Nghi Son Refinery and Petrochemical Complex turns profitable in Q1 on full-capacity operations

Operating at full capacity, the Nghi Son Refinery and Petrochemical Complex in Vietnam's central province of Thanh Hoa reported its first profit in Q1/2026, marking a significant turnaround after years of losses.

Atsuhiko Hirano, representative director and executive vice president of Japan’s Idemitsu Kosan, a major shareholder in the project, disclosed the information at a meeting with Vietnam’s Ministry of Foreign Affairs last Friday.

An overview of the Nghi Son Refinery and Petrochemical Complex in Thanh Hoa province, central Vietnam. Photo courtesy of Nghi Son Refinery and Petrochemical LLC.

Located in the Nghi Son Economic Zone, the complex is one of the largest foreign-invested projects in Vietnam, with a total investment of $9 billion. Construction began in 2013 and commercial operations started in November 2018.

Its operator - Nghi Son Refinery and Petrochemical LLC (NSRP) - has four shareholders. Idemitsu Kosan holds a 35.1% stake, Kuwait Petroleum International 35.1%, Petrovietnam 25.1%, and Japan’s Mitsui Chemicals 4.7%.

The refinery has a design capacity of 200,000 barrels of crude oil per day, equivalent to 10 million tons annually. Its main products include gasoline, diesel fuel, jet fuel, polypropylene, and paraxylene.

When operating steadily, Nghi Son meets approximately 35-40% of Vietnam’s domestic petroleum demand. As a result, any reduction in capacity, maintenance shutdowns, or feedstock shortages can significantly affect the country’s fuel supply.

Years of financial challenges.

Since commencing commercial operations, Nghi Son has faced difficulties due to fluctuations in global oil markets, the impact of the Covid-19 pandemic, shrinking refining margins, and high financing costs.

Its heavy debt burden and operational challenges during the early years contributed to prolonged losses. Even as production efficiency improved, interest expenses continued to weigh on financial performance.

For the fiscal year ending March 2025, Idemitsu reported that Nghi Son recorded an operating loss because of weaker product margins, despite maintaining high utilization rates. The Japanese company stated that it aimed to improve the project's performance by sustaining stable operations at high capacity.

In response to the refinery’s persistent losses, the Vietnamese government repeatedly instructed the shareholders to develop and implement a comprehensive restructuring plan.

In April 2026, amid disruptions to crude oil supplies from the Middle East, the government again urged the joint venture to diversify its sources of crude oil rather than relying on a single supplier, while also restructuring its finances and product portfolio.

Crude oil supply secured for the near term.

During the meeting with Atsuhiko Hirano, representative director and executive vice president of Idemitsu Kosan, Deputy Foreign Minister Nguyen Minh Vu praised the Japanese group's investments in Vietnam, particularly its role as a Nghi Son shareholder.

Deputy Foreign Minister Nguyen Minh Vu (left) receives Atsuhiko Hirano, representative director and executive vice president of Japan’s Idemitsu Kosan. Photo courtesy of the Ministry of Foreign Affairs.

He emphasized that the Nghi Son complex is one of the flagship economic cooperation projects between Vietnam and Japan and plays an important role in Vietnam’s energy security.

According to the Ministry of Foreign Affairs, Japanese Prime Minister Takaichi Sanae has committed to supporting arrangements for crude oil supplies to the refinery under the Power Asia initiative.

The Deputy Minister called on Idemitsu to work closely with other shareholders to ensure a stable crude oil supply and reliable refinery operations, while strengthening cost controls, optimizing cash flow, and developing higher-value downstream products.

Hirano stated that crude oil supplies have been secured for the immediate future, allowing the refinery to operate at full capacity.

This development is particularly significant amid the ongoing energy crisis caused by tensions in the Middle East and the closure of the Strait of Hormuz, which have limited crude oil supplies and exposed the lack of sufficient oil reserves across Vietnam and Southeast Asia, he said.

Idemitsu also pledged to continue securing crude oil supplies for the project and to expand its investments in Vietnam’s energy sector, including green energy and refined petroleum products, he added.

Petrovietnam