Deputy Prime Minister, Minister of Oil, Minister of State for Economic Affairs and Investment, Acting Minister of Finance, Chairman of the Board of Directors of the Kuwait Petroleum Corporation, Dr. Saad Al-Barrak, revealed 3 reasons outside the control of the “Vietnam Refinery and Petrochemical Complex” and the Kuwait Petroleum International behind expected losses for 2023, which may reach to nearly a billion US dollars.
He indicated that the “KPC International has discussed with its partners a number of long- and short-term solutions proposed by the Vietnam Refinery and Petrochemical Complex and its advisors related to improving the company’s financial performance, such as financial restructuring of debt and its alternatives.”
This came in Al-Barrak’s response to a parliamentary question by MP Marzouq Al-Ghanim regarding the meeting held last July, during which the losses of the Vietnam Refinery for 2023 were presented and discussed, and wondered if the Vietnam Refinery Company will achieve losses of a billion dollars this year.
Al-Barrak explained in the response that “the partners of the Vietnam Refinery and Petrochemical Complex Company hold periodic meetings of the Executive Committee of the Board of Directors of the Vietnam Refinery and Petrochemical Complex Company, in the presence of the supporting secondary committees, the executive management and its advisors to find out and discuss the latest developments related to the technical, administrative, financial and commercial performance of the refinery.
The results of the various workshops held by the Vietnam Refinery and Petrochemical Complex Company, in which representatives of the partners participate, are aimed improving the performance in all fields. The Executive Committee of the Vietnam Refinery and Petrochemical Complex Company held its meeting as scheduled on July 20, 2023, to be followed by subsequent monthly meetings to achieve the desired goals.
He added, “According to the recent forecasts of the Vietnam Refinery and Petrochemical Complex Company, which were reviewed at the company’s executive committee meeting on July 20, 2023, the losses in 2023 may reach nearly one billion US dollars, and the expected losses are due to the following reasons:
— The fluctuation of the profit margin due to the fluctuation in the prices of petroleum products.
— Closing the refinery for maintenance for a period of two months which will stop the cash flows during that period.
— High loan interest rates.
These are data outside the control of the refinery company and the Kuwait International Petroleum Company.
Regarding the plans and programs of the Kuwait Petroleum International, in cooperation with its partners, to avoid losses and achieve appropriate profitability, Al-Barrak explained that “KPI has recently discussed with its partners a number of long- and short-term solutions proposed by the Vietnam Refinery and Petrochemical Complex and its advisors related to improving the company’s financial performance.
These include financial restructuring of debts and its alternatives, in light of the faltering of the recent negotiations with the financiers as a result of the Vietnamese partner’s incompatibility with the foreign partners, and its failure to accept a number of non-binding clauses for the financial restructuring of the Vietnam Refinery and Petrochemical Complex Company with the aim of reaching a consensual solution, after completing the study of all the options offered technically and legally.
He pointed out that, accordingly, “it is difficult at the present time to set a timetable for achieving profitability and avoiding losses, in light of the continuation of discussions between the partners, who are keen to accelerate the pace of reaching a consensual solution as soon as possible.”
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