Other big names that have chosen Vietnam as a manufacturing base include Nokia, which is building a USD 300 million mobile phone plant, Danish-owned ScanCom International - one of the worlds leading exporters of wooden outdoor furniture, XP Power - the UK-listed electronic components manufacturer, etc.
----------------------------------------------------------------------------------------------------(5) USAID, VNCI. The survey was conducted with 1,155 Foreign-Invested Enterprises (FIEs) from 47 different countries throughout Vietnams 63 provinces (6) World Databank (7) British Council
11
Promising Energy Market from both the Supply and the Demand Side
Rich natural mineral resources, strong oil & gas demand and fast-growing refining capacity have helped vietnam stand out as an attractive upstream and downstream market for exporters, investors and manufacturers in the asia pacific region
Oil Demand and Supply Vietnam will have strong demand for oil for the foreseeable future in line with the Countrys economic growth. The Nations consumption rate (see chart) is expected to grow at a much higher rate than those of other benchmarked countries in the Asia Pacic region, including the fastestgrowing economy, China.
Oil consumption per capita, 2010-2015 16 14 Barrels/year 12 10 8 6 4 2 1.4% 4.6% 4.2% 2% 3.2% CAGR 10 15 2010 2015f (0.8) %
Asia-Pacific Oil Reserves and RPR, 2010 20 Billion barrels 15 17.5 10 5 3.6 19.9 11.8 32.6 22.2 11.3 30.0 35 30 25 20 9.9 15 10 5 0 Years
ei
lia
nd
si
di
si
in
un
ra
na
la
ne
ay
In
Br
ai
et
st
Ch
Th
Au
do
Vi
al
In
Oil reserve
RPR
Source: BPs World Energy Report 2011
Gas Demand and Supply

Gas consumption per capita, 2010 2015
a Th ai la nd
Ch in a
na
in
si
lia
es
th
er
As
ia
...
pp
et
al
Ph
Au
ili
Vi
st
1,600
4.6%
1.3%
ay
ra
Source: BMI Vietnam Oil and Gas Report Q4 2011
Cubic metres
1,200
CAGR 10 15
Vietnams oil reserves in 2010 were the fourth largest in the Asia Pacic region after China, India and Malaysia while its gas reserves ranked seventh. The countrys oil reserves accounted for 10% of the regions total and increased by an annual average rate of 8.5% from 2000 2010. Thanks to an oil reserves-to-production ratio (RPR) that is the regions highest, Vietnam holds fourth place in Asia Pacic, behind Australia, the Philippines and India, in BMIs Upstream Business Environment rating
800
3.4%
400 3.4% 8.1% 13.5%
es
nd
in
in
na
si
pp
Ch
et
ai
ay
Th
al
Ph
2010
2015f
Au
Vi
ili
st
ra
la
lia
12
Vietnams gas consumption per capita is only 8% of the level in more developed countries like Malaysia. Given the countrys high gas consumption growth rates, it is likely to become a notable potential market. The countrys gas reserves made up 4% of the regions total and increased by an annual average rate of 13.8% in 2000 2010. New gas sources discovered off the Southwwestern coast of Vietnam have encouraged construction of pipelines to transport gas onshore and have thus boosted gas production. The country has the prospect of achieving high gas output levels in the near term, with a signicant forecast growth of 22%8 between 2011 and 2015.
In view of the signicant growth in national gas consumption, Vietnam is expected to become a net importer of LNG in order to meet the increasing domestic demand from 2015.
Renery Demand and Supply Currently, Vietnams rening capacity covers approximately 30% of domestic petroleum demand. This gure is forecast to reach 60% by 2015 when Nghi Son Renery will enter into commercial operation. The six benchmarked countries account for nearly 50% of the regions rening capacity, with China being the biggest producer. Although Vietnam accounts for the smallest portion of the regions total output, the countrys growth in this industry is impressive. Vietnam has been on track in playing catch-up with the region with the aim of becoming self-reliant in rened products in the future.
Oil refining capacity, 2010 2015 12,000 '000 barrels/day 3.4% CAGR 10 15
Gas production in Vietnam, 2000 - 2011 400 10,000 8,000 6,000 200 4,000 100 2,000 2001 2006 2004 2009 2007 2010 2011 2005 2002 2000 2003 2008 Million m3
300 Million tons
10,000 8,000 6,000 4,000 2,000

-
11.9%
0%
31%
0%
0%
es
lia
Th ai la nd
si
na
in
ay
ra
pp
et
al
Ph
LPG
Dry Gas
Source: BMI Vietnam Power Report Q3 2011
2010
2015f
Hungry for electricity to support the countrys industrialisation process, Vietnam is an attractive destination for investments in power infrastructure projects
Electricity consumption per capita, 2010 2015 15 CAGR 10 15 MWh 10 5 3.8% m a a Th ai la nd Ch in na in ay al ia es si Au st r pp et al
(0.2)% 4.2%
8.5%
4.0%
5.8%
Vietnams current consumption remains low compared with developed countries, but the countrys per-capita power consumption growth rate is expected to hit an impressive 8.5% vs. Chinas 5.8% in the period 2010 2015. Rapid economic growth has created a huge demand for electricity and hence for new power plants. Electricity demand has consistently exceeded supply over recent years. To support Vietnams transition to a market economy, the Government has implemented a 3 stage scheme to develop a competitive power market. As part of this effort, a gradual adjustment to the tariff has been implemented with the aim for the tariff to be on full commercial basis.
ili
Vi
Ph
2010
2015f
----------------------------------------------------------------------------------------------------(8) BPs World Energy Report 2011, PwC calculation
Au
ili
Vi
st
Ch
in
13
An Attractive Destination for FDI in the Region

Vietnam is a key destination for FDI in the region as a result of the Countrys open economic policies and moves to ease regulatory restrictions on investments as part of its accession to the WTO in 2007 and in accordance with several bilateral agreements that are in place. For example, Enterprise Law issued in 2005 has provided a common legal framework for all enterprises of different sectors (i.e. FDI, domestic private and SOEs). The Law has created a more equal regulatory environment for both domestic and foreign entities with almost no discrimination. In some cases, especially at the provincial level, FDI enterprises receive even more privileges and incentives than local private enterprises, such as lower tax rates or access to land. In addition, due to its political stability, many foreign investors have considered Vietnam an investment hub alternative to China. Since 2007, FDI in Vietnam has increased signicantly. The FDI sector has reported impressive average growth of 23% per annum9 in terms of contribution to nominal GDP over the last decade, reecting the sectors increasingly signicant role within Vietnams economy. Industry sectors in which investment is encouraged/ specially encouraged to support the countrys sustainable economic growth include amongst others: Production of light construction, composite, soundproof of or other types of new materials; Construction of establishments using new energy, such as solar or wind power or bio gas; Application of high, new and bio-technology; Treatment of pollution, protection of environment and collection of waste; Developing the petrochemicals industry ; Investing in building power plants, power distribution and transmission networks;
Corporate Structure Vietnam now allows companies to be transformed into jointstock companies in order to attract more capital from foreign investors, diversify investment forms, and improve the investment environment. In addition, listed companies have been able to increase the proportion of shares held by foreign investors from 30% to 49% since 2005. The Investment Law was introduced and applicable to all types of enterprise, providing equal treatment for enterprises of all nationalities without any discrimination between domestic and foreign investors. Following WTO commitments, signicant changes are expected across various sectors, including to the ownership structure in the services sector. From 2011 foreign investors will be allowed to establish a 100%-foreignowned company in petroleum exploitation support services.
Foreign Investment
Vietnam has introduced various measures to encourage foreign investment into Vietnam. Investment in certain sectors, for example, infrastructure, high- and biotechnology, development of the petrochemicals industry is highly encouraged. Similarly, investment in certain geographical areas of Vietnam can be encouraged. Overall, investment or business sectors in Vietnam can be divided or categorised into four areas: those in which foreign investment is specially encouraged; those in which foreign investment in encouraged; those in which foreign investment is conditional upon satisfying additional conditions; and nally those in which foreign investment is prohibited. Under Viet Nam legal system, investment projects in the specially encouraged and encouraged sectors can be entitled to land incentives and tax incentives. The extent of the tax incentives has been however been reduced over the past few years so that only a few of these encouraged sectors are now entitled to them.
Incentives for Foreign Investment Since 2009, tax incentives have been available for some of sectors that are special encouraged or encouraged by the Government. These sectors include scientic research and technological development, infrastructure development, projects in high-tech industries or high-tech zones, software development, training and health care, culture, sports and environmental activities. Accordingly, taxpayers may be eligible for preferential tax rates, tax holidays and reductions. An enterprise can be exempted from Corporate Income Tax (CIT) for a certain period beginning immediately after it rst makes prots, followed by a period where tax is charged at 50% of the applicable rate;
----------------------------------------------------------------------------------------------------(9) Vietnam GSO, PwC calculation
14
Import duty exemptions are also available for the import of machinery and equipment to form xed assets of encouraged projects and for use in the oil and gas sector; Value-added tax (VAT) is exempted for certain categories of purchases: imported leased drilling rigs and ships that cannot be produced in Vietnam; equipment, machinery, spare parts, specialised means of transportation.
Longer-term prospects for Vietnam as an FDI destination are expected to remain favourable since the Government is making tremendous efforts to x infrastructure and red tape problems which in the past have caused issues for investors. By sector, manufacturing has been the largest FDI-attracting sector since 1988. In terms of investment sources, strong economies in Asia including Korea, Japan, Taiwan and Singapore have been Vietnams largest long-term investors.
Newly registered capital by sector, 1988 - Jun.2012 Real estate 28% Construction 6% Accommodation and Food service 6% Electricity, gas, stream and air conditioner supply 4%
Multi & Bilateral Trade Agreements

The Vietnamese Government has been pursuing an open economic policy in favour of foreign trade, rapid liberalisation and integration into the global economy. In order to improve the foreign trade environment, various actions have been taken by the Government. In terms of external relationships, the Country has increased its presence in the international arena to boost its market openness and to liberalise foreign investment activities. Vietnam has been a WTO member since 2006. Since then, the Country has gradually improved its regulatory environment in accordance with its WTO commitments. Apart from the WTO, Vietnam is also a member of a growing network of Free Trade Agreements (FTAs), both individually and as a member of ASEAN. Particularly, in 2011 2012, Vietnam has begun negotiating a Free Trade Agreement with the EU. Vietnam has become a negotiating member of the Trans-Pacic Strategic Economic Partnership (TPP) on Financial Services and Investment Agreements. Accordingly, trade barriers will be lowered further and agreement between the EU and the TPP is expected to be concluded in 2013 2015.
Manufacturing 56%
204 billion USD
Top ve inbound FDI 1988 Jun 2012 Japan Korea Taiwan Singapore British Virgin Islands
Registered Capital 1988 Jun 2012 (USD Bill.) 28.0 24.1 23.7 23.1 15.5
Source: MPI 2012
Vietnams Investment Factsheet

The last ten years witnessed a steady FDI inow into Vietnam with signicant growth in terms of both registered and disbursed capital reecting investors longterm interest in and commitment to the country. Amidst the world economic downturn, disbursed FDI remained relatively stable at USD10 to USD11 billion per annum during 2008 2010.
Foreign Direct Investment, 2001-2011 12 11 11 12 1,5441,557 10 10 8 8 1,208 1,091 987 6 970 969 555 808 791 811 4 3 4 3 3 3 2 2 01 02 03 04 05 06 007 008 009 0 1 0 0 1 1 2 20 20 20 20 20 20 2 2 2 2 Disbursed Capital (Bill. USD) 1,600 1,400 1,200 1,000 800 600 400 200 -
Relative to GDP, its net ows of inward FDI are much higher than the other Asia Pacic countries.
Openess to Foreign Investment
Change in net flows of inward FDI as % of GDP (2007-2011)
10% 0%
Indonesia
India -10% -20% -30% -40%
Malaysia Vietnam Singapore
China
Thailand Phillipines 0% 5% 10% 15%
No. of Projects
Source: Vietnam GSO, MPI
Net flows of inward FDI as % of GDP, 2011

Source: Economic Intelligence Unit 2012
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Country Snapshot
LAOS
VIETNAM
THAILAND
CAMBODIA
MALAYSIA
Area Population
330,957.6 sq km 87.84 million 31.7% in urban areas Capital: Hanoi City Largest city: Ho Chi (Population: 7.5 million) Minh City
Currency Exchange rate (2011) Labour force
Vietnamese Dong (VND) USD 1 = VND 20,649
Key Cities
51.4 million USD 53.1 billion (rst half of 2012) Major commodities: textiles, crude oil, footwear, shery products, electronic goods, computers and parts Major trading partners: US, EU, ASEAN, Japan, China, USD 53.8 billion (rst half of 2012) Major commodities: Machinery, instruments, rened petroleum oil, iron, steel, textile fabrics, electronic goods, computers & parts Major trading partners: China, ASEAN, Japan, Korea, EU USD 203 billion (1988 Jun. 2012) Major investors: Japan, Korea, Taiwan, Singapore, British Virgin Islands
Source: Vietnam GSO Jun. 2012, MPI Jun.2012
Administrative Units
64 provinces and cities directly under the Central Government
Exports
GDP
Nominal USD 122.8 billion Per capita USD 1,375 Growth 5.89%
Imports
GDP composition
Agriculture: 22% Industry: 41% Services: 37%
Foreign Direct Investment
16
Chapter 2: PVN as the Partner of Choice
17
Established in 1975, Vietnam National Oil and Gas Group (Petrovietnam - PVN) is among Vietnams leading economic groups with signicant contribution to the Countrys economy. The Groups total revenue is equivalent to around 20% of the entire Countrys GDP. PVN has maintained its position as the Ccountrys economic locomotive. In 2011, PVN achieved a total revenue of USD 32 billion and prots before tax of USD 4.25 billion. It and contributes for approximately 30% to the State Budget. Looking towards 2015, PVN targets to reach c. USD 47 billion in total revenue. PVN is now focusing on ve core businesses structured around the oil and gas sector, namely: oil and gas exploration and production, renery and petrochemicals, gas, power generation, and petroleum services. PVN not only has a formidable presence in the domestic market but has grown noticeably in international markets thanks to its foreign strategic partnerships. PVN has participated in a number of oil and gas exploration and exploitation contracts in Russia, Latin America, Middle East, Africa and Southeast Asia. The Groups growth internationally both helps to broaden its market potential and also to promote its brand and reafrm Vietnams economic position in the international arena.
Historical Milestones
2000 - Present 1989 - 2000 Following Vietnam's "Doi Moi", PVN signed 40 contracts with 50 international oil companies 1997: PVN's 50 millionth tons of crude oil produced Development and internationalization of E&P activities; Expansion of mid and downstream activities; 2005 - 2009: Construction and operation of Vietnam's first oil refinery plant in Dung Quat; 2009: PVN's 250 millionth ton of crude oil and 50 billion m3 of gas produced 2011: PVNs 280 millionth ton of crude oil and 70 billion m3 of gas produced.
1981 - 1988 Vietsovpetro (VSP) established as a joint venture between Vietnamese and USSR Government; 1986: First barrel of crude oil was produced in Bach Ho field, listing Vietnam in the world's oil producer map 1988: Petrovietnam's first millionth ton of crude oil produced.
1976 -1980 Executed 5 petroleum contracts with 3 foreign oil companies for exploration and production in the South Continental Shelf
1975 Establishment of General Department of Oil and Gas (now PVN)
Major Business Activities and Strategy

The Groups ve core businesses are supplemented by a number of related business activities of supporting industry companies. In terms of oil and gas exploration and production, PVN is currently operating twenty oil and gas elds in the country and ve others abroad. It is cooperating with various international petroleum companies in the implementation of 60 petroleum contracts at home
and 17 contracts in 14 countries. In the future, PVN will continue to conduct more oil and gas exploration activities over the entire continental shelf of Vietnam while at the same time, invest further in overseas exploration ventures. In the renery, petrochemicals and bio-fuel sector, the Group plans to expand renery and petrochemicals capacity and build supporting storage and supply systems of equal size. The Dung Quat Renery is now supplying
18
30% of domestic demand. In the coming years, PVN will make more investments in expanding the Dung Quat Renery and in constructing the Nghi Son and Long Son Renery and Petrochemical Complex (the Long Son Petrochemical Plant) to raise the total rening capacity to 16-17 million tons per year by 2015 and 30 million tons per year by 2025. As for the gas industry, PVN will develop an integrated industry with a focus on the development of the national gas industry infrastructure. The completion of the gas industry infrastructure in the South and the formation of the infrastructure for the gas industry in the North and Central regions will ensure sufcient gas supply to industry and for public consumption. PVNs objective is to produce 17-21 billion m3 of gas a year by 2015, 22-29
billion m3 of gas and 3-4 million tons of LPG by 2025. In the power generation sector, the Group will continue to participate in power generation and be the second largest power producer after EVN. Its focus will be gas- and coal-red power generation in parallel with the gas industry development programme mentioned earlier so that by 2015 the total power generation capacity of all PVNs power plants will be over 9,250 MW and 13,000 MW by 2020 accounting for approximately 20% of total Countrys power production. With regards to petroleum technical services, PVN will continue to develop its capability to better address the domestic petroleum services demand while making rm steps towards the regional and international markets by 2020.
Vision Toward 2025 To Be The Flagship Petroleum Group In The Region By 2025 A Pride Of Vietnam
PVN and the Government

PVN is a leading state-owned economic Group with revenue accounting a signicant partfor 20% of the Nations GDP and contributing a signicant part to the State Budget. PVN is one of the government bodies used to realize national macroeconomic objectives. On the one hand, the Government reserves total control over the corporations organisation and operations. On the other hand, PVN acts as the Countrys economic locomotive not only in the oil and gas sector but also in energy-related industries. PVN is considered the government vehicle for implementing and realising national strategic energy plans as well as other macroeconomic plans to support the countrys growth.In the Governments future energy plan to boost the Countrys energy sector as well as strengthen its global competitiveness, PVN is placed at the core. In other words, the Group is backed by the Government and receives support in terms of both nance and policyrelated matters. In the power sector PVN also has a pivotal role in realizing the Countrys energy development plan. PVN has been assigned by the Government to develop a number of important national power projects. PVN is the second largest power producer in the country, only after EVN. PVN also represents the Country in promoting energy cooperation between Vietnam and other countries through various cooperation agreements signed between the corporation and foreign National Oil Corporation (NOCs). PVN is the agship of Vietnams state-owned enterprises (SOEs). Vietnam has ambitious plans to speed up the
renovating and modernizing the Countrys large SOEs, transforming them into international competitors that are more market-oriented and efcient. PVN takes a lead role in this plan.
PVN as the Partner of Choice

PVN is the preferred partner for foreign companies who wish to participate in the countrys energy market. The Group has impressive track records in developing projects on its own and together with foreign partners. The following successful stories provide an overview of what PVN and its partners have achieved together:
Nam Con Son Pipeline 1 The Nam Con Son Pipeline is the rst and longest pipeline of Vietnam. It was developed jointly by PVN (51%), BP (32.67%) and ConocoPhillips (16.33%) in the form of a BCC. The pipeline has a capacity of 7 billion m3 per annum and came into commercial operation in 2003. It supplies natural gas to the Phu My Power Complex, Phu My Fertilizer and other petrochemical factories in the surrounding area. The pipeline currently operates at full capacity. The revenue from transportation of gas in 2010 reached USD 220 million. The success of Nam Con Son pipeline 1 encouraged PVN to expand the project to Phase 2, which expects to enter commercial operation by 2018.
19
Block B Omon Gas Pipeline Project The project Block B Omon Gas Pipeline is a key project in Vietnams oil and gas industry. Construction of the pipeline system started in November 2009 and is planned for commercial operation in Q2/2014. Once put into operation, the system will transfer natural gas from Block B, 48/95 and 52/97 (B & 52) in the southwest sea of Vietnam to provide gas for power plants in Omon and Tra Noc Can Tho Province (capacity: 3,000 MW), to 2 Ca Mau power plants and to households in the southwestern region of the country. With a total length of 400 km, of which the offshore length is 246 km and the onshore length is 154 km, cutting across Can Tho City and 4 provinces (Hau Giang, Kien Giang, Bac Lieu, Ca Mau), the project can deliver 18.3 millions m3/day-night (6.4 billion m3/year). Total investment capital of the project is USD 1 billion in which PVN holds a 51% ownership, Chevron 29%, MOECO 15% and PTTEP 5%. The cooperation for this project marked a milestone in Vietnams long-term partnership with foreign counterparts in constructing gas pipelines. The project will act to encourage foreign investors to participate in implementing gas projects in Vietnam in the future.
The project is being jointly developed by Kuwait Petroleum International (KPI) 35.1%, Idemitsu Kosan (IKC) 35.1%; Petrovietnam 25.1% and Mitsui Chemicals (MCI) 4.7%. With the involvement of foreign partners, Nghi Son Renery will become a renery of international standards with modern technology. The joint venture also gives the renery a stable and long-term crude oil supply that helps it to maintain sustainable growth and competitiveness in terms of operations and efciency and the establishment of high quality human resources.
PVN Gazprom Gas Exploitation Joint Venture

The Joint Venture Agreement (JVA) with Gazprom - Russias top gas producer - is PVNs most recent partnership. The two corporations signed a JVA in April 2012. Under this agreement, Gazprom holds a 49% share in the joint venture, the key business activity of which is to exploit gas in Block No. 05.2 and 05.3 along Vietnams continental shelf. Two gas condensate elds Moc Tinh and Hai Thach as well as the Kim Cuong Tay oil eld were discovered in these two blocks. Gas reserves in these elds are estimated at 55.6 billion m3, together with 25.1 million tons of gas condensate. Gazprom and PVN have plans to launch the construction of 16 production wells at depths of 2,000 to 4,600 meters in order to develop the elds.
Vietsovpetro Joint Venture

This is the rst joint venture with foreign partners of Vietnam in the oil and gas sector and is one of the most successful foreign partnerships. Three of their oilelds are currently under production of which Bach Ho is the largest oileld in Vietnam and the 3rd largest in the Northwest Pacic Region (Japan, China and ASEAN). OAO Zarubejneft holds a 49% interest in the joint venture. The remaining 51% is held by PVN. In 2011, the total revenue from sale of crude oil reached USD 5.61 billion. The Russian partners share of the prots reached over USD 580 million, a USD 121 million higher than previous year.
PVIs Partnerships with Oman, Talanx and Sun Life

PVI is one of the leading insurance companies of Vietnam. In 2011, PVI generated a gross premium of US$202 million. Total revenue growth was 25% year-on-year. 2011 was the second year PVI was rated Financial Strength Rating of B+ (Good) by A.M Best and acknowledged as the honourably prized Insurance Company of the Year, Vietnam by World Finance. PVI Reinsurance - a subsidiary of PVI, was also rated Financial Strength Rating of B+ (Good) by A.M Best in 2011. After signing the partnership agreement with Oman Investment Fund, PVI has entered into a strategic investment agreement with Talanx Insurance Investment (Germany). Recently, PVI and Sun Life Financial have signed an agreement to form a life insurance joint venture - PVI Sun Life. This establishment will help PVI to become the second insurance company in Vietnam providing both life and non-life insurance products.
Nghi Son Complex
Petrochemical
and
Refinery
Nghi Son is Vietnams second planned renery after the Dung Quat Renery. Once operations commence in 2016 (targeted), the plant will have a capacity (Phase 1) of 10 million tons of crude oil per year (200 thousand BPD), using crude oil from the Middle East. Nghi Sons main products will include A92, and A95 petroleum, diesel, jet fuel, etc. Nghi Son and Dung Quats outputs are sufcient to meet about 60% of domestic demand for petroleum products.
20
Overview of Non E&P Projects

Total Investment Capital (million USD) Total Assets Equity 31/12/2011 Ownership (million Offering USD) 7 projects PVGas PVGas PVN PVN PVN PVN PVN, other investors PVN, PVFCCo, Vinatex, Phong Phu Corp. Ba Ria - Vung Tau Province Ca Mau Province 1,300 700 49% 49% 49% 49% 71% 49% 2,209 324.85 21.7% 20% 9 projects PVN PVPower PVN PVN PVN Hau Giang Province 1,633 49% 49% 49% 49% 49% 49% 42.32% 31.2% 49% 7 projects PVN, Sonadezi Corp PVN PVN, VanEck Association Corp., Vietwealth Corp, Others PVC PVN, Morgan Stanley, Others PVN, PVFC, ACB, Others Dong Nai Province 979 49% 49% 817 571 4,300 388 2.610 17% 49% 15% 22.4% 29% Quang Ngai Province 749 Hanoi City Hanoi City Hanoi City Ho Chi Minh City
No.
Project Name
Owner
Location
I I-1 I-2 I-3 I-4 I-5 I-6 I-7 I-8 II II-1 II-2 II-3 II-4 II-5 II-6 II-7 II-8 II-9 III III-1
Mid-and-Downstream Nam Con Son No.2 Pipelines Ca Mau Gas Processing Plant Dung Quat Renery (Existing) Dung Quat Renery (Expansion) Long Son Renery Ca Mau Fertilizer Plant Petrovietnam Gas Corporation (PVGas) Petrovietnam Petrochemical & Textile Fiber Joint Stock Company (PVTex) Power Song Hau 1 Coal-red Power Plant Hoa Thang 1 Wind Power Plant Thai Binh 2 Coal-red Power Plant Vung Ang 1 Coal-red Power Plant Quang Trach 1 Coal-red Power Plant
Quang Ngai Province 3,000 Quang Ngai Province 1,212 Ba Ria - Vung Tau Province Ca Mau Province Ho Chi Minh City Hai Phong City 7,0008,000 900.2
Binh Thuan Province 83 Thai Binh Province Ha Tinh Province 1,656 1,595
Quang Binh Province 1,778 Soc Trang Province 1,595
Long Phu 1 Coal-red Power Plant PVN DakDrinh Hydro Power Plant Hua Na Hydro Power Plant Nhon Trach 1 Thermal Power Plant Services Phuoc An Port
PV Power, BIDV, Licogi, SongDa Group, DHCs Quang Ngai Province 238 employees PV Power; Lilama, BIDV, MB PVPower Nghe An Province Dong Nai Province 288 322
III-2 Dung Quat Shipyard Construction Joint III-3 Petrovietnam Stock Company (PVC) III-4 Petrovietnam Tower Finance III-5 Petrovietnam Corporation (PVFC) Transportation III-6 Petrovietnam Corporation (PVTrans) Oil Stockpile III-7 Petrovietnam Company Limited (PVOS)
PV Oil, Binh Son Petrochemical Company Ho Chi Minh City Ltd (BSR) SEK
----------------------------------------------------------------------------------------------------(10) Newly set-up company
Chapter 3: Partnership by Sector
21
Chapter 3: Partnership by Sector
1. Upstream Industry 2. Mid & Downstream Industry 3. Power Industry 4. Services
22
1. Upstream Industry
Upstream Industry Overview
Surging Oil and Gas Production in the Short Term
Daily Production (mbo/day)
Vietnam Oil Production (Gross, mbo/d) 450 400 350 300 250 200 150 100 50 0 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Gas production increased by 21.9% per annum between 2002 and 2009, and is projected to grow by 6.3% in 2012 2020 with a peak in production in 2018 of c.1,400 mmcf/d. According to PVN press releases, many gas pipeline projects have been invested to feed the rapid expansion of Vietnams gas industry. PVN plans to invest US$ 1.3 billion to develop a second gas pipeline from Nam Con Son Basin to Southern Vietnam, which will boost onshore gas production by 30% - 40%. In 2010, a US$ 1 billion BCC was signed between PVN, Chevron (America), MOECO (Japan) and PTTEP (Thailand) to build a 400 km pipeline from Cuu Long Basin to Can Tho, which is expected to start production by 2014.
Source: PVNs report
The country has emerged as an oil producer since the discovery of the Bach Ho (White Tiger) oil eld in 1987. One of the biggest new oil eld developments is the Su Tu Vang (Golden Lion) eld, started in 2008, and Te Giac Trang (White Rhino), started in 2011. Vietnams oil production grew 3.11% per annum between 1998 and 2009, and will reach a peak of 420 mbo/d in 2014, reecting a CAGR of 3.71% in 2009-2014. However, oil production is projected to gradually decline in the period of 2014 2020 and achieve only 150 mbo/d by 2020.
Vietnam Gas Production
1,600 $180 $160 $140 $120 $100 $80 $60 $40 $20 $Oil Price $/bbl
Important Asian Market with Promising New Reserves

Vietnam has 1 million km sea areas and the Country has the 4th largest11 oil reserves in Asia Pacic. The national crude oil reserve is expected to reach 1.1 million m3 in 2020 and 3.1 million m3 in 202212. Moreover, it is located in close proximity to major oil consumer China.
PVN as the Key Partner in Exploration and Production

PVN is by far the most important oil and gas producer in Vietnam. PVN has an 85% market share in the oil/ liquid production market and a 71% market share in the gas production market. The Group has built several partnerships with international oil companies. The largest partnership is Vietsovpetro, which is a joint venture of PVN and the Russian Government. The Group currently accounts for approximately 40% of Vietnams crude oil production and operates the biggest oil eld, Bach Ho (White Tiger). In addition to development of domestic oil fields, PVN has expanded its network in Asia, Commonwealth of Independent States (CIS), the Middle East, Africa and South America. In recent years, PVN has participated
Gas Production (mmcf/d)
1,400 1,200 1,000 800 600 400 200 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
PVN Net Gas Entitlerrent Vietnam Government Gas to PVN Not-PVN Gas
Oil Price
Source: PVNs report
----------------------------------------------------------------------------------------------------(11) BP Statistical Review of World Energy Report 2011 (*) Note: Oil and gas production data is crude production volume from oil elds (12) PVNs report
Chapter 3: Partnership by Sector - Upstream Industry
23
in exploration and production 17 contracts in 14 countries. The Government actively promotes foreign involvement in the oil and gas exploration and production13: Private Ownership: Foreign companies are allowed to independently explore for oil and gas. Although the presence of the State is still required for all producing projects, international oil companies can hold majority of shares and have the right to receive a share of output14. More open and transparent licensing scheme: The Petroleum Law amended in 2000 provides more open and transparent scheme about duty and right of foreign investors in this industry in terms of
extension of contract time, level of cost recovery for exploration, development and production, etc. Attractive tax framework: Special tax scheme is applied for petroleum investment promotion projects, i.e. encouraged project could enjoy corporate income tax rate of 32% (as compared to the standard corporate tax rate applicable to oil & gas production of 50%) and reduced royalty rate. Moreover oil and gas investors are exempted from some special tax rate, i.e. 0% import tax for machinery equipment and materials used for oil and gas activities.
PVN is now offering a number of joint exploration projects in Vietnam. The project details are outlined in the following project proles.
Overseas Oil and Gas Exploration and Product Projects

ALGERIA Petroleum Contract, Block 433a &416b
RUSSIAN FEDERATION Rusvietpetro: A Joint Venture with Zarubezhneftt Gaspromviet: A Joint Venture with Gas prom MONGOLIA Petroleum Contract, Block Tamsag UZBEKISTAN Petroleum Contract, Block Kossor
CUBA Petroleum Contract, Blocks 31,32,42 & 43 (offshore)
LAO PDR Petroleum Contract, Block Champasak and Saravan Petroleum Contract, Block Savanakhet CAMPUCHIA Petroleum Contract, Block XV MALAYSIA Petroleum Contract, Block PM304, (offshore) Petroleum Cortract, Block 5K305, (offshore) INDONESIA Petroleum Contract, Block Randugunting MYANMAR Petroleum Contract, Block M2
VENEZUELA Block Junin-2
PERU Petroleum Contract, Bfock 162 CONGO Petroleum Contract, Block Marine XI
MADAGASCAR Petroleum Contract, Block Majunga (offshore Propond)

----------------------------------------------------------------------------------------------------(13) Source: Oil and Gas Law #19/2000/QH10, BMI Oil and Gas Report Quarter4/ 2011 (14) Generally, all of the natural resources belong to the Government
24
Vietnam Petroleum Activities
Cuu Long Basin

01&02 (HN) PCOSB 01/97&02/97 Lam son JOC 01/10&02/10 PVEP POC 09-1 Vietsovpetro 09-2 Hoan vu JOC 09-2/09 PVEP POC 09-2/10 PVEP POC 09-3 (DM-NR) VRJ JOC 15-1 (ST) Cuu long JOC 15-1/05 PVEP POC 15-2 (RD) JVPC 15- 2/01 (HSD) Thang long JOC 16- 1 (TG) Hoang long JOC 16-2 PVEP POC DBSCL-02 Total E&P Vietnam DBSCL-03 Total E&P Vietnam
Nam Con Son Basin

04-1 Vietsovpetro 04-2 Pearl Oil Tephrite 04-3 Vietsovpetro 05- 1a (DH) PVEP POC 05-lb&05-lc Idemitsu 05/10 (HT&MT) Bien Dong POC 05-2/10 Talisman 06-1 TNK Vietnam 07/03 Premier Oil 10&11-1 (GC) Con Son JOC 11-2 (RD&RDT) KNOC 12W (CS&D) Premier Oil 13/03 Santos 19 Mitra Energy VNPQ 20 Mitra Energy VNRD 28&29/03 BHP Billiton 129-132 Vietgazprom
Song Hong Basin

100&101/04 Santos 102 (TB), 106 (HR) PCVL 102&106/10 PVEP POC 103&107/04 PVEP POC 104&109/05 Premier Oil 105&110/04 Neon Energy 111/04, 112, 113 Vietgazprom 114 Essar E&P Ltd. 117, 118, 119 ExxonMobil 120 Neon Energy 121 Origin Energy MVHN-02 Quad Energy MVHN-01KT Arrow MVHN-02KT Keeper
Phu Khanh Basin

123 Santos 128 ONGC Videsh 148&149 PVEP
Malay-Tho Chu Basin

45 Mitra Energy VNMH 46 (CN) Talisman Vietnam 46/02 Truong Son JOC 46/07 Mitra Energy B & 48/95 Chevron Vietnam 51 Mitra Energy 52/97 Chevron Vietnam PM3 CAA Talisman
Tu Chinh Basin
133&134 Talisman 135&136/03 Talisman 156-159 ExxonMobil
Bacbo Gulf-2005 HTSP
25
Song Hong Basin - Blocks 101 & 100/04
Key opportunity highlights Proven Petroleum System High quality oil & gas sampled in exploration wells. Excellent reservoir properties, high ow rate potential. Exploration uncertainty is trap size. Gas monetisation uncertainty in economic assessment.
Geological setting Block 101 & 100/04 is located within the proven petroleum system and surrounded by discoveries. Oil and gas were found in Tertiary clastics in wells of this block. The Ha Mai, Cat Ba elds were discovered in 2009 and 2011, with proven reserves of around 30.2 Bcf gas and 4.7 MMbbls. The main objective is Tertiary clastics and Paleozoic carbonate. Several discoveries are found in the east of Block 101 & 100/04 in the Beibu Wan Basin. The largest eld, Wei 12-1 is estimated to have recoverable reserves in the range of 85 100 MMBO with single well production rates of up to 34,000 BOPD. Within the northern Song Hong Basin recent discoveries are at Yen Tu-1X and Ham Rong-1X wells in Middle Miocene sandstones and Paleozoic limestones.
Prospects Eleven (11) promising prospects have been identied with total resources of around 547 mbbls oil and 297 bcf gas. The main proven targets are Tertiary clastics and Paleozoic carbonate.
26
Song Hong Basin - Blocks 108/04, 116
Geological setting The Tertiary sedimentary Song Hong Basin is made up of different structural units with different hydrocarbon potential. Block 108/04 lies in the Central Trough of the Song Hong Basin, which is lled up with a sediment package accumulated in tectonically stable conditions. Block 116 lies in the Quang Ngai graben where Tertiary sediment comprised of Eocene to present day sediment with a thickness of appx. 9,000 m. Quang Ngai graben is a relatively simple geological structure (a narrow deep sag) dominated by Miocene submarine sand bodies of high reservoir quality. This graben is one of the major kitchens in the Southern part of Song Hong Basin. Petroleum systems Proven petroleum basin containing oil discoveries (10 oil and gas discovery wells) Source rock Oil and gas-prone Paleogen-Lower Miocene lacustrine shales in Quang Ngai graben and the centre of Song Hong Basin. Probably Middle Miocene marine mudstone in the center of the Song Hong Basin. Miocene clastic turbidite fans; Lower Miocene sandstone; Pre-Tertiary basement. Local seal in Lower Miocene shales; Regional seal in Miocene-Pliocene shales. Major prospects for low magnitude four way dip closure on the Dong Son uplift in the block 108/04 related to gas accumulation. Pre-Tertiary basement highs, drape over basement, stratigraphic traps (block 116).
Reservoir Seal
Trap
27
Song Hong Basin - Blocks 108/04, 116
Block 108/04 Area: 1,210 km2 Location: Offshore North Vietnam Sea level: 20-50 m Seismic: 460 line-km 2D Well: No well Block 108/04 is thought to have commercial hydrocarbon potential. There are many oil and gas discoveries found in adjacent areas such as Ham Rong, Yen Tu, Hac Long and Dong Fang
Block 116 Area: 5,033 km2 Location: Offshore North Vietnam Sea level: 20-110 m Seismic: 3619.3 line-km 2D Well: No well Block 116 is thought to have hydrocarbon potential. Oil and gas discoveries are found in neighbouring blocks 114, 115, 117 and 118.
28
Song Hong Basin - Blocks Hanoi Trough (MVHN), MVHN - 01KT & 03KT
Geological setting Ha Noi Trough is divided into the Central Belt sandwiched between the Song Chay and the Vinh Ninh fault zones; the NE Belt from Vinh Ninh fault zone passing through the Song Lo fault; and the SW Belt between the Red River fault and the Song Chay fault. The sedimentary section consists of two structural units. The lower unit is Proterozoic to late Mesozoic paleobasement. The upper one consists of Cenozoic sedimentary rocks that overlie unconformably on the older formations. The upper structural unit in MVHN with maximum thickness of 7km, has been formed in Eocene-Oligocene by extension activity. In the Late of Oligocene, extension activity stopped, and subsidence occurred throughout the area. From Late Middle to Late Miocene, there was an inversion tectonic phase that formed a series of reverse faults such as the Vinh Ninh fault and the Tien Hai fault.
Petroleum systems Source rock Reservoir Seal Trap Terrestrial and terrestrial/lacustrine Oligocene sediments; Promising Triasic shale (found in tidal zone of the area) Miocene sandstone, Oligocene sandstone, DevonianCarboniferous-Permian carbonate Regional seal: Upper Miocene-Pliocens claystone; Local seal: Oligocene and Miocene claystone, fault seal Oligocene and Miocene anticlines; Pre-Tertiary basement highs; stratigraphic trap; drape over basement
29
Song Hong Basin - Blocks Hanoi Trough (MVHN), MVHN - 01KT & 03KT
Block MVHN (Hanoi Trough) Area: 3,631 km2 Location: Onshore Song Hong Basin Seismic: 6,000 line-km 2D Wells : 46 petroleum exploration wells MVHN is a petroleum-potential block. This is demonstrated by oil and gas discoveries at the wells and one gas eld is producing. Offshore close to the MVHN one gas eld in block 102 is going to be developed. Block 106 has the Ham Rong Oil discovery
Block MVHN-01KT & 03KT Area: 3,627 km2 Location: Onshore of Song Hong Basin Seismic: 3,400 line-km 2D Wells : 37 petroleum exploration wells 15 Coal Bed Methane wells MVHN-01KT & 03KT are considered to be coal bed methane blocks. Exploration CBM work showed high CBM potential at intervals of 800-1,500 meters
30
Phu Khanh Basin - Blocks 122, 124
Geological setting The Tertiary sedimentary Phu Khanh Basin is related to the development of the Bien Dong Sea, extrusion of Indochina (L. Eocene E. Oligocene), and associated with sea oor spreading (Top Oligocene), end of rifting and sea oor spreading (Top Middle Miocene) and thermal subsidence.
Petroleum systems Proven petroleum basin containing oil discoveries Source rock Reservoir Seal Trap Hydrocarbon Occurrence Lacustrine sediments deposited in graben and half-graben lakes during the main rifting phase. Paleogene uvial sandstones; Neogene turbidite-, shelf-, lowstand delta- and coastal sandstones; Early Miocene platform and reef carbonates; Pre-Tertiary basement. Local seal: interbedded shales; Regional seal: Late Miocene & Pliocene shales. Faulted basement highs; drape clastics on basement high/ tilted fault blocks; ower structures; carbonate platform. Oil discovery and gas shows in two exploration wells and one oil seepage in Dam Thi Nai area.
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Phu Khanh Basin - Blocks 122, 124
Block 122 Area: 7,007 km2 Location: Offshore, middle part of Vietnam Sea level: 50-2000 m Seismic: 4,000 km 2D Well: No well Potential for shallow water paleo-shelf margin carbonate, clastic and carbonate structural traps and deep water sands.
Block 124 Area: 6,030 km2 Location: Offshore middle part of Vietnam Sea level: 50-2000 m Seismic: 1,900 km 2D & 851 km2 3D Well: Two wells (one oil discovery) Petroleum potential: Miocene carbonate, coastal sand, lacustrine delta, basin oor fan & Pre-Tertiary basement.
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Onshore Mekong Delta (DBSCL) - Blocks DBSCL-01,02,03&04

Geological setting Mekong delta comprises a Permian and Triassic Basin in the Northwest and Tertiary sedimentary basin in the Southeast and is related to the two rifting phases in Permian and Early Oligocene. An extension and drifting phase until the end of the Permian period, with consequent compressive phenomena affecting the Khorat Basin in Thailand. Shrinking and/or Collision phase between early Triassic to Jurassic, at rst in the northeast with the South-China block along Song Ma suture line; then to the west along the Nan Uttaradit and Bengtong Raub suture lines.
Petroleum systems in the Mekong delta are referred to adjacent basins Khorat Basin: Source rock Reservoir Seal Trap Permian/Triassic uvial-lacustrine shale; Main gas potential Weathering granites basement, fractured dolomites/ limestone Permian; uvial sandstone Triassic/Jurassic Interbeded Permian, Triassic and early Jurassic shales Clastics drape on paleo highs, titled fault blocks, carbonate platform, inversion folding
Cuu Long Basin: Source rock Reservoir Seal Trap Lacustrine Oligocene shale Oligo-Miocene clastics, fractured granites basement Olio-Miocene Interbeded shales Faulted basement highs, drape clastics, titled fault blocks
33
Onshore Mekong Delta (DBSCL) - Blocks DBSCL-01,02,03&04

DBSCL02 and 03 are close to the Khorat Basin which has prolic hydrocarbon potential in Pre-tertiary fractured carbonate reservoirs DBSCL01 is close to the Cuu Long basin, which has prolic hydrocarbon potential in Tertiary clastics and basement reservoirs DBSCL01, 02, 03 & 04 are potential but frontier and regarded as attractive areas for exploration
Block DBSCL-01,02,03&04 Area: 54,500 km2 Location: Onshore Mekong Delta, South of Vietnam Seismic: 1,317 km (2D) DBSCL-01: 717 km seismic 2D DBSCL-02: 300km seismic 2D DBSCL-03: 300 km seismic 2D DBSCL-04: No seismic data Well: six wells
34
Nam Con Son Basin Block 06/94, 22/03
Geological setting Nam Con Son was formed as a rift basin during the Oligocene period as a result of the Bien Dong extension. It shows elongated depressions trending SW-NE. Tertiary sediment reaches 14,000 meters deep. Block 06/94 lies on the East depression zone, and the Dua uplift sub-zone, which developed in a NE-SW anticlinal structure associated with carbonate formation. Block 22/03 is a transition zone of NCS Western difference subzone and Natuna adjacent subzone where faulting activity outweighs with two fault systems: NE-SW & NW-SE. This block is composed of a deep narrow trough (up to 6000m) with uplift ranges.
Block 06/94 Area: 4,147 km2 Location: Offshore South Vietnam Sea level: 20-100 m Seismic: 17,204.1 km2 2D & 1,022 km2 3D Well: four wells Objectives: Oligocene-Miocene sandstones and Miocene limestones Four nearby gas-condensate elds: Lan Tay, Lan Do, Hai Thach and Moc Tinh.
Petroleum systems Proven petroleum basins containing oil and gas Source rock Coals, coaly shales interbedded with claystones in the Oligocene continental and Lower Miocene marine environment. Upper Miocene-Oligocene uvial-deltaic sandstones, Middle Miocene shallow marine sandstones up-mid Miocene carbonates, turbidite channel sandstones and weathered and fractured Mesozoic Basement rocks. Late Miocene - Early Pliocenene grain sediment. Oligocene - Miocene shale, silt, coal shale and calcareous shale layers are effective local seals. Basement highs and may be either structural or stratigraphic traps such as carbonate reefs/build-up, ower structures, sand lens, turbidite
Reservoir
Seal
Trap
35
Nam Con Son Basin Block 06/94, 22/03
Block 22/03 Area: 4,753 km2 Location: Offshore Southern part of Vietnam Sea level: 20-100 m Seismic: 3,000 km 2D Well: One well (oil show and good seal) Prospects & leads: Five Objectives: Pre-Tertiary fractured basement and Miocene sandstone Estimated HC Reserve: 2.2 BCFS Petroleum systems Proven petroleum basins containing oil and gas Source rock Reservoir Seal Trap Oligocene shale and coaly shale Oligocene and Miocene sandstones; fractured granite basement Lower Miocene Pliocene shale: good regional seal; Late Oligocene claystone: local seal Basement high, tittled fault block and combination types
36
Phu Quoc Basin - Blocks 31, 32, 33, 34, 35 & 36/03
Geological setting Phu QuocKampot Som Basin is a Late Jurassic to Early Cretaceous foreland basin developed in response to the build-up of the paleo-Pacic magmatic arc. It forms an elongated, more than 500 km long sediment-lled depression extending from south-western Cambodia in the north to the central southern part of the Gulf of Thailand. This basin is up to 150 km wide with its axis along the approximate latitudes of 10301040.
Petroleum systems Source rock Reservoir Seal Trap Oligocene shales Oligocene Miocene sandstones Oligocene Miocene interbeded shales Tilted fault blocks
Hydrocarbon Oil elds in adjacent Cuu Long basin. Occurrence
Block 2 Area (km ) Sea level (m) Seismic 2D (km) Well HC Potential
31 5,036 20 1,294 1 Cenozoic Basin
32 4,440 20 - 30 685 Cenozoic Basin
33 4,630 30 - 40 431 Cenozoic Basin
34 4,700 50 477 Cenozoic Basin
35 4,630 50 380 Cenozoic Basin
36/03 2,950 50 593 Cenozoic Basin
37
Phu Quoc Basin Block 37, 38, 41, 43, 44, 47/01
Petroleum systems Source rock Reservoir Seal The Cretaceous Phu Quoc Formation, which contains coal layers (the so-called jet coal) and Triassic black shales. Jurassic-Cretaceous sandstones; Late Triassic sandstones; Permian limestones (Ratthuri group). Regional seal: Tertiary marine mudstones are the regional seal. The local seal is interbedded shales and fault seals Structural structures; traps: Inversion/compression-related
Trap
Stratigraphic traps: Carbonate build-ups and combined structural-stratigraphic traps.
Hydrocarbon Gas elds / discoveries in the Khorat Mesozoic basin and Occurrence onshore Thailand.
38
Block 37 Area: 5,020 km2 Location: Southwest Offshore Vietnam Sea level: 20-30 m Seismic: 775 km 2D Well: No well HC Potential in Mesozoic basin
Block 38 Area: 6,060 km2 Location: Southwest Offshore Vietnam Sea level: 30-40 m Seismic: 800 km 2D seismic Well: No well HC Potential in Mesozoic basin
Block 41 Area: 5,020 km2 Location: Southwest Offshore Vietnam Sea level: 20 m Seismic: 1,145 km 2D Well: No well Prospects & Leads: 4 HC Potential in Mesozoic basin
Block 43 Area: 4,850 km2 Location: Southwest Offshore Vietnam Sea level: 20 m Seismic: 2461 km 2D seismic Well: No well Prospects & Leads: 4 HC Potential in Mesozoic basin
39
Block 44 Area: 4,760 km2 Location: Southwest offshore Vietnam Sea level: 20 m Seismic: 1109 km 2D seismic Well: No well Prospects & Leads: 2 Potential in Mesozoic basin
Block 47/01 Area: 5,850 km2 Location: Southwest Offshore Vietnam Sea level: 20-50 m Seismic: 1457 km 2D seismic Well: No well Prospects & Leads: 5 MZ Potential in Mesozoic basin
40
Malay - Tho Chu - Phu Quoc Basin - Block 48/05
Geological setting Malay Basin is a NW-SE trending asymmetric feature, 500 km long and 200 km wide, with a steep south-western margin and more than 8,000 meters of Tertiary ll. The origin of this basin is related to major Paleogene plate tectonic movements which led to the collision of India with Eurasia and the resultant opening of the South China and Andaman seas. The SW Vietnam offshore basin is located in NE ank of Malay basin.
Petroleum systems Proven petroleum basin containing oil and gas elds/discoveries in Cenozoic basin Oligocene lacustrine organic mater and mixture of lacustrine and terrestrial organic material, oil prone generation. Lower Miocene source rocks are mainly gas prone with minor oil potential; they contain mainly kerogen type III and a mixture of type I & III. Miocene deltaic clastic Local interbedded shales and regional Late Mio & Pliocene shales Faulted closure anticlines, stratigraphy traps
Source rock
Reservoir Seal Trap
Hydrocarbon Gas and condensate elds in adjacent Blocks B&52/97. Occurrence
41
Malay - Tho Chu - Phu Quoc Basin - Block 48/05
Block 48/05 Area: 4,260 km2 Location : Southwest Offshore Vietnam Sea level: 50 m Seismic: 2311 km 2D seismic Wells: None HC Potential for Cenozoic and Mesozoic structural traps
42
2. Mid and Downstream Industry

Mid And Downstream Industry Overview
Vietnams oil and gas market is expanding quickly on the back of the countrys strong overall economic growth. To meet rising demand the country is embarking on an ambitious plan to build its domestic mid and downstream industry. The following chapter explains the development of the market and the participation opportunities which PVN is offering to foreign investors. Rapidly Growing Oil and Gas Demand
The Vietnamese economy has been growing at an average annual rate of c. 7% historically and is forecast to continue its impressive growth in the future. Vietnamese oil consumption increased by 4.7% per annum during the 2008 - 2011 period and is forecast to grow by 6.2% per year from 326 KBPD in 2011 to 554 KBPD in 2020.
Vietnam's Oil consumption ('000 b/d) 600 500 400 300 200 100 20 08 20 09 20 10 20 1 20 1 12 f 20 13 f 20 14 f 20 15 f 20 l6 f 20 17 f 20 l8 f 20 19 20 f 20 f
Vietnam's Gas consumption (bcm) 30 25 20 15 10 5 0

20 08 20 09 20 10 20 1 20 1 12 f 20 13 f 20 14 f 20 15 f 20 l6 f 20 17 f 20 l8 f 20 19 f 20 20 f
Building a Domestic Mid- and Downstream Industry to Meet Growing Demand

In the midstream segment the Government has approved a signicant expansion plan in order to boost energy security through new storage systems and gas pipelines. To implement this plan, PVN will develop an integrated industry with focus on the development of national gas industry infrastructure. The plan is to complete the gas industry infrastructure in the South and commence the construction of the infrastructure in the North and Central regions. Further investment will be made to build Nam Con Son 2 gas pipeline, Cuu Long Basin gas pipeline, Block B-Omon gas pipeline, two projects to import LNG. The objective is to productive 14 billion m3 per year by 2015 and 15-19 billion m3 of gas by 2016 - 2025 from domestic gas elds. The plan envisions developments which will require a total investment of USD 4.8 billion by 2015. This will ensure the effective transportation of gas from new gas discoveries off the Southwestern coast of Vietnam to areas of demand several new gas pipelines are being planned. So far, Vietnams consumption of oil and gas products has depended heavily on imports. Petroleum oil and rened products are Vietnams second biggest imported
Gas consumption has been growing at a signicantly higher rate than GDP. The key drivers for this development are new gas power plants and the growing adoption by private households and industries of gas as a source of fuel. Gas consumption increased by 8.3% per annum during the 2008 2011 period and demand for gas is expected to continue to rise by 12.1% per year during the period 2011 - 2020, reaching 24.8 billion m3 in 2020.
Chapter 3: Partnership by Sector - Mid & Downstream Industry
43
product, accounting for an average of approximately 11% of Vietnams total import values during the 2005 - 2011 period. In order to realize Vietnams aspiration to create higher value added products and to decrease its dependence on imports, the Government has set out ambitious plans to develop its mid- and downstream industry. Projects in the downstream segment include reneries, fertilizer plants, petrochemical plants, ethanol plants, etc. The efforts in the rening segment of the industry are particularly ambitious. So far, the Countrys oil rening capacity consists of only one renery, Dung Quat Renery, which came on-stream at the beginning of 2010 with a capacity of 148 KBPD. PVN is planning to develop 3 renery-petrochemical centers in the North, South and Central of Vietnam. Currently, at least two new renery projects are being planned by PVN and foreign corporations. It is projected that Dung Quat Renery, along with the planned Nghi Son Renery, will be able to supply 60% of domestic demand by 201615. Dung Quat Renery: This is the Countrys rst renery and commenced commercial operation in 2010. Currently, Dung Quat Renery runs at full capacity and supplies approximately 30% of the total Countrys petroleum demand. PVN is in the process of preparing the feasibility to expand the capacity of Dung Quat Renery up to 192 KBPD. The Expansion Phase is expected to come into commercial operation by 2018.
Nghi Son Renery: Another large renery project with a capacity of 200 KBPD is located in Thanh Hoa province. This project is jointly developed by Idemitsu (Japan 35.1%), KPC (Kuwait 35.1%), PVN (25.1%) and Mitsui Chemicals (Japan 4.7%). The project has been licensed and in the process of nalizing nancial arrangement for EPC award and implementation. Long Son Renery: PVN plans to develop a 200 KBPD renery in Long Son, a province of Ba Ria Vung Tau. This project has a planned cost of approximately US$ 7-8 billion and expected to be put into operations after 2020. PVN is currently looking for strategic investors and nanciers.
With respects to Petrochemical and Bio-fuel segment, PVN plans to develop 3 bio-fuel plants which are expected to put into operation in 2012 and Long Son petrochemical complex, the project is expected to come into operation by 2017.
PVN Offers Attractive Opportunities to Participate

To achieve its ambitious plan, PVN calls for participation from the private sector and is offering various opportunities along the mid- and downstream value chain to foreign investors to participate in the industrys future growth. The opportunities are at different stages of development (see table below).
Partnership with PVN in Mid and Downstream Industry

FS Stage Nam Con Son No.2 Pipelines Ca Mau Gas Processing Plant Dung Quat Refinery (Existing) Dung Quat Refinery (Expansion) Long Son Refinery Ca Mau Fertilizer Plant Petrovietnam Gas Corporation (PVGas) PetrovietnamPetrochemical & Textile Fiber Joint Stock Company (Dinh Vu Polyester Fiber Plant) FEED/EPC stage Construction stage Operational stage
The opportunities are described in detail on the following pages.

----------------------------------------------------------------------------------------------------(15) Source: BMI Q1 2012
44
Petrovietnam Mid & Downstream Projects Map

Petrovietnam Petrochemical & Textile Fiber Joint Stock (Dinh Vu Polyester Fiber Plant) Owner: PVN, PVFCCo, Vinatex, Phong Phu Corp.
Dung Quat Refinery Owner: PVN
Nam Con Son No.2 Pipeline Owner: PVGas
Long Son Refinery Owner: PVN
Petrovietnam Gas Corporation (PVGas) Owner: PVN, others
Ca Mau Gas Processing Plant Owner: PVGas Ca Mau Fertilizer Owner: PVN
45
Nam Con Son No.2 Pipeline
Project Overview Key business activities: Transporting gas from Hai Thach, Moc Tinh elds (blocks 05-2 & 05-3), Thien Ung, Mang Cau elds (blocks 04-3) and other gas elds in the Nam Con Son and Cuu Long Basins Transporting imported gas from neighbouring countries Location: Nam Con Son Basin to the landfall station in Long Hai district, Ba Ria - Vung Tau Capacity: 7 bcm/year Capabilities: Dinh Co GPP2 GPP mode: processing capacity from 6.78 to 9.2 million m3/day, operating from 2015; Handling mode: Modied GPP 16.2 to 18.4 million m3 gas/day. Facilities: Total area: 72.7 ha of land; Pipelines: - Off-shore pipelines from Nam Con Son Basin to Dinh Co Gas Processing 2 (GPP2): 334 km length; - On-shore pipelines from Dinh Co GPP2 to Phu My GDC: 30 km length; - Two onshore condensate and LPG pipelines from Dinh Co GPP2 to Thi Vai terminal. Project life: 30 years Current ownership: PVGas (100% ) Current Status & Schedule Commercial operation: Q2/2015 Completed works: Feasibility study (FS) Environmental impact assessment (EIA) reports PMC contractor selection On-going works: Front End Engineering Design (FEED) Additional geological survey for FEED (onshore pipeline) Site clearance Expansion plan: GPP Mode: Construction of two additional production lines from 2018 that can handle up to 18.4 million m3/day of dry gas
Key Investment Considerations Market potential: New gas discoveries: The project will provide infrastructure to support for new gas discoveries in Nam Con Son Basin and for gas imported from TAGP or from Natuna D-Alpha in the South-East Asia region; Market demand/growth: The demand for gas is expected to continue to rise by 12.1% per year during the period 2011 2020, reaching 24.8 bcm in 2020. Southern provinces are expected to show above average growth due to new gas-red power plants, fertilizer factories as well as industrial and commercial households; Supply decits: Southern Vietnam currently is facing a gas supply decit. The launch of the Nam Con Son 2 Pipeline is forecast to address this decit; Competitive advantages: Government support: - Tax incentives: + Corporate Income Tax (CIT): 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Import duty exemption for construction materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets; - Land cost reduction; Existing facilities: Nam Con Son No.2 can take full advantage of existing facilities and experience from previous gas projects such as Thi Vai terminal and GDC Phu My; Stable supply: Abundant supply of gas as a result of PVGas ownership; Advantageous location: Located in the highest gas consumption region in Vietnam; Equity ownership offering: 49%
Economic Performance Investment capital: approximately US$ 1,300 million NPV: US$ 733 million IRR: 18% Payback period: 6.7 years
46
Ca Mau Gas Processing Plant
Project Overview Key business activities: Process gas from blocks PM3-CAA, 46-Cai Nuoc, B, 48/65, 52/97 Location: Ca Mau province Capabilities: Gas: max input 22.48 million m3/day LPG: average production: 647 tons/day Condensate: average production: 255 tons/day Facilities: Gas processing plant; Pipeline from GPP to Mui Tram Terminal; Mui Tram Terminal; Pipeline from Mui Tram Terminal to Single Point Mooring (SPM); Project life: 25 years Current ownership: PVGas (100%) Current Status & Schedule Expected Q4/2015 time of commercial operation:
Key Investment Considerations Market potential: Market demand/growth: The demand for gas is expected to continue to rise by 12.1% per year during the period 2011 2020, reaching 24.8 bcm in 2020. Southern provinces are expected to show above average growth with new gas-red power plants, fertilizer factories as well as industrial and commercial households; Supply decits: Southern Vietnam currently has a gas supply decit. The launch of the Ca Mau Gas Processing Plant is forecast to contribute to address this decit. Competitive advantages: Government support: - Tax incentives: + Expected to enjoy highest CIT incentives including 10% for rst 15 years, 4 years of CIT exemption and 9 years with 50% reduction; + Import duty exemption for construction materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets ; - Reduced land rental cost; - Other incentives applicable to investment project located in investment encouraged region. PVN support: PVGas provides the plant with easy access to customers throughout Vietnam; Existing Infrastructure/Technology: Can utilise the infrastructure and technology in a modern Gas Power Fertilizer complex; Stable (fuel) supply: stable feedstock supply from PVGas; Advantageous location: Located in the largest gas consumption region of the country and next to customers such as Ca Mau Fertilizer Plant. Equity ownership offering: 49%
Completed works: FS Tender plan EIA report On-going works: FEED bid nalization Site clearance EPC selection preparation Economic Performance Investment capital: Approximately US$ 700 million NPV: US$ 240 million IRR: 16% Payback period: 9.4 years
47
Dung Quat Renery
Project Overview Key business activities: Producing LPG; Unleaded Gasoline; Jet-A1/kerosene; Diesel; FO; Polypropylene, Sulfur Location: Quang Ngai province - Central of Vietnam Capacity: Existing plant: 148 KBPD / 6.5 KMTA Expansion plant: 44 KBPD Facilities: Total area: 338 ha of land and 471 ha of sea (existing) and 134.6 ha (expansion); Main process units: CDU; NHT; ISOM; CCR; KTU; RFCC; LCO HDT; LTU; NTU; ARU; SWS; CNU; PRU; SRU; PPU; Utilities and offsite facilities are designed in accordance with the standard of a grassroots renery; Tank farm: Crude Tank Farm (520,000 m3); Product Tank Farm (390,000 m3); Intermediate Tanks (280,000 m3); Marine facilities: - Crude ofoading facility SPM; - Product jetty: up to 30,000 DWT vessels; - Breakwater: 1,600 m long and 10-11 m high. Project life: 20+ years Current ownership: PVN (100%) Current Status & Schedule Existing plant: Commenced commercial operations since June 2010; achieved 100% capacity utilization Expansion plant: Pre-Feasibility Study (Pre-FS) was approved by the Vietnamese Government Use of imported crude oil DFS is being nalized Expected commercial operations in Q1/2018 Economic Performance Investment capital: approximately US$ 3 billion (for existing plant) NPV: US$ 400 million (for existing plant, FS) IRR: 11.69% (for existing plant, FS) Payback period: 15 years (FS)
Key Investment Considerations Market potential: Market demand/growth: Vietnams average rened product demand is forecast to grow rapidly between 2010 and 2025, but currently relies on import; Supply decits: At present, Dung Quat Renery supplies approximately 30% of the total countrys petroleum demand. It is projected that Dung Quat Renery, along with the planned Nghi Son Renery, will be able to supply 60% of domestic demand by 2016. Competitive advantages: Government support: - Tax incentives; + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Personal Income Tax: 50% reduction; + Import duty exemption on machinery, equipment to form xed assets and certain materials for 5 years from commencement of operation; - Exemption from land rental and land use fee for the entire project life; - Various other nancial and non-nancial supports (e.g. infrastructure) from the Government as this is a core State project in the governments plans to develop its mid- and downstream industry and the project locates in investment-encouraged region. First-mover advantage: First operating renery in Vietnam; Existing infrastructure / Technology: Modern technology of international brands like UOP Stable (fuel) supply: A long-term, stable and comprehensive oil supply source assured by PV Oil; Equity ownership offering: 49% for both existing plant and the expansion phase
48
Long Son Renery
Project Overview Key business activities: producing LPG, unleaded gasoline, jet-A1, diesel, fuel oil, and/or asphalt Location: Long Son Petroleum Industrial Zone, Ba Ria - Vung Tau province Capacity: 200 KBPD (10 KMTA) Facilities: Total area: 810 ha including future expansion; Infrastructure and utilities (power, water, communication). Technology: Advanced technology in deep processing Project life: 25+ years Current ownership: PVN (100%) Current Status & Schedule Expected commercial operation: after 2020 On-going works: Looking for strategic foreign partners Economic Performance Investment capital: US$ 7 8 billion Financial feasibility: In progress
Key Investment Considerations Market potential: Market demand/growth: Vietnams average rened product demand is forecast to grow rapidly between 2010 and 2025. Transport fuels (i.e. gasoline, diesel/ gasoil) are expected to show above average growth rates; Supply decits: At present, Dung Quat only supplies approximately 30% of the total countrys petroleum demand. It is projected that Dung Quat, along with the planned Nghi Son Renery, will be able to supply 60% of domestic demand by 2016. Long Son renery is expected to ll up the remaining supply shortage. Competitive advantages: Government support: - Be strongly supported by the Vietnamese Government and Petrovietnam as this is a core state project in the governments plans to develop its mid- and downstream industry in the Southern region; - Tax incentives: + CIT: 10% for the rst 30 years; Exemption for 4 years from rst year of making prots; 50% reduction for the following 9 years. - Expected to enjoy other favourable tax incentives available to national important projects; Good transportation infrastructure: Located close to domestic and international seaway transportation gateways used for crude import and product distribution; Advantageous location: Located in southern Vietnam - the biggest petroleum fuel consumption market which represents 60% of the countrys demand; Additional facilities: Ability to share some common facilities with the Southern Petrochemical Complex such as: marine facilities, power generation, other utilities and technical services. Equity ownership offering: 71%
49
Ca Mau Fertilizer Plant
Project Overview Key business activity: Producing granular urea Location: Ca Mau Gas-Power-Fertilizer Complex, Khanh An commune, U Minh district, Ca Mau province Capacity: 800,000 tons of urea/year Technology: Ammonia synthesis technology of Haldor Topsoe SA Denmark; Urea synthesis technology of SAIPEM Italy; Spout Fluid Bed Granulation of Tokyo Engineering Corp. Japan; Facilities: Total area: 52 ha of land; Ship loader for export urea to barge/ship; Other necessary facilities; Current ownership: PVN (100%) Current Status & Schedule First commercial operation: April 2012 Economic Performance Investment capital: US$ 900.2 million (FS) IRR: approximately 14% (FS)
Key Investment Considerations Market potential: Supply decits: - Currently, most of fertilizer plants are located in the North, except Phu My plant located in Ba RiaVung Tau; - Mekong Delta, which accounts for approximately 50% of the total consumption of the country, has no fertilizer plant. Competitive advantages Government supports: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Import tariff: Import tax exemption for machineries, equipment, tools and spare parts used to form xed assets; - Exempted from land rental fee; - Access to low interest credit facility offered by Vietnam Development Bank. Ministry of Finance provided loan guarantee; Existing infrastructure/Technology: Enjoy existing infrastructure, facilities, and technology of Ca Mau Gas Power Fertilizer Complex; Stable fuel supply from two main sources: Source 1: Block PM3 CAA, Cai Nuoc mine; Advantageous location: Located near the Mekong Delta - the largest farming area nationwide whilst also being the main gateway for exporting its products to Cambodia. Ca Mau province is located in the central urea consumption area so the plant will benet from lower distribution cost compared to other competitors. Equity ownership offering: 49%
50
Petrovietnam Gas Corporation (PVGas)
Company Overview Establishment: 20 September 1990 Key business activities: Products & Services: Collection, transportation, storage, processing and trading activities related to gas and gas related products; Geographical coverage: - Gas: Cuu Long, Nam Con Son, Malay-Tho Chu basins; Southeast and Southwest regions; and the Song Hong basin (ongoing); - LPG: across the country; - Condensate: Ba Ria - Vung Tau province Target client : - Gas: Power plants, fertilizer factories, industrial customers (plants in industrial zones); - LPG: LPG trading companies (wholesales); industrial, commercial, residential customers (retail); - Condensate: Condensate processing plants; Stock Code: GAS (HOSE) Current ownership: PVN (96.7%), other investors (3.3%) Economic Performance USD Million Total asset Net revenue Prot before tax ROE ROA 2009 1,234 1,592 214 16% 15% 2010 1,442 2,233 290 22% 17% 2011 2,209 3,110 372 27% 14%
Key Investment Highlights Market potential: The demand for gas is expected to continue to rise by 12.1% per year during the period 2011 2020, reaching 24.8 bcm in 2020. Competitive advantages: Government/PVN supports: PVGas has exclusive rights to collect and distribute gas products from the oil and gas elds owned by PVN and its joint ventures; Market share: Dominate the gas supply to power plants. PVGas supplies gas to produce 40% of the countrys electricity production; Competitive positioning: Dominance in LPG market. PVGas is the largest LPG distributor in Vietnam and the only one with up-stream integration; In 2010, PVGass LPG production reached 1 million tons meeting 70% of the nations total demand; Performance prospect: Achieved revenue growth rate of 18 - 20% per year. Equity ownership offering: 21.7% Key Historical Milestones and Strategic Initiatives Historical milestones: 1995: First gas from 1st gas project Cuu Long basin; 2002: First gas from 2nd gas project Nam Con son basin; 2007: First gas from 3rd gas project PM3 block; 2010: IPO; 2011: Ofcially becoming a joint stock company. Major strategic objectives: To intensify gas collection and promote LNG import to meet domestic demand; To invest in national gas pipeline network and connections with regional network; To invest in LPG storage to achieve 70% of LPG wholesale market and develop LPG distribution chain to cover 30% of retail market; To become the leading gas services provider (especially in transportation, maintenance, pipe production and coating, storage); To invest in research and development of new products originated from gas, exploiting and processing technology for high CO2 content gas.
Financial performance, 2011-2015 400 300 USD million 200 100 2011 2012 2013 2014 2015 4,000 3,000 2,000 1,000 -
Profit before tax
Net revenue
51
Petrovietnam Petrochemical & Textile Fiber Joint Stock Company (PVTex)

Company Overview Establishment: 2008 Key business activities: Produce and trade polyester ber, and chemicals, and related services Key customers: large textile and garment producers located across the country including Vinatex group, Phong Phu Corporation, Hanoi Textile Company, and NhaTrang Textile Company; Subsidiaries: PVTex Nam Dinh PVTex Phu Bai PVTex Kinh Bac Current ownership: PVN (56%), PVFCCo (25%), Vinatex (14%), Phong Phu Corp.(5%) Key Historical Milestones and Strategic Initiatives Historical milestones: 3/2008: Co-operation agreement between Vietnam National Oil and Gas Group (PVN) and Vietnam National Textile and Garment Group (Vinatex) which led to the establishment of Petrochemical and Textile Fiber Joint Stock Company (PVTEX JSC); 8/2008: Long-term purchasing contract signed between PVTex and Vinatex; 3-year feedstock supply contracts with Siam Mitsui PTA Co., Ltd (Thailand), Marubeni Corp (Japan), Misubishi Corp (Japan), and Sojitz Corp (Japan); 7/2009: Construction of Dinh Vu polyester ber plant - Vietnams rst polyester plant, total investment capital of 324.85 million USD; 8/2009: Signing credit agreement of US$225 million between PVTex and Bank For Investment And Development of Vietnam (BIDV); 2012: commercial operation at the Dinh Vu plant (exp.) Key Investment Highlights Market potential: Vietnams domestic demand for ber and textile has been growing at 10%-15% per year. At present demand is mainly served by imported materials. Competitive advantages: Strong support from PVN and PVTex for gaining access to foreign markets; Advanced technology and modern equipment: Imported the most advanced technology in the world for Dinh Vu polyester plant. Therefore, the plant can produce various types of PSF and Filament products; Market share: 30% (estimated); Customer base: Large and stable customer base of Vinatex and Phong Phu; Performance prospect: PVTex has the potential to meet 90% of PSF products and 50% Filament products of domestic demand. Equity ownership offering: 20% Economic Performance Million USD Net revenue Prot after tax 2012 227 2 2013 287 12 2014 355 13 2015 355 13 2016 355 14
* Note: Expected operating revenue rst recognized in Q3/2012 when Dinh Vu factory started commercial operation
52
3. Power Industry
Power Industry Overview
Vietnams power market suffers from ongoing electricity shortages. Continued demand increases call for a large scale expansion of the generation capacity in an increasingly liberalized power sector. PVN offers a large number of participation opportunities to foreign investors in this sector. Power Demand Exceeds Supply16
The Vietnamese economy has been growing at a rate of c.7% historically and is forecast to continue its impressive growth in the future. The countrys ongoing industrial transformation and the increasing income per capita have led to a disproportionate growth in electricity demand. The period 2008 2011 witnessed a 14.4% per annum increase of electricity consumption from 62.6 TWh in 2008 to 93.6 TWh in 2011. In the same period the countrys electricity generation capacity increased by only 13.7% per annum.
Vietnam's electricty consumption Net consumption TWh
generation accounts for 73% of generation and includes natural gas generation (44%), coal generation (27%) and oil generation (2%). Hydropower accounts for the remaining 27% of generation capacity and is prone to weather induced uctuations. Grid losses are calculated at 10% of generated power and power users suffer from regular power outages. Shortages are reported to amount up to 7 TWh in 2010. Power imports from China have been marginal at less than 1 TWh per annum and have thus not contributed to an improvement in the situation.
Continued Demand Increases Call Expansion of Generation Capacity
for
Electricity consumption is expected to reach 246 TWh in 2021, which corresponds to a 10.1% average annual growth rate between 2011 and 2021. To meet this demand and restore reserve margins to levels of at least 25-30% of generation capacity needs to be increased from 20 thousand MW in 2011 to over 62 thousand MW by 2020 by constructing thermal, hydro and nuclear power plants.
Total Vietnam's capacityelectricity generation 25 y-o-y growth % 20 15 10 5 2008 2009 2010 2011 2013f 2015f 2017f 2018f 2014f 2016f 2019f 2012f 2020f 2021f 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0
Net consumption per capita KWh
2,000 1,000 2010 2011 2015f 2017f 2008 2009 2016f 2018f 2019f 2014f 2012f 2020f 2021f 2013f
200 100 0
Net consumption TWh
Net consumption per capita KWh

Net capacity MW
Total generation growth y-o-y %

The countrys power generation and grid system is already strained. Its generation resources consist of thermal generation and hydropower plants. Thermal
----------------------------------------------------------------------------------------------------(16) BMI Q4 2011
The expansion program is envisioned to also diversify the sources for power generation. The share of coal generated power is expected to increase strongly to 46%, whereas
Net capacity MW
3,000
300
Chapter 3: Partnership by Sector - Power Industry
53
the shares generated by natural gas and hydropower are forecast to decrease to 29% and 23% respectively. According to the master plan, the share of renewable energy (i.e. wind power, solar power and biomass power) should increase from virtually zero to 4.5% in 2020 and 6% in 2030. The authors of Vietnams power development master plan17 estimate that the total investment required to improve and develop power generation plants and electricity transmission and distribution networks between 2011 and 2030 will be US$ 123.8 billion.
As part of its efforts to implement the liberalization roadmap the MoIT introduced a framework for electricity wholesale prices and Power Purchase Agreements (PPA) in 2011. This measure represents an important step towards a more competitive market. Another move towards privatising the power sector was the issuing of PPP regulations at the beginning of 2011.
Wholesale Competitive Market Retail Market
Generation Competitive Market (Single Buyer)
2005
2009
2014
2016
2022
2024
Liberalisation of the Power Sector should Encourage Investment

Internal Market (Single Buyer)
Generation Competitive Market (Single Buyer) ie.EVN
Retail Competitive Market
Wholesale Competitive Market
Pilot Wholesale Market
The Vietnamese power industry has three main participants. Electricity of Vietnam (EVN) is one of three players operating in electricity generation and holds a monopoly position in transmission and distribution. PVN and Vietnam National Coal and Minerals Industry Group (Vinacomin) represent the remaining two parties operating in the power generation segment. Private investors including both domestic and foreign are playing a growing role in the power generation. Two new foreign invested BOT Power Plants have been licensed in 2011 and a number of other BOT Power Plants with foreign ownership are in the process of negotiation. The EVNs share in the power generation has reduced gradually and accounts for only 53% in 2011.
Contribution to electricity output in 2011
Pilot Retail Market
Preparing for Single Buyer Market
Preparing for Wholesale Market
Preparing for Retail Market
Decision by Prime Minister for the roadmap of Vietnam electricity development
5% 1% 10% EVN PVN 14% Vinacomin Domestic private sector Foreign investors 5% 12%
Source: PVN marker research
53%
Import Others
Further to these developments the MoIT agreed to increase the retail price by 7% in March 2011. Electricity prices now stand at 5.54 US cent/kWh. While the governments ongoing efforts to control ination make further immediate price increases unlikely, market participants expect further retail price increases in the near future. On the input price side the Government has established a favourable tax policy which brings advantages to power operators. Power producers could be entitled to highest corporate income tax incentives, favourable land rental, and import duty exemption on certain goods. Import duty on coal is now reduced to 0%. Other nancial and nonnancial supports are also available.
To support Vietnams transition to a market economy and to encourage investment the government assigned the Ministry of Industry and Trade (MoIT) to implement a three stage scheme to liberalise the power market from 2005 to 2024: Stage 1 from 2005-2014: Establish a competitive power generation market and eliminate subsidies Stage 2 from 2015-2022: Establish a competitive wholesale market Stage 3 from 2022 onwards: Establish a competitive retail market
----------------------------------------------------------------------------------------------------(17) Vietnams power development master plan (2011 2030)
54
PVN Offers Attractive Opportunities to Participate in the Power Sector

PVN strives to cement its position as the number 2 power generation company after EVN with the aim to achieve a market share of 20% in the power production by 2015. By the end of 2011, PVN has ve power projects which supply 13.1 billion KWh to the national grid, and accounts for approximately 14% of the total countrys power production. To achieve the goal of producing 20% of the countrys electricity output by 2015, PVN will focus on: Gas power projects using its existing and new gas elds; Coal-red power plants using imported coals. Pvn also considers acquiring offshore coal mine to secure the coal supply for its power projects; Protable hydro-power plants; Wind power and renewable energy projects
Projected power generation by PVN 2015-2030 (MW/annum) 12000 10000 8000 6000 4000 2000 0 2015 2020 2025 2030
Source: PVN market research
Gas Coal - fired Hydro and renewable
PVN invites foreign investors to jointly participate in Vietnams power sectors growth. In total 09 projects are available for foreign participation (see table below)
Partnership with PVN in Power Industry

Planning Stage Song Hau 1 Coal-fired Power Plant License stage Construction stage Operational stage
Hoa Thang 1 Wind Power Plant
Thai Binh 2 Coal-fired Power Plant
Vung Ang 1 Coal-fired Power Plant
Quang Trach 1 Coal-fired Power Plant
Long Phu 1 Coal-fired Power Plant
DakDrinh Hydro Power Plant
Hua Na Hydro Power Plant
Nhon Trach 1 Thermal Power Plant
The opportunities are described in detail on the following pages.
55
Petrovietnam Power Projects Map
Thai Binh 2 Power Plant Owner: PVN
Hua Na Hydro Power Plant Owner: PV Power Vung Ang 1 Power Plant Owner: PVN
Quang Trach 1 Power Plant Owner: PVN
Dak Drink Hydro Power Plant Owner: PVN
Hoa Thang Wind Power Plant Owner: PVN Nhon Trach 1 Thermal Power Plant Owner: PV Power Long Phu 1 Power Plant Owner: PVN Song Hau 1 Power Plant Owner: PVN
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Song Hau 1 Coal-red Power Plant
Project Overview Key business activities: power generation Location: Phu Huu A commune, Chau Thanh district, Hau Giang province Capacity: 1200 MW (2 units of 600 MW) Total area: 115,2 ha Main parameters: Rated unit output (raw): 600 MW (RO); Unit conguration: 1 supercritical boiler, 1 turbine, 1 generator; Maximum average operation hours: 6,500 hours/ year; Auxiliary power rate: 6.4%; Total coal consumption: 3.2 million tons/ year ; Total oil consumption: ~6,000 tons/ year (2 units); Main fuel: Coal imported from Indonesia/ Australia, having low heating value of around 5,725 Kcal/ Kg and ash content of around 15%; Secondary fuel: oil No.2B (Vietnams standard 62392002). Technology: Conventional technology combined with advanced combustion technology (low NOx). Project life and PPA: 30 years Current ownership: PVN (100%) Current Status & Schedule Schedule: COD Unit 1: June 2017 COD Unit 2: Dec 2018 Completed works: Site clearance Water and electric for construction FS On-going works: FEED
Key Investment Considerations Fuel supply agreement: Signed Coal Off - take Framework Agreement (COFA). Competitive advantages: Government support: - The Ministry of Finance is expected to provide guarantee for foreign loans for PVNs participating interest; - Tax incentives: Expected to be entitled to highest tax incentives applicable to special encouraged projects including: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Tax exemption on sales of CERs; + Import duty exemption for construction materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets; - Low land-clearance costs; - Reduced land rental. Advantageous location: Easy access to port and national road; Equity ownership offering: 49% Economic Performance Investment Capital: US$ 1,633 million Financing source: PVN, ECAs, commercial loans NPV: US$ 250 million (FS) IRR: 12% (FS) Payback period: 16 years (FS)
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Hoa Thang 1 Wind Power Project
Project Overview Key business activity: Wind power generation Location: Hoa Thang commune, Bac Binh district, Binh Thuan province Capacity: 49.5 MW (33 units of 1.5 MW) Total area: 18 ha Main parameters: Expected production: 121,818.6 MWh/year; Capacity factor: 28.1%; Total coal consumption: 3 3.5 million tons/year; Implementation works include Turbine with tower of approximately 82.9 meter height; Internal 22 KV network; 2 step-up substation: 22/110 KV; 110 KV transmission line connecting the 22/110 KV step-up substation with EVNs grid; Transportation road for construction and operation; Operation house. Project life and PPA: 20 years Current ownership: PVPower (100%) Current Status & Schedule Schedule: FS approval: 2012 EPC contract: 2013 COD: Q4 2013 Completed works: Pre-FS establishment On-going works: Geologic, geographical investigation FS development
Key Investment Considerations Competitive advantages: Government support: - Entitled to the benets stipulated in Decision No. 37/2011/QD-TTg of the Prime Minister regarding support in mechanisms for wind power projects in Vietnam. The entire electrical output is prioritized to be transmitted to the grid; - Tax incentives: Expected to be entitled to highest tax incentives applicable to special encouraged projects including: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years + Tax exemption on sales of CERs; + Import duty exemption for construction materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets; - Low land-clearance costs; - Reduced land rental. Advantageous location: Suitable location for wind power generation. The plant is located in the coastal area where wind velocity is 6-8 m/s; Access to low cost credit: The project might be able to receive ECA loans or other loans at low interest rate available to renewable energy project. Equity ownership offering: 49% Economic Performance Investment capital: US$ 83 million Financing source: PVN, ECAs, commercial loans IRR: 10% (pre-FS) Payback period: 17 years (pre-FS)
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Thai Binh 2 Coal-red Power Plant
Project Overview Key business activities: Power generation Location: My Loc commune, Thai Thuy district, Thai Binh province Capacity: 1,200 MW (2 units of 600 MW) Total area: 254.22 ha Main parameters: Unit conguration: 1 sub-critical boiler, 1 turbine, 1 generator; Tmax: 6,500h; Grid connection: Via 220kV switchyard to the National Grid; Main transformer: 220/21 kV, 3 phase, 750 MVA; Total coal consumption coal: Around 3 million tons/ year, heating value of around 5,300 Kcal/Kg and ash content of 25% - 30%; Total oil consumption: Around 10,800 tons/year. Technology: Sub-critical technology combined with advanced combustion technology (low NOx) Project life and PPA: 30 years Current ownership: PVN (100%)
Key Investment Considerations Fuel supply agreement: Local coal supplied by Vinacomin Competitive advantages: Government support: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Tax exemption on sales of CERs; + Import duty exemption; - Low land - clearance cost; - Reduced land rental and land-use fee; - Other incentives applicable for special encouraged projects; Advantageous location: Good access to port and national road. Equity ownership offering: 49% Economic Performance
Current Status & Schedule Investment license: No. 08121000230 issued on 12/01/2012 by Thai Binh Provincial Peoples Committee Schedule: COD Unit 1: September 2015 COD Unit 2: March 2016 Completed works: FEED Site clearance EPC contractor selection Main equipment supply contractor selection On-going works: Coal supply/coal handling agreement nalization Construction PPA in negotiation with EVN
Investment capital: US$ 1,656 million Financing source: PVN, ECA source (up to 85% of the value of the foreign portion under the EPC Contract) and commercial loan NPV: US$ 301.8 million (FS) IRR: 12% (FS) Payback period: 16 years (FS)
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Vung Ang 1 Coal-red Power Plant
Project Overview Key business activities: Power generation Location: Ky Loi commune, Ky Anh district, Ha Tinh province Capacity: 1,200 MW (2 units of 600 MW) Total area: 183 ha Main parameters: Rated output of unit (raw): 600MW(RO); Unit conguration: 1 sub-critical boiler, 1 turbine, 1 generator; Maximum average operation hours: 6,500 hour/ year; Auxiliary power rate: 7.8 %; Total coal consumption: 3.2 million tons/year, heating value of around 5,050 Kcal/Kg and ash content of 25%; Main fuel: Domestic coal (No 5, Vietnams standard); Secondary fuel: The plant secondary fuel during start-up and support ring will be fuel oil. Technology: Sub-critical technology Project life and PPA: 30 years Current ownership: PVN (100%) Current Status & Schedule Investment license: No. 28221000009 rst issued on 12/2/2008, amended on 2/4/2010 by management board of Vung Ang Economic Zone, Ha Tinh Province; Schedule: PAC Unit 1: 6/2013; PAC Unit 2: 12/2013; Completed works: FS, FEED and cost estimate Site clearance for main plant area Water and electricity for construction On-going works: Coal supply/coal handling agreement nalization Construction PPA in negotiation with EVN
Key Investment Considerations Fuel supply agreement: Local coal supplied by Vinacomin; Competitive advantages: Government support: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Personal Income tax: 50% reduction + Import duty exemption for raw materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets; + Tax exemption on sales of CER; - Land-use fee, site clearance, human resources training and advertisement cost; - 100% loan guarantee. Equity ownership offering: 49% Economic Performance Investment capital: US$ 1,595 million Financing source: PVN, ECAs, commercial loans NPV: US$ 116.72 million (FS) IRR: 12% (FS) Payback period: 14 years (FS)
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Quang Trach 1 Coal-red Power Plant
Project Overview Key business: Power generation Location: Quang Dong commune, Quang Trach district, Quang Binh province Capacity: 1,200 MW (2 units of 600 MW) Total area: 344 ha Main parameters: Rated output of unit (net): 600 MW; Unit conguration: 1 super-critical boiler, 1 turbine, 1 generator; Maximum operation hours: 6,500 hours/ year Auxiliary power rate 7.8%; Total coal consumption: 3.1 million tons/ year, heating value of around 5,900 Kcal/Kg and ash content of 11%; Main fuel: imported coal from Australia or Indonesia Secondary fuel during start-up and support ring will be fuel oil - Total DO consumption: ~ 4,218 tons/ year Technology: Super critical technology Project life and PPA: 30 years Current ownership: PVN (100%) Current Status & Schedule Investment license: No. 29221000021 issued on 06/04/2011 by management board of Quang Binh Economic Zone, Quang Binh Province Schedule: COD Unit 1: Jan 2016 COD Unit 2: June 2016 Completed works: FS, FEED & cost estimate Land clearance and settlement for main plant area On-going works: EPC contract
Key Investment Considerations Fuel supply agreement: Signed Coal Off - take Framework Agreement (COFA) Competitive advantages: Government support: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Tax exemption on sales of CERs; + Personal income tax: 50% reduction; + Import duty exemption for raw materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets; - Other incentives provided by Quang Binh province; Advanced technology: Super critical technology combined with advantaged combustion technology (low SOx), ESP, FGD equipments, this project will not only meet environmental requirements but also reduce electricity price. Equity ownership offering: 49% Economic Performance Investment Capital: US$ 1,778 million Financing source: PVN, ECAs, commercial loans NPV: US$ 246 million (FS) IRR: 12% (FS) Payback period: 13 years (FS)
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Long Phu 1 Coal-red Power Plant
Project Overview Key business activities: Power generation Location: Long Duc commune, Long Phu district, Soc Trang province, Vietnam Capacity: 1200 MW (2 units of 600 MW) Total area: 115,2 ha Main parameters: Rated output of unit (raw): 600 MW (RO); Unit conguration: 1 supercritical boiler & 1 turbine & 1 generator; Total coal consumption: 3.2 million tons/ year; Main fuel: Coal imported from Indonesia/ Australia, having low heating value of around 5,725 Kcal/ Kg and ash content of around 15% (max) Secondary fuel during start-up and support ring load of < 40% rated load will be fuel oil. Technology: Conventional technology combined with advanced combustion technology (low NOx) Project life and PPA: 30 years Current ownership: PVN (100%) Current Status & Schedule Investment license: No. 59121000059 issued on 08/05/2009 by Soc Trang Provincial Peoples Committee; Schedule: COD Unit 1: 2015 COD Unit 2: 2016 Completed works: FS, FEED & cost estimate Land clearance and settlement for main plant area On-going works: EPC contract
Key Investment Considerations Fuel supply agreement: Signed Coal Off - take Framework Agreement (COFA). Competitive advantages: Government support: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Tax exemption on sales of CERs; + Import duty exemption for raw materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets. - Low land clearance cost; - Expected to obtain guaranteed overseas nancing loans for Petrovietnams participating interest by the Ministry of Finance; Advantageous location: Coal, oil, limestone, equipment and materials for project during construction could be transported without difculties. Equity ownership offering: 49% Economic Performance Investment capital: US$ 1,595 million Financing source: PVN, ECAs, commercial loans NPV: US$ 175.9 million (FS) IRR: 12% (FS) Payback period: 15 years (FS)
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DakDrinh Hydro Power Plant
Project Overview Key business activities: Power generation Location: Located 70 km from Quang Ngai city, on catchment area of the Dakdrinh River Capacity: 125 MW (2 units) Capability: Annual production: 540,246 million KWh Main parameters: Total area: 2,293 ha; Tunnel: 10,325 km; Average ow per year: 31.89 m3/s; Total discharge ow per year: 1,005.7 x 106 m3; Total volume: 248.51 x 106 m3; Useful volume : 205.18 x 106 m3; Technology: In conformity with Vietnamese and American designing standards Project life and PPA: 40 years Current ownership: PV Power (93.32%), BIDV (2.8%), Licogi (1.48%), SongDa Group (1.4%), DHCs employees (1%)t Current Status & Schedule Investment license: No. 34121000029 issued on 25/6/2008 by Quang Ngai Provincial Peoples Committee Schedule: Commencement: April 2009 COD of Unit 1: Q3 2013 COD of Unit 2: Q4 2013 Completed works: Site clearance and settlement (factory area, dam area, water supply tunnel area, etc.) On-going works: Site clearance (catchment area) Construction of main work items of plants PPA in negotiation with EVN
Key Investment Considerations Competitive advantages: Government support: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation; Exemption for 4 years from the rst year of making prots; 50% reduction for the following 9 years; + Import duty exemption for raw materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets; - Reduced land rental. Favourable topology: 15-20 metre wide channel with slope of 25%; Advantageous location: Located in region with geological stability, favourable for building the dam and other structures of the power system; Access to nance: Guaranteed loans by NEXI organizations (Japan) at a low interest rate. Equity ownership offering: 42.32% Economic Performance Investment capital: US$238 million Financing source: PVPower, BIDV, Licogi, SongDa Group, DHCs employees, Credit Agricole, NEXI NPV: US$ 23 million (FS) IRR: 11.68% (FS) Payback period: 12 years (FS)
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Hua Na Hydro Power Plant
Project Overview Key business activities: Power generation Location: Dong Van commune, Que Phong district, Nghe An province Capacity: 180 MW (2 units x 90 MW) Capability: Annual production: 717.6 million KWh per year Main parameters: Total area: 2,412 ha; Catchment area: 5,345 km2; Mean ow: 94.63 m3/s; Full supply level: 240 m; Minimum operating level: 215 m; Gross storage: 569.35 million m3; Active storage: 390.99 million m3; Dead storage: 178.36 million m3; Surface area at full supply level: 21.3 km2. Project life and PPA: 40 years Current ownership: PV Power (82.2%); Lilama, BIDV, and MB (17.8%) Current Status & Schedule Investment license: No. 271110000013 issued on 26/3/2008 by Nghe An Provincial Peoples Committee Schedule: Project commencement: Mar 2008 River damping: Jan 2010 COD unit 1 & 2: Q4 2012 Completed works: PPA for the 1st year was signed and served as the framework for a long- term PPA On-going works: Site clearance Construction of main work items of plants PPA in negotiation with EVN
Key Investment Considerations Competitive advantages: Government support: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation: Exemption for 4 years from rst year of making prots; 50% reduction for the following 9 years; + Import duty exemption for construction materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets; - Reduced land rental; - The project is given priority to feed 100% of produced power into the national grid. Project nancing: Loans from BIDV with favorable rate. Equity ownership offering: 31.2% Economic Performance Investment capital: US$ 288 million Financing source: PV Power HHCs equity (USD 97 million), VDB (USD 128 million), commercial loans (USD 35 million) NPV: US$ 26 million (FS) IRR: 9.69% (FS) Payback period: 23 years (FS)
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Nhon Trach 1 Thermal Power Plant
Project Overview Key business activities: Power generation Location: Phuoc Khanh commune, Nhon Trach district, Dong Nai province Capacity: 450 MW Facilities: 2 gas turbines and steam turbines Total investment: US$ 322 million Project life and PPA: 25 years Current ownership: PV Power (100%) na Financial Performance Financial Performance USD million Revenue Gross prot Prot before tax Prot after tax 2009 50.0 -2.5 -5.6 -5.6 2010 147.4 10.4 4.6 4.6
Key Investment Considerations PPA signed with EVN Fuel supply agreement: Long-term contract with PV Gas (until 2031) Competitive advantages: Government support: - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation: Exemption for 4 years from rst year of making prots; 50% reduction for the following 9 years; + Tax exemption on sales of CERs. + Import duty exemption for construction materials, machineries, equipment, tools and spare parts which cannot be produced locally to form xed assets. Good location and well - developed infrastructure: Established in Dong Nai - the most dynamic developing Southeast Province; Equity ownership offering: 49% Key Historical Milestones
Forecast for 2012 2015 USD million Revenue Prot before tax Electricity output (billion) KWh) 2012 128.9 9.4 2.5 2013 154.7 13.6 3.1 2014 151.7 13.3 3.1 2015 118.9 8.6 2.5
26/03/2007: Started construction of Nhon Trach 1 05/2008: First turbine GT11 came into operation 07/2008: The turbine GT12 came into operation 04/2009: The turbine ST18 came into operation 08/2009: Commercial operation date
Chapter 3: Partnership by Sector - Services
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4. Services
Partnership with PVN in Services
Planning Stage License stage Construction stage Operational stage
Phuoc An Port
Dung Quat Shipyard
Petrovietnam Construction Joint Stock Company (PVC)
Petrovietnam Tower
Petrovietnam Finance Corporation (PVFC) Petrovietnam Transportation Corporation (PVTrans) Petrovietnam Oil Stockpile Company Limited (PVOS)
----------------------------------------------------------------------------------------------------(20) Vietnam GSO (21) The Organisational structure of Dong Nai industry promotion centre (www.khuyencongdongnai.org.vn)
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Petrovietnam Service Projects Map

Petrovietnam Tower Owner: PVC Petrovietnam Construction Joint Stock Company (PVC) Owner: PVN, VanEck Association Corp., Vietwealth Corp., others Petrovietnam Finance Corporation (PVFC) Owner: PVN, Morgan Stanley, others
Dung Quat Shipyard Owner: PVN
Phuoc An Port Owners: PVN, Sonadezi Corp., others Petrovietnam Oil Stockpile Company Limited (PVOS) Owner: PVOil, Binh Son Petrochemical Company Ltd. (BSR), SEK Petrovietnam Transportation Corporation (PVTrans) Owner: PVN, PVFC, ACB, others
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Seaport
The Phuoc An Port project, located in Dong Nai province, is a deep-water international port with a total capacity of 2.5 Million teus/ year or 6.5 Million tons/year. The port will mainly handle goods exports and imports for the industrial zones in the province. Sea Trade Growth has Led to Over Utilisation of Ports
Vietnams total trade value stood at US$ 191 billion in 2011 and is expected to increase by 16% per annum between 2011 and 201618, reaching US$ 402 billion in 2016. Sea trade cargo throughput and container throughput in the 54 ports which are members of the Vietnam Seaports Association reached 172 million tons and 5.4 million TEUs in 2009 respectively. Meanwhile, average annual growth in the period from 2000-2009 was 16% for cargo and 20% for containers (see chart below). This strong growth in trade volume has led to the over - utilisation of many ports, as the port infrastructure could not be expanded at the same pace. Overutilization is most pronounced around the countrys economic hubs such as Ho Chi Minh City. Its biggest port, Saigon New Port, witnessed increases in general cargo throughput of 24% and container throughput of 22% in the period from 2000 to 200919
Vietnam's sea trade volume* 200 Cargo throughput (million tons) 150 100 50 2 6 4 Container throughput (thousand TEUs)
by 2030. The Government needs total investment of VND 360 440 trillion (US$ 19 23 billion) to develop its sea port infrastructure between 2010 and 2020. The countrys strategy is focused on developing deep-water seaports that meet international standards. One of the main investment methods on which the Government is focusing is Public Private Partnerships (PPP), especially for large scale seaport projects, which will attract foreign investors and encourage them to provide nancing.
Industrial Activities Make Dong Nai Province an Attractive Port Location

Dong Nai province, one of the main target markets for Phuoc An Port, is located in Southeast Vietnam. Dong Nai is an industrial province which has seen heavy investment from domestic and foreign investors in shipping and manufacturing. The province achieved nearly US$ 4 billion nominal GDP in 2010 or 4% of Vietnams GDP and grew by 21% per annum during the period of 2007 2010. Its gross industrial output was over US$ 13 billion in 2009, representing an increase of 22.7% per annum between 2005 and 200920. Currently, Dong Nai has more than 30 industrial parks with over 1,200 companies. One of the biggest industrial zones is Nhon Trach Concentrated Industrial Park which covers a total area of 3,340 ha. The provinces volume of
----------------------------------------------------------------------------------------------------(18) BMI Shipping report, Q1 2012 (19) Vietnam Seaports Association
The country plans to develop a seaport system that can handle a total cargo volume throughput of 500 600 million tons per year by 2015, 900 1,100 million tons per year by 2020 and up to 2,100 million tons per year
20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09
Container throughout (TEUs) Cargo throughput ('000 Tons)
Source: Vietnam Seaports Association (VPA) (*)Note: This data is of 54 port members of VPA only
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export and import container and general cargo in 2010 was approximately 31.75 million tons while that of Nhon Trach industrial park itself in 2010 was 11.72 million tons, representing 37% of total Dong Nais volume. At this time, there are only three ports operating on the Dong Nai River: Dong Nai general cargo port, which can handle 5,000 DWT ships, and SCT Gas and VT Gas specialised ports, which can handle 1,000 DWT ships only. These ports with a total capacity of over 600,000 tons per year21 can only support a minor part of Dong Nais trade volume. The remaining cargo volume of over 31 million tons for Dong Nai province and over 11 million tons for Nhon Trach is shipped to different provinces by truck or container or by ship through other ports in Ho Chi Minh City and other provinces, which is costly and time consuming.
The Phuoc An Port project is planned to become one of the biggest ports in Vietnam able to handle vessels up to 60,000 tons and provide a cargo capacity of 2.4 million tons per year in Phase 1. However, Phuoc An Ports capacity in Phase 1 will only support 8% of Dong Nais total trade volume and 20% of Nhon Trach Industrial Parks trade volume. Consequently, there is huge potential for increasing support of the provinces trade volume by expanding the ports capacity in the future.
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Phuoc An Port Project (PAP)
Project Overview Key business activities: Build and operate a deep water seaport Location: On the right bank of Thi Vai river in Phuoc An commune, Nhon Trach district, Dong Nai province Capabilities: This port is designed to handle up to 60,000 DWT vessels Capacity: 2.5 million TEUs/year or 6.5 million tons/ year Technology: Modern, high-tech design, equipment and operating model Facilities: Total port area: 183 ha; Total berth area: 3,050 metres with 6 container and 4 general cargo berths (60,000 DWT/ berth); Water depth: 15 m; Logistics zone: 5 km away from the port with a total area of 555 ha, including warehouses, oil and gas service area, railway station, repair facility, container yard, liquid storage area, etc. Project life: 50 years Current ownership: PVN (80%), Sonadezi Corp. (15%), other investors (5%) a Current Status & Schedule Investment license: No. 47121000233 (For 5 phases) Completed works: Detailed planning for construction Report for environmental impact assessment Handover of port land and part of logistics zone land FS and basic design On-going works: Handover of the remaining land Phase 1 detailed design Phase 1 construction Project period: 2010 2020 Phase 1 construction: 2012 2014
Key Investment Considerations Market potential: Huge cargo volume. The cargo volume of companies located in Nhon Trach Industrial Park was about 11 million tons in 2010; and expected a strong growth. Fuel supply agreement: Long-term contract with PV Gas (until 2031) Competitive advantages: Government support: - PAP is an important project and therefore received good nancial and non-nancial supports from the Government and Dong Nai province; - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation: Exemption for 4 years from rst year of making prots; 50% reduction for the following 9 years; + Import tax: Exempt for the rst 5 years. Huge land area: Land area is about 800 ha of which the logistic zone is 555 ha larger than other ports in Thi Vai area; Good location: The port is nearby many important and large industrial parks of Dong Nai and is expected to meet their increasing demand; Convenient connection: Advantage of completed and synchronous trafc system with connecting to industrial zones in Dong Nai, Binh Duong, and Ho Chi Minh city, Mekong Delta through national road 51; HCM-Long Thanh-Dau Giay highway, Ben LucLong Thanh highway. The only project has a railway through the logistic zone and connects with nation railway. The distance from 0 buoy to PAP is only 40 km, in comparison to 90 km of Saigon port. Equity ownership offering: 49% Key Historical Milestones Investment capital: US$ 979 million for 5 phases as follow: Phase 1: US$ 100 million Phase 2: US$ 234 million Phase 3: US$ 191 million Phase 4: US$ 227 million Phase 5: US$ 177 million NPV: US$ 119 million (FS, for 5 phases) IRR: 19% (FS, for 5 phases) Payback period: 18 years (FS, for 5 phases)
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Shipyard
Dung Quat Shipyard, located in Quang Ngai province in central Vietnam, is one of the biggest shipyards in Vietnam and is capable of building ships of up to 300,000 DWT. High Demand for New Ships and Repair Services
Vietnams shipbuilding industry ranked fth in the world and accounted for 0.9% of the worlds market share in 2010, compared with 0.4% in 200422. The countrys shipbuilding production achieved an output increase of 25% per annum between 2004 and 2010, receiving 252 new shipbuilding orders with gross tonnage of 2.5 million tons in 2010. It is estimated that more than 800 new ships with total tonnage of over 4 million tons will be needed by 2015 and 1,100 ships with total tonnage of almost 4 million tons will be needed by 2020 to replace old vessels and expand Vietnams eet. With respect to ship types crude oil tankers, oil tankers, container ships, general cargo ships and vessels are required. The country will also require on average 609 repairing turns per year by 2015 and 699 repairing turns per year by 2020 for domestic eet. In 2010, Vietnam had 120 shipyards that were able to build and repair ships of over 1,000 DWT. Only four shipyards can repair ships of over 6,500 tons and build ships of 300,000 DWT and over. Dung Quat Shipyard is one of the biggest shipyards in Vietnam and can build ships up to 300,000 DWT and repair large vessels up to 50,000 DWT and oil tankers up to 150,000 DWT. Its annual shipbuilding capacity is 1.1 million D WT. Vietnams shipyards full around 46% of the total domestic repair demand. In 2010, costs of about US$ 75 million were incurred from transferring domestic ships abroad for repair, as the Vietnamese shipyard capacity and capability was insufcient to meet domestic demand. central Vietnam as it was ranked the 18th post in the Vietnam Provincial Competitiveness Index Report 2011, signicantly higher than the 34th Position of Khanh Hoa. From the point of view of investors, Quang Ngai is more competitive in terms of legal institutions, market entry costs, access to land, transparency and access to information, time costs of regulatory compliance and informal charges in comparison with Khanh Hoa, making it an area that has high potential to develop in the future.
Provincial competitiveness, 2011
Labour training Business support service Proactivity of provincial leadership Legal institutions Market entry cost
Informal charges Time costs of regulatory compliance
Access to land Quang Ngai Khanh Hoa
Transparency and access to information
Source: The Vietnam PCI 2011
Based on growing demand Dung Quat Shipyard plans to expand its operations. In addition to that the company is working on turn around measures to improve its protability.
Quang Ngai as a Competitive Location

Vietnams shipbuilding master plan identied four shipyards that will be prioritised for development in the central region. Three of them are located in Khanh Hoa province, and Dung Quat Shipyard alone is located in Quang Ngai province. Quang Ngai is known as one of the most attractive investment environments in
----------------------------------------------------------------------------------------------------(22) The shipbuilders Association of Japan report
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Dung Quat Shipyard (DQS)
Project Overview Key business activities: Ship building and repairing, offshore rigs and oating equipment Location: Tan Hy commune, Binh Son district, Quang Ngai province Capabilities: DQS is capable of building ships up to 300,000 DWT Facilities: Total DQS area: 118 ha; Manufacturing workshop area: 40,000 m; Pipe workshop area: 10,000 m; Assembling workshop area: 16,500 m; Mechanical workshop area: 4,000 m; Area of stock yard: in use Dry dock No.1 (308 x 86 x 14 m) and under construction Dry dock No.2 (520 x 110 x 14 m). Current ownership: Dung Quat Shipbuilding Industry Company Limited being 100% owned by PVN (100%) Current Status & Schedule Investment license: No. 4300338693, issued by Dung Quat Economic Zone Authority of Quang Ngai province Project Schedule: Stage 1: Calling for investment of US$ 54 million for the capacity expansion of stage 1 Stage 2: 2015 2020 calling for investment of US$ 471 million
Key Investment Considerations Market potential: The countrys shipbuilding production achieved an output increase of 25% per annum between 2004 and 2010. It is estimated that more than 800 new ships with total tonnage of over 4 million tons will be needed by 2015 and 1,100 ships with total tonnage of almost 4 million tons will be needed by 2020 to replace old vessels and expand Vietnams eet; Vietnams shipyards fulll around 46% of the total domestic repair demand. The country will require on average 609 repairing turns per year by 2015 and 699 repairing turns per year by 2020 for domestic eet. Competitive advantages: Government support: - Enjoy various other nancial and non nancial incentives granted by the government for national priority projects as well as strong support from Quang Ngai Peoples Committee; - Tax incentives: + CIT: 10% for rst 15 years from commencement of operation: Exemption for 4 years from rst year of making prots; 50% reduction for the following 9 years; + Import duty exemption for construction materials, machineries, equipment, tools and spare parts to form xed assets; - Exemption from land rental from 2003-2018. Advantageous location: DQS is located in a deepwater multi-functional port and can repair cargo ships of up to 50,000 DWT and oil tankers of 150,000 DWT; build ships up to 105,000 DWT. Equity ownership offering: 49%
Economic Performance Total investment capital: US$ 749.15 million NPV for stage 1 expansion: US$ 7.79 million (FS) Payback period stage 1: 16 years and 10 months
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Construction
Petrovietnam Construction Joint Stock Corporation (PVC), is striving to become a full service construction and investment group, a leader in vietnams construction industry by 2015. Besides its traditional projects in the petroleum industry it has expanded into the residential, commercial industrial and infrastructure construction sectors . The Construction Market is Booming at Double-Digit Growth Rates
The overall construction market has been booming in Vietnam. The market is split into residential, commercial and industrial sector as well as the infrastructure sector. The residential, commercial and industrial construction sector has increased rapidly by nearly 13% every year between 2008 and 2011. It is expected to grow by 17% per annum over the next 10 years, from US$ 4.6 billion in 2011 to US$ 21.5 billion in 202123.
Vietnam's residential, industrial and commercial construction value* (US$ billion) 25 20 15 10 5 -
parks to enlarge the available area by 32,000 ha by 2015. In the infrastructure sector PVN has its main activities in the power plant and pipeline sector. As outlined in the Power industry overview, Vietnam faces a shortage of electricity and will embark on an ambitious power plant construction programme. The construction value in the power sector increased by 4% in 2008 2011 and it is expected to grow at a higher rate of 14% between 2011 and 2016. Oil and gas pipelines have developed recently and only accounted for a minimal share 0.4% of Vietnams total construction value in 2011. However with the envisioned growth in the gas sector new pipelines will be built. As the average value of pipeline construction contracts in Vietnam is estimated at USD 1 billion every new pipeline project offers a signicant revenue potential.
Vietnam's power plant construction value (US$ billion) 2.0 1.5 1.0 0.5 0.0 2008 2009 2010 2011 2012f 2013f 2014f 2015f 2016f
PVC is the Second Largest Player in the Industry with the Strongest Revenue Growth
The top 10 construction companies accounted for approximately 29% of the construction market in 2010. After state-owned Group construction company Vinaconex with a 10.7% market share, PVC is the second largest player with a 5.2% market share. Coteccons Group appears to be the largest local private construction company having a 2.4% share of the construction industry in 2010. PVC strong performance is not only reected in its market share but also in its strong revenue growth. With a growth rate of 144% PVC achieved the fastest growth in the industry between 2008 and 2010. Besides professional work, PVC major strength is its links to the PVN group, which gives it priority access to the groups construction projects. Moreover the government link helps in dealing with local authorities. Among those projects, PVC has executed 287 construction
Vietnams economic growth, rising income, large population and rapid urbanisation drive the demand for housing and commercial construction projects. According to the governments housing development master plan, Vietnam will need an additional residential area of one billion m2 by 2020 to satisfy demand, making this a highly attractive sector. CBRE Vietnam identied nearly 2,000 residential and commercial projects were planned and scheduled to be nished over the next 10 years in big cities such as Ho Chi Minh, Hanoi, Da Nang, Can Tho, Nha Trang, Hai Phong, and Vung Tau. In the industrial sector the government plans to establish 115 new industrial parks and expand 27 existing industrial
----------------------------------------------------------------------------------------------------(23) Source: BMI, Q1 2012 (*) Note: Vietnams real estate value includes residential (housing, residential areas), industrial (industrial parks, factories) and commercial (ofce buildings, hotels, hospitals) construction
20 08 20 09 20 10 20 1 20 1 12 f 20 13 f 20 14 f 20 15 f 20 16 f 20 17 f 20 18 20 f 19 20 f 20 20 f 21 f
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projects in which residential and commercial projects contribute 14% in value term, power 62%, infrastructure and industrial 8%, petroleum 16%. The corporation is accounted for 17% shares of total power construction market. In the oil& gas sector the company has grown from being a subcontractor at rst to become a major EPC contractor that can execute large scale project with complicated technical requirement. These skills are exemplied by an impressive track record for projects such by selected projects such as oil and gas transporting and storage system for Vung Ang Thermal Power Plant, General Ashore Service in Vung Tau district, Petro pipeline from Long Hai to Phu My industrial zone, Dung Quat renery.
74
Petrovietnam Construction Joint Stock Corporation (PVC)
Company Overview Key business activities: Petroleum specialized construction Power plant construction Industrial construction Civil construction Key construction projects implemented: Power plants: Nhon Trach 2 Power Plant, Vung Ang 1 Thermal Power Plant, Bio Ethanol Energy Plant Industrial project: Dinh Vu Polyester Plant in Hai Phong Commercial projects: Vietnam Petroleum Institute, Ofce of Ministry of Interiors and Ministry of Natural Resources and Environment Stock Code: PVX (HNX) Current ownership: PVN (53.26%), VanEck Association Corp. (4%), Vietwealth Corp. (2%), other investors (40.74%) Key Historical Milestones and Strategic Initiatives Historical milestones: 1983: Established as Oil and Gas Construction Conjugate Factory. 2009: Equitized and offer shares to public and become Petrovietnam Construction Joint Stock Company (PVC) 2012: Increase charter capital to 5,000 billion (app. USD 242 million) Major strategic initiatives: PVC has expanded to industrial production, mechanical engineering and real estate with some signicant projects such as Tien Giang oil and gas industrial park, Petroleum steel pipe production project, Tan Vien eco-tourism zone, etc.
Key Investment Highlights Market potential: Double digit market growth. The residential, commercial and industrial construction and the power plant sectors are forecast to grow at 17% (2011-2021) and 14% (2011-2015) respectively. The build-up of the domestic petroleum industry offers several large project opportunities in excess of USD 1 billion. Competitive advantages: Strong connection with Government and PVN: Has privileged access to projects of the Government and PVN; Strong competitive positioning: PVC is the second largest player in the overall construction market and the biggest construction company specialized in oil and gas industry, with a strong track record; Customer base: Serving not only PVN entities but also other companies Performance prospect: Due to the expansion of EPC activities, the revenue growth rate of PVC is expected to increase by 20% per year up to 2015. Equity ownership offering: 17% Economic Performance Financial Performance USD million Chartered capital Prot before tax Prot after tax ROE ROA 2009 84.3 15.6 12.9 13% 4.05% 2010 130.7 49.3 38.8 25% 5.94% 2011 121.1 18.4 14.5 10% 1.77%
Financial forecast 2012 - 2015 USD million Chartered capital Turnover Prot before tax 2012 234.4 586.1 59.0 2013 272.2 680.6 68.5 2014 355.8 800.5 80.6 2015 432.4 934.0 94.0
75
Petrovietnam Tower
Project Overview Key business activities: Operating a complex consisting of ofce, hotel, luxurious service apartments and trade center Location: Me Tri commune, Tu Liem district, Hanoi Main parameters: Total land areas: 64,964 m2; Construction areas: 12,133 m2; Construction density: 18.68%; Gross Floor areas: 337,276 m2 (excluding basements); Basements areas: 78,000 m2; Land use coefcient: 5.19 times; Number of oors:79 oors (excluding basements); Number of basements: 2 oors; Building height: 360 m. Project life: 50 years Current ownership: PVC (100%) a Current Status & Schedule Project Schedule: Construction : 3 years Operation: 47 years Completed works: Conceptual design ( Pelli Clarke Pelli Architects USA) On-going works: FS: in the process of selecting the consultant Site clearance: Work with the Me Tri People Committee and Tu Liem land development center to build the plan of site clearance
Key Investment Considerations Competitive advantages: Government support: Expected good tax incentives including preferential CIT rate, tax holiday, exemption, import duty exemption, land cost reduction, etc.; Advantageous location: in the new business center of Hanoi and is the transportation hub of the surrounding urban area. There are many important projects in the area such as the National Convention Center, My Dinh National Stadium, etc. Equity ownership offering: 49% Economic Performance Total investment capital: USD 571 million (Pre-FS) NPV: US$ 15.05 million IRR: 15.74% Payback: 10 years and 2 months
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Finance Company
Petrovietnam Finance Corporation (PVFC) has grown to become an important financial institution mainly serving oil and gas industry with corporate finance products and services. Largest Finance Company in Vietnam
In Vietnam, there are 18 nance companies24 registered with total chapter capital of 954 million dollars. They can be loosely classied into two main groups based on their business models: consumer nance companies (CFCs) and business nance companies (BFCs). All CFCs are foreign-invested rms while BFCs are subsidiaries or afliates of state-owned economic groups. Currently, twelve of nance companies operating in Vietnam are local companies with state owned economic groups as major shareholders and six are foreign-invested companies. BFCs are typically industry focused companies, who mainly provide business nance services to their shareholders and businesses in certain industries where they have connections and industry knowledge.
Top 7 financial companies' chartered capital (US$ million) PVFC EVN Finance Vietnam Shippbuilding Finance Rubber Finance Co., Ltd. Vinaconex-Viettel Finance Vinacomin Finance Song Da Finance 100 200 300
Top 7 Finance companies' revenue, 2010 (US$ million)
PVFC EVN Finance Song Da Finance Prudential Vietnam Finance Handico Finance Vietnam Chemical Finance Vinaconex-Viettel Finance 100 200 300 400
Source: Companies websites
Strong Relationships and Expertise

PVFC provides the most comprehensive range of products for corporate customers among nance companies in Vietnam, including corporate loans, project nancing, guarantee and factoring, corporate funding arrangement, mergers and acquisition, etc. PVFC serves a large customer base consisting of PVNs core oil and gas businesses and related industries as well as non PVN clients. As of 2009 approximately 50% of PVFCs corporate customers were companies which are not afliated with PVN. Key to winning business is the companys strong expertise in the oil and gas sector and its privileged access to PVNs projects and businesses. As a listed and leading nance company with the backing of PVN and its strategic partner Morgan Stanley, the company has successfully tapped international nancial markets.
Source: State Bank of Vietnam
All of the top seven nance companies in terms of chartered capital are Vietnamese companies. Petrovietnam Finance (PVFC) is the largest in terms of chartered capital with VND 6,000 billion25 (US$ 291 million) in 2011, followed by EVN Finance and Vietnam Shipping Finance. In addition, PVFC achieved the highest revenue with more than VND 6,400 billion (US$ 335 million) in 2010, which was 3 times higher than that of the second biggest company EVN Finance26.
----------------------------------------------------------------------------------------------------(24) A nance company is a company who makes loans to individuals and/or businesses (25) State Bank of Vietnam (26) The companies websites and site visits:
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Petrovietnam Finance Corporation (PVFC)
Company Overview Key business activities: Corporate Finance products & services (corporate loans, project nance, guarantees & factoring); Corporate Financial Advisory Services (nancing arrangement, mergers & acquisitions, general corporate advisory services, corporate restructuring Money Market & Foreign Exchange Services; Investment; Stock Code: PVF (HOSE) Current ownership: PVN (78%), Morgan Stanley (10%), other investors (12%) Key Historical Milestones and Strategic Initiatives Key historical milestone: June 2000: Establishment as a nance company; 2005: Increased charter capital to VND 300 billion, opened Vung Tau branch and transaction ofce No. 21 and No. 22; 2006: Increased charter capital to VND 1,000 billion; successfully issued PVFCs bonds of VND 690 billion; open branch in Da Nang; 2007: Increased charter capital to VND 3,000 VND; successfully issued PVFCs bonds of VND 1,500 billion; successfully IPO; open branches in Hai Phong, Nam Dinh, Can Tho, Saigon and Thang Long; 2008: Ofcially transformed into a JSC and increased charter capital to VND 5,000 billion. Sold 10% interest to Morgan Stanley; listed on Ho Chi Minh City Stock Exchange (HOSE); open Thanh Hoa branch and Long Bien Transaction Ofce; 2009: Open Representative Ofce in Quang Ngai.
Key Investment Highlights Competitive advantages: Competitive positioning: Largest non-bank nancial rm in Vietnam; Government/PVN support: Priority access to PVN and government projects Customer base: Provides nancial services not only to PVN entities but also to other companies. Performance prospects: - Strong funding position: Listed in HOSE and SGX-ST; - In-depth knowledge of the oil and gas industry: Experienced in arranging and providing nancing to oil and gas projects; - Strong relationships: PVFC has close relationship with state agencies and regulatory authorities in Vietnam and leading banks in the region and the world; - Strategic partnership with Morgan Stanley: Morgan Stanley provides expertise in certain functional areas including risk management, technical employee training and corporate governance; - Strong risk management: PVFC was the rst company to develop and receive SBVs approval for credit rating system. Equity ownership offering: 15% Economic Performance Financial Performance USD million Total revenue Prot before tax Net prot 2008 46.4 -4.3 -1.5 2009 112.5 37.8 31.8 2010 109.4 30.0 25.8 2011 263.4 26.8 23.2
Financial forecast 2012 - 2015 USD million Turnover Prot before tax Prot after tax 2012 426.7 85.3 64.0 2013 521.8 115.7 86.8 2014 652.9 147.5 110.6 2015 778.3 193.4 145.1
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Petrovietnam Transportation Corporation (PVTrans)
Company Overview Establishment: May, 2002 Key business activities: Crude oil and rened oil product, gas and chemical product transportation from and to Vietnam as well as on select routes from Middle East to Asia-Pacic for petroleum Offshore petroleum technical services Logistics services Stock Code: PVT (HOSE) Current ownership: PVN (58.4%), PVFC (8.3%), ACB (3.9%), other investors (29.4%) Economic Performance
Key Historical Milestone Market potential: Strong growth of Vietnamese oil and gas transport volumes: The oil and gas volume is expected to reach 37.8 million tons in 2015 and 68.5 million tons in 2020; Growth oil & gas services markets: Access to growing number of oil & gas projects to be developed by PVN; Growth of international petroleum transport market. Competitive advantages: Government/PVN support: As a subsidiary of Petrovietnam specializing in providing transportation services, PV Trans have been strongly supported by PVN; Competitive positioning: Largest transporter in Vietnams oil and gas industry with a modern eet with 17 ships and total tonnage of 442.6 thousand DWT, accounting for 28% of the Vietnamese oil and gas eets total tonnage, crude oil tankers, product tankers, LPG carriers, offshore support vessels, FSO and FPSO vessels; Customer base: - Exclusive contracts with Dung Quat renery: The company has exclusive transportation right of crude oil for Dung Quat oil renery and about 30% of output; - Strong international customer base: Strong and stable international customer base , including Shell, Exxon Mobil, BP, LG, Caltex; - Ofcial provider of FSO/FPSO in Vietnam: Providing service for several oil elds such as Dai Hung, Chim Sao and Dua (US$ 1 billion package); Performance prospect: has huge opportunity to provide transportation services for the new reneries (Nghi Son, Long Son); coals for PVNs power plants and others cargo for PVNs subsidiaries. Equity ownership offering: 22.4%
Financial Performance USD million Gross prot Prot before tax Prot after tax ROA ROE 2008 12.4 7.5 4.2 1.17% 1.46% 2009 8.4 0.5 0.5 0.14% 0.16% 2010 19.1 3.2 3.9 0.97% 3.20% 2011 18.9 3.2 2.1 0.54% 1.89%
Financial forecast 2011 - 2015 USD million Net revenue Prot before tax Prot after tax 2012 192.9 5.1 3.9 2013 247.7 19.2 14.4 2014 315.8 28.2 21.1 2015 399.1 39.6 29.7
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Petrovietnam Oil Stockpile Company Limited (PVOS)
Company Overview Key business activities: Build up and operate underground terminals for storage and supply of crude oil and product oil which are mainly used for oil renery Current ownership: PVOil (19%), Binh Son Petrochemical Company Ltd (BSR) (10%), SEK (71%) Key Historical Milestone 2008: Received investment certicate for Long Son underground oil storage terminal project; 2009: Signed consulting contract with GeoStock for detailed feasibility study of Long Son underground oil storage terminal project; 2010: Received investment certicate for Dung Quat underground oil storage terminal project;
Major project #1 - Long Son underground oil storage terminal Location: Long Son Petroleum Industrial Zone, Long Son commune, Vung Tau city, Ba Ria - Vung Tau province, Vietnam. Investment capital: US$350 million Facilities: Underground cavern: capacity of 2,050 thousand m3, storage of crude and product oil; SPM: 250,000 300,000 DWT; Crude oil pipeline: 1.1km length, 38-inch diameter, ow rate: 6,000m3/h, working pressure: 10 kg/cm2. Current status: Finalization of basic design; Economic performance (Pre FS): NPV: US$ 135.6 million IRR: 14.87%
Key Investment Highlights Market potential: The national crude oil reserve is expected to reach 1.1 million cubic meters in 2020 and 3.1 million cubic meters in 2022; Growth oil & gas services markets: Access to growing number of renery projects to be developed by PVN; Competitive advantages: Competitive positioning: First mover advantage - the rst company in constructing, operating and supplying storage leasing services in Viet Nam. Customer base: Clients are members of the PVN group (Long Son and Dung Quat renery); and other clients (National Stockpile Agent, oil trading companies) Shareholders experience in oil storage business: - PV Oil: Oil trading company - Binh Son Petrochemical Company Ltd: Constructing and operating Dung Quat renery - SEK: Constructing and operating hydrocarbon underground cavern in Korea. Equity ownership offering: 29%
Major project #2 Dung Quat underground oil storage terminal Location: Dung Quat Economic Zone, Binh Thuan commune, Binh Son district, Quang Ngai province, Vietnam; Investment capital: US$340 million Facilities: Underground cavern: capacity of 1,600 thousand m3, storage of crude and product oil; Jetty/SPM: SPM: 110,000 DWT; new SPM: 250,000DWT; Jetty: 15,000 DWT to 30,000 DWT, with expandable to 50,000 DWT; Pipeline system: crude oil pipeline of 2km length to new SPM, of 7km length to renery. Current status: Completion of pre-feasibility study; Negotiation of upon storage leasing contract between PVOS and BSR is in progress; Economic performance (Pre FS): NPV: US$ 144.6 million IRR: 14.76% Payback period: 9 years
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Appendix 1 - Current Relevant Regulation List of Selected Key Legal Documents

1.
Regulations on Investment
No. 1. 2. 3. Description Law 59/2005/QH11 on Investment Issuance date 12/12/2005
Decree 108/2006/ND-CP providing detailed provisions and guidance for the 22/09/2006 implementation of a number of articles of the Law on Investment Decree 78/2007/ND-CP on Investment in the form of Build-Operate-Transfer (BOT), 11/5/2007 Build- Transfer Operate (BTO) and Build Transfer (BT)
2.
Regulations on Enterprises
No. 1. 2. 3. 4. 5. Description Law 60/2005/QH11 on Enterprises Issuance date 12/12/2005
Decree 102/2010/ND-CP providing detailed guidance for implementation of a number of 01/10/2010 articles of the Law on Enterprises Decree 43/2010/ND-CP regarding enterprise registration 15/04/2010 Decision 88/2009/QD-TTg providing Regulations on purchase of shares by foreign 18/6/2009 investors in Vietnamese companies Circular 131/2010/TT-BTC providing implementation guidelines on the purchase of 06/9/2010 shares by foreign investors in Vietnamese companies
3.
Regulations on Petroleum
No. 1. 2. 3. 4. 5. Description Law 10/2008/QH12 on Petroleum Decree 13/2011/ND-CP on safety of petroleum construction on land Decree 139/2005/ND-CP on petroleum production sharing contract - Standard Form Issuance date 12/06/2008 11/02/2011 11/11/2005
Circular 105/2010/TT-BTC providing guidance for Decree 50/2010/N-CP on Tax 23/07/2010 regime for Natural resources Circular 32/2009/TT-BTC providing guidelines for implementation of regulations on taxes in respect of organizations and individuals undertaking petroleum exploration and 19/02/2009 exploitation operations in accordance with the Law on Petroleum
81
4.
Regulations on Foreign Exchange

No. 1. 2. 3. Description Ordinance 28/2005/PL-UBTVQH on Foreign exchange Decree 160/2006/ND-CP on Foreign exchange management Circular 04/2001/TT-NHNN on Foreign exchange management Issuance date 13/12/2005 28/12/2006 18/05/2001
5.
Regulations on Energy
No. 1. 2. 3. 4. Description Law 50/2010/QH12: Law on economical and effective use of energy Issuance date 28/6/2010
Circular 41/2010/TT-BCT providing guidance on the determination of power purchase price; process, procedures and issuance of power purchase price framework; approval of 14/12/2010 power purchase agreements (PPA). Circular 45/2011/TT-BCT regulating operation of competitive power generation market 30/12/2011 Circular 18/2010/TT-BCT regulating operation of competitive power generation market 10/05/2010
6.
Regulations on Securities
No. 1. 2. 3. 4. 5. 6. Description Law 70/2006/QH11: Law on Securities Issuance date 29/6/2006
Law 62/2010/QH12: Amending and replacing some articles of Law 70/2006 on Securities 24/11/2010 Decree 84/2010/ND-CP providing detailed guidelines for the implementation of the Law 2/8/2010 on Securities Decree 14/2007/ND-CP providing detailed guidelines for the implementation of the Law 19/1/2007 on Securities Decree 144/2003/ND-CP on Securities & Securities Markets 28/11/2003 Decision 55/2009/QD-TTg on participation of foreign investors in securities market of Vietnam 15/04/2009
7.
Regulations on Credit Institutions (CIs) And Finance Companies

No. 1. 2. 3. 4. 5. 6. 7. Description Law 47/2010/QH12 on Credit Institutions Issuance date 29/06/2010
Decree 10/2011/ND-CP amending Decree 141-2006-ND- on the minimum level of legal 26/01/2011 capital applicable to credit institutions Decree 79/2002/ND-CP on organization and operation of nance companies Decree 81/2008/ND-CP amending and supplementing Decree 79/2002 4/10/2002 29/7/2008
Decree 69/2007/ND-CP on purchase of shares by foreign investors in Vietnamese 20/04/2007 commercial banks Decree 146/2005/ND-CP on nancial regime applicable to credit institutions Decree 74/2005/ND-CP on Anti-Money Laundering 23/11/2005 7/06/2005
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8.
Labour Regulations
No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Description Labour code 35-L/CTN Law 35/2002/QH10 amending a number of articles of the Labour code Law 74/2006/QH11 amending a number of articles of the Labour code Law 84/2007/QH11 amending a number of articles of the Labour code Labour code 2012 (replace Labour Code 35 and will come into effective from 1/5/2013) Decree 196-CP on Collective Labour Agreements Decree 93-2002-ND-CP amending and supplementing Decree 196-CP Decree 70/2011/ND-CP on minimum area wage rates applicable from 1 October 2011 Decree 47/2010/ND-CP on administrative penalties for breach of law on labour Issuance date 5/7/1994 19/4/2002 12/12/2006 11/4/2007 18/06/2012 31/12/1994 11/11/2002 22/08/2011 6/05/2010
Decree 133/2007/ND-CP providing detailed regulations and guidelines on the laws 8/08/2007 amending the Labour Code regarding labour dispute resolution Decree 44/2003/ND-CP on labour contracts Decree 109/2002/ND-CP on working hours & rest breaks 9/5/2003 27/12/2002
Decree 41/CP on Internal Labour Rules - Responsibility for Damage [Note: partially 6/07/1995 amended by Decree 33/2003/ND-CP dated 2 April 2003.] Decree 196/CP on Collective Labour Agreements [Note: partially amended by Decree 93/2002/ND-CP of the Government dated 11 November 2002, effective as of 1 January 31/12/1994 2003.
9.
Regulations on Social, Health, And Umemployment Insurance

No. 1. 2. 3. 4. 5. Description Law 71/2006/QH11 on Social Insurance Law 25/2008/QH12 on Health Insurance Issuance date 29/06/2006 14/11/2008
Decree 127/2008/ND-CP providing detailed regulations and implementing guidelines on 22/08/2011 a number of articles of the Law on Social Insurance regarding unemployment insurance Decree 62/2009/ND-CP providing detailed regulations and implementing guidelines on 27/7/2009 a number of articles of the Law on Health Insurance Circular 09/2009/TTLT-BYT-BTC providing guidelines for implementation of Health 9/5/2003 Insurance regime
83
10. Regulations on Technology Transfer No. 1. 2. 3. 4. 5. Description Law 80/2006/QH11 on Technology Transfer Issuance date 12/12/2006
Decree 133/2008/ND-CP regulating detailed provisions for implementation of the Law 15/11/2011 on Technology Transfer Circular 10/2009/TT-BKHCN guiding technology appraisal of investment projects 24/04/2009 Circular 31/2011/TT-BKHCN guiding the contents and modes of operation of technology 15/11/2011 evaluation and assessment organizations Circular 04/2010/TT-BKHCN guiding the implementation of a number of articles of 21/06/2010 Decree No. 49/2009/ND-CP
11. Regulations on Intellectual Property No. 1. 2. 3. 4. Description Law 50/2005/QH11 on Intellectual Property Law 36/2009/QH12 amending the Law on Intellectual Property Issuance date 12/12/2005 29/06/2009
Decree 105/2006/ND-CP regarding guidance for Implementation of a Number of Articles of Law on Intellectual Property with Respect to Protection of Intellectual Property Rights 22/09/2006 and State Administration of Intellectual Property Rights Decree 119/2010/ND-CP amending and supplementing a number of articles the 30/12/2010 Governments Decree No. 105/2006/ND-CP
12. Regulations on Taxes No. A Description Corporate Income Tax Law 14/2008/QH12 on Corporate Income Tax 12/06/2008 Decree 124/2008/ND-CP on providing guidance on the implementation of the Law on 11/12/2008 Corporate Income Tax Decree 122/2011/ND-CP revising and supplementing some contents in Decree 124/2008/ 27/12/2011 ND-CP dated 11 December 2008 Circular 130/2008/TT-BTC providing detailed guidance on the implementation of the 26/12/2008 Law on Corporate Income Tax and Decree 124 Circular 18/2011/TT-BTC amending and supplementing CIT Circular 130/2008/TT-BTC 10/02/2011 B Value Added Tax Law 13/2008/QH12 on Value Added Tax 12/06/2008 Decree 123/2008/ND-CP providing guidance on the implementation of the Law on 23/12/2008 Value Added Tax Decree 121/2011/ND-CP revising and supplementing some content in Decree 123/2008/ 27/12/2011 ND-CP Circular 06/2012/TT-BTC providing detailed guidance on the implementation of the 11/01/2012 Law on Value Added Tax and Decree 121 and Decree 123 Issuance date
84
Natural Resource Tax Law 45/2009/QH12 on Natural Resource Tax 25/11/2009 Decree 50/2010/ND-CP providing guidance on the implementation of the Law on 14/05/2010 Natural Resource Tax Circular 105/2010/TT-BTC providing detailed guidance on the implementation of the 23/07/2010 Law on Natural Resources Tax and Decree 50.
Import / Export Duties Law 45/2005/QH11 on Import and Export Duties 14/06/2005 Decree 87/2010/ND-CP providing guidance on some articles of the Law on Import and 13/08/2010 Export Duties Circular 194/2010/TT-BTC providing guidance on customs procedures; customs 06/12/2010 inspection, supervision; ED/ID and tax administration for exported & imported goods
Special Sales Tax Law 27/2008/QH12 on Special Sales Tax 14/11/2008 Decree 26/2009/ND-CP providing guidance on the implementation of the Law on 16/03/2009 Special Sales Tax Decree 113/2011/ND-CP amending and supplementing a number of Articles of Decree 08/12/2011 26/2009/ND-CP dated 16 March 2009 Circular 05/2012/TT-BTC providing detailed guidance on the implementation of the 05/01/2012 Law on Special Sales Tax and Decree 113
Personal Income Tax Law 04/2007/QH12 on Personal Income Tax Decree 106/2010/ND-CP amending and supplementing Decree 100/2008/ND-CP 21/11/2006 28/10/2010 Decree 100/2008/ND-CP providing guidance on the implementation of the Law on PIT 08/09/2008 Circular No. 84/2008/TT-BTC providing detailed guidance on the implementation of the 30/09/2008 Law on PIT and Decree 100 Circular 62/2009/TT-BTC amending and supplementing Circular 84/2008/TT-BTC 27/03/2009 of MoF Circular 02/2010/TT-BTC amending Circular 84/2008/TT-BTC on PIT 11/01/2010 Circular 113/2011/TT-BTC partly amending Circular 62/2009/TT-BTC, Circular 04/08/2011 02/2010/TT-BTC and Circular 12/2011/TT-BTC
Appendix 2 - Abbreviations
85
Term ASEAN b/d BCC bcm BOT BPD BPSD BSR BT BTO c. CAGR CBM CER CIT CNG COD CPV DQS DWT E&P EIA EPC ESP EU EVN FDI FEED FGD FO FPSO FS FSO FTA
Meaning Association of Southeast Asian Nations Barrels Per Day Business Corporation Contract Billion Cubic Metre Build-Operate-Transfer Barrels Per Day Barrels per Stream Day Binh Son Petrochemical Company Limited Company Build-Transfer Build-Transfer-Operate Circa (approximation) Compound Annual Growth Rate Coal Bed Methane Carbon Emission Reduction Corporate Income Tax Compressed Natural Gas Commercial Operation Date Communist Party of Vietnam Dung Quat Shipyard Dead Weight Ton Exploration and Production Environmental Impact Assessment Engineering Procurement and Construction Electrostatic Precipitator European Union Vietnam Electricity Corporation Foreign Direct Investment Front End Engineering Design Flue-gas Desulfurization Fuel Oil Floating Production Storage And Ofoading Feasibility Study Floating Storage and Ofoading Free Trade Agreement
86
GDP GPP GSO HNX HOSE IRR ITB KBDP KMTA LPG MoIT NA NOCs NOx NPV PAC PAP PPA PPP PVC PVFC PVGas PVN PVOS PVTex PVTrans ROA ROE RPR SME SOE SOx SPM tcm TEU TPP USD VAT VND WTO
Gross Domestic Product General Purpose Processor General Statistics Ofce Hanoi Stock Exchange Ho Chi Minh City Stock Exchange Internal Rate of Return Invitation To Bid Thousand Barrels Per Day Thousand Metric Tons per Annum Liqueed Petroleum Gas Ministry of Industry and Trade Not Available National Oil Corporations Nitrogen Oxide Net Present Value Provisional Acceptance Certicate Phuoc An Port Project Power Purchase Agreement Public Private Partnership Petrovietnam Construction Joint Stock Company Petrovietnam Financial Company Petrovietnam Gas Corporation Petrovietnam Oil and Gas Group Petrovietnam Oil Stockpile Company Limited Petrovietnam Petrochemcical & Textile Fiber Joint Stock Company Petrovietnam Transportation Corporation Return on Assets Return on Equity Reserves-to-production ratio Small and Medium sized Enterprise State-Owned Enterprise Sulfur Oxide Single Point Moorning Trillion Cubic Metres Twenty-Foot Equivalent Unit Trans-Pacic Strategic Economic Partnership United States Dollars Value-Added Tax Vietnam Dong World Trade Organization
87
Contact Person Ms. Le Thi Thu Huong Deputy General Manager Investment & Development Division Tel: +84 4 3772 5891 Fax: +84 4 3826 5942 Email: huongltt@pvn.vn
VIETNAM OIL & GAS GROUP 18 Lang Ha Street, Ba Dinh, Hanoi, Viet Nam Tel: +844 3825 2526 - Fax: +844 3826 5942 http://www.pvn.vn - http://english.pvn.vn/invest/

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Message from the President and CEO

Dr. Do Van Hau

Partnership with Petrovietnam 2012

Chapter 1: Vietnam - an Accessible Growth Market

Chapter 1: Vietnam An Accessible Growth Market

Vietnam - One of the Most Dynamic Economies in Southeast Asia

Affected by the global economic crisis

Source: GSO, EIU, World Databank and PwCs calculation

Thailand Indonesia Malaysia

Partnership with Petrovietnam 2012

High but Curbed Inflation

8.4% 18.6% 4.1% 5.6% 6.3% 5.3%

Industry & Construction Services Agriculture, Forestry & Fishery

% of Real GDP 2000 35% 41% 23%

% of Real GDP 2011 41% 37% 22%

CAGR 2000 2011 8.9% 7.2% 3.6%

Source: Vietnam GSO 2011

GDP Structure by Ownership, 2000 - 2011

49.9% FDI Non-state

Source: Vietnam GSO

Chapter 1: Vietnam An Accessible Growth Market

An Export-Led Growth Economy

2.7 0.7 1.6 0.7

Source: Vietnam GSO, Vietnam Customs 2011

Improved Legal System

Ethical behavior of firms

Total exports as % of GDP, 2011

(Low occurence of) Diversion of...

Stable Political System

Partnership with Petrovietnam 2012

Prospects of a Better Administrative Environment

A Large Pool of Well-Educated Workers at a Relatively Low Cost

Source: World Bank

Chapter 1: Vietnam An Accessible Growth Market

Gas Demand and Supply

Source: BMI Vietnam Oil and Gas Report Q4 2011

400 3.4% 8.1% 13.5%

Source: BMI Vietnam Oil and Gas Report Q4 2011

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300 Million tons

10,000 8,000 6,000 4,000 2,000

Source: BMI Vietnam Oil and Gas Report Q4 2011

Electricity consumption per capita, 2010 2015 15 CAGR 10 15 MWh 10 5 3.8% m a a Th ai la nd Ch in na in ay al ia es si Au st r pp et al

----------------------------------------------------------------------------------------------------(8) BPs World Energy Report 2011, PwC calculation

Chapter 1: Vietnam An Accessible Growth Market

An Attractive Destination for FDI in the Region

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Multi & Bilateral Trade Agreements

204 billion USD

Vietnams Investment Factsheet

India -10% -20% -30% -40%

Malaysia Vietnam Singapore

Thailand Phillipines 0% 5% 10% 15%

Net flows of inward FDI as % of GDP, 2011

Chapter 1: Vietnam An Accessible Growth Market

Currency Exchange rate (2011) Labour force

Vietnamese Dong (VND) USD 1 = VND 20,649

64 provinces and cities directly under the Central Government

Agriculture: 22% Industry: 41% Services: 37%

Foreign Direct Investment

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