Vietnam's offshore has not been widely explored and has considerable potential, according to Dr. Nguyen Bich Dat, vice minister of Vietnam's Ministry of Planning and Investment. Vietnam, he says, is "improving the climate for investment" in what he described as a "still very promising" offshore. Dat shared the country's desire to encourage foreign investment with industry journalists in Houston today.
As Vietnam makes the transition from central economy to market economy, the time is ripe to act on the promise of investment in Vietnam, Dat said. The transition period is characterized by what Dat called "doi moi," literally translated as "renovation."
The renovating of the Vietnamese economy began with the US/Vietnam Bilateral Trade Agreement in 2001, which gave rise in 2002 to a 60% growth in two-way trade between the countries totaling $3 billion.
The Vietnamese government has tasked state-owned PetroVietnam with increasing production, according to Dinh Huu Loc, the company's general manager of international cooperation. This first visit to Houston is one step toward that goal. "We would like to draw attention of American business to Vietnam," Loc said.
Another way Vietnam is going about reaching that goal is by providing incentives for investors, including deepwater incentives that are to take effect next year, Loc said. Corporate tax is to be decreased to 32%, and royalties are being scaled back from 8% to 6%, he said.
The hope is that incentives will increase interest in the bidding round set for June 2004, which covers about 10 offshore blocks.
In a departure from standard procedure, production-sharing contracts will not be limited to the bidding round, Loc said. Vietnam will consider bids on offshore blocks from any interested company before and after the June event, he said.
Meanwhile, Vietnam is looking outside its borders for investment in neighboring areas, including China, Malaysia, and Indonesia. The primary targets will be small projects that can be capably managed by Vietnam, Loc said, not large-scale projects that could leave PetroVietnam out of its depth.
The search for investment will continue next month when Vietnamese representatives make a second trip to the United States, this time to discuss expanding investment with Unocal.