By VU TRONG KHANH
HANOI -- Vietnam Oil & Gas Group, or Petrovietnam, has been told by the government to scrap plans to expand capacity at its Dung Quat refinery.
However, the 130,000-bpd refinery will be upgraded.
"Upgrading the refinery so that it can process a diversified feedstock will cost less than expanding its capacity," Petrovietnam unit Binh Son Refinery chairman Nguyen Hoai Giang said in the statement.
Dung Quat started processing sweet crude oil from the Bach Ho field in 2009. Production from the field has peaked.
Petrovietnam will submit upgrade plans to the Prime Minister by September.
Petrovietnam had earlier said it planned to sell a 49% stake in the refinery to foreign investors and use the proceeds to expand capacity to 200,000 bpd.
Dow Jones Newswires