Vietnam Tops Emerging Markets Index and Pumps Up Oil

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Researched by Industrial Info Resources (Sugar Land, Texas). As new projects in the power, hydrocarbon and infrastructure sectors continue to be announced in Vietnam on a regular basis, a new emerging-market index reports that the country has become the most attractive location for manufacturing investment.

The index, compiled by Price Waterhouse Coopers assesses 20 prominent emerging market locations on the basis of ‘reward’ factors, including production costs, size of market, taxes, transport costs and tariffs and ‘risk’ factors largely defined by bond market risk premiums. According to the index Vietnam is highly cost competitive, though risks are also relatively high. China ranks second after Vietnam and is followed by Poland, Chile, Malaysia, Thailand, India, South Africa and Saudi Arabia.

In July, Petrovietnam discussed a $2 billion petrochemical complex with Vietnam Chemicals, Thailand’s Siam Cement Group (SCG) and Thai Chemicals. SCG is conducting feasibility studies, reviewing joint venture schemes and outlining joint venture contracts. The project is scheduled to start in the fourth quarter of 2007 and go onstream in late 2011. It will have an estimated capacity of 345,000 tons per annum (tpa) of vinyl chloride monomer, 300,000 tpa of ethylene dichloride and 250,000 tpa of chlor alkali. The plant will be sited at the Phu My 11 industrial park in Ba Ria, Vung Tau province southeast of Ho Chi Minh City.

Shrinking crude oil output has caused Petrovietnam to revise crude oil export targets. Export volume was only 7.69 million tons valued at around $3.7 billion in the first six months of 2007 which was down 10% on 2006. To step up exploration and production activities PetroVietnam has raised its overseas oil exploration deals to 9. The group is actively seeking investment opportunities in Venezuela, Cuba, Ecuador, Kazakhstan, Myanmar, Tunisia and Iran and has signed four new contracts to explore in Vietnam. To date, it has signed 57 oil and gas deals with foreign companies to search for oil and gas in the country, including 35 valid contracts.

BP (NYSE:BP ) (London, UK) estimates that $2 billion will be needed to raise output, with its partners, at current gas fields and build a gas fuelled power plant at Dong Nai Province. ConocoPhillips (NYSE:COP ) (Houston, Texas) has invested $1 billion over the last 10 years and will invest a similar amount into oil projects in the next 10 years.

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