PetroVietnam dismisses cost overrun claims for Dung Quat refinery

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Dung Quat, Vietnam's first oil refinery, has cost US$3 billion to build and the investment has not exceeded this figure as speculated elsewhere recently, an official at state-owned PetroVietnam said.

The project had an original cost estimate of $2.5 billion but the government in 2005 revised the figure to $3 billion, Phung Dinh Thuc, PetroVietnam's chief executive officer, said in an interview published by the Vietnam Economic Times Thursday.

"I can confirm that after the revision the total cost for the project was still $3 billion," he said. "Of the investment, loans accounted for $1.7 billion and we covered the rest."

"The latest balance sheet also showed that the cost was within $3 billion and it never exceeded that level," Thuc said.

The plant was completed and transferred to PetroVietnam at the end of May after several delays caused by the project contractor.

Thuc said his company plans to increase the annual capacity of Dung Quat to 10 million tons from 6.5 million tons at present. A detailed plan will be submitted to the government in the near future, he said.

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