BSR Expands International Cooperation, Secures Strategic Crude Oil Supply for Dung Quat Refinery

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Since 2009, two Petrovietnam subsidiaries - PVOIL and BSR - have signed multiple agreements with SOCAR Trading SA (a subsidiary of SOCAR, Azerbaijan’s National Oil and Gas Corporation) to supply Azeri crude oil to the Dung Quat Refinery.

From 2010 to the end of January 2025, SOCAR Trading Singapore (a branch of SOCAR Trading SA) delivered 35 shipments of Azeri crude oil to Dung Quat, totaling nearly 31.7 million barrels - equivalent to 4.34 million tonnes - valued at approximately USD 2.55 billion.

General Secretary of the Communist Party of Vietnam Central Committee To Lam and President of Azerbaijan Ilham Aliyev witness the signing of a Memorandum of Understanding on long-term crude oil supply for the Dung Quat Refinery between BSR - a Petrovietnam subsidiary and the Ministry of Economy of Azerbaijan

The newly signed MoU between BSR and SOCAR Trading Singapore holds strategic significance. This partnership will help BSR secure a stable long-term crude supply and better respond to global geopolitical uncertainties. Under the MoU, SOCAR Trading is expected to supply BSR with up to 2 million barrels of Azeri crude per month, from July 1, 2025, until the end of 2035. This translates to an estimated annual volume of 3.4 - 3.5 million tonnes, meeting approximately 50% of the refinery’s total crude processing needs (more than 7 million tonnes per year). Direct procurement from SOCAR Trading Singapore also helps BSR shorten the supply chain, reduce logistics costs, and maintain stable refinery operations.

Currently, the Bach Ho (White Tiger) crude oil field remains the primary domestic source for Dung Quat Refinery. However, declining reserves after years of production are posing challenges to domestic supply security. As Vietnam’s self-sufficiency in crude oil diminishes, BSR is pursuing a strategy to diversify imports from international sources to ensure safe and stable refinery operations. Among the preferred options is Azerbaijan’s Azeri crude, known for its light composition, low sulfur content, and ease of processing - qualities that enhance BSR’s operational efficiency, lower treatment costs, and optimize overall system performance.

In addition to Azeri crude, other types such as Bonny Light (Nigeria), WTI (USA), and Murban (UAE) - which are compatible with Dung Quat’s refining technology - are also accessible through SOCAR Trading SA. This flexibility allows BSR to avoid dependence on a single source and adjust refining modes as needed.

The MoU is also a strategic move in preparation for the long-term crude oil supply required for the Dung Quat Refinery Upgrade and Expansion Project, scheduled for completion in 2028. Once upgraded, the refinery will be capable of processing hundreds of different crude types, significantly improving its flexibility and market adaptability.

Tanker delivering Azeri crude oil at the SPM buoy for the Dung Quat Refinery

The Memorandum of Understanding, signed in the presence of General Secretary To Lam and President of the Republic of Azerbaijan Ilham Aliyev, marks a strategic move that demonstrates the strong commitment of both nations to enhancing bilateral cooperation, particularly in the fields of energy, oil and gas, and sustainable energy transition. The foundation for cooperation between the two countries - especially in the oil and gas and energy sectors - was laid by President Hồ Chí Minh in 1959. Over the years, the strong and enduring partnership between Petrovietnam, particularly BSR, and SOCAR has flourished, playing a key role in advancing the Strategic Partnership between Vietnam and Azerbaijan.

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