The 130,000-barrel-a-day plant is expected to produce 4.75 million tons of oil products in the year, said the official, who didn't want to be named.

"The refinery will operate at 80%-85% of its capacity this year, as we have taken unexpected factors into account, such as floods and typhoons," the official told Dow Jones Newswires.

Of the 5.2 million tons of crude oil that the plant is expected to process this year, 1 million tons will be imported, he said. The rest will be local Bach Ho crude oil.

"We are negotiating with BP for the importing of the crude oil, though the negotiations have yet to be finished," he said. "We will meet BP again next week to continue the negotiations."

The plant is expected to generate revenue of VND62.3 trillion ($3.37 billion) in 2010, he said.

Last year, Dung Quat refinery in the central province of Quang Ngai processed 2.1 million tons of crude oil and produced 1.5 million tons of oil products.

The plant was shut down on Dec. 22 for the replacement of a valve in its residual fluid catalytic cracking unit and for an overall check, the official said.

"It will be gradually restarted on Jan. 13 and will be fully operational from the end of this month," he said.

Dow Jones - January 7, 2010

First Vietnam refinery too small

Vietnam has learned a lesson from its first oil refinery and will build future facilities that are larger and more efficient, the chairman of PetroVietnam was quoted as saying on Wednesday.

Early last year the country's first refinery opened at Dung Quat, in central Vietnam, with a capacity of 6.5 million tonnes (7.15 million tons) a year or 148,000 barrels per day.

Investing in future refineries with such a small capacity would be inefficient, the state Vietnam News quoted Dinh La Thang, chairman of PetroVietnam, as saying.

"This is the lesson drawn from Dung Quat," Thang said, adding that two planned refineries would have annual capacities of 10 million tonnes of oil.

PetroVietnam confirmed the comments to AFP.

Until Dung Quat opened at a cost of more than 2.5 billion dollars, fast-developing Vietnam imported all of the refined petroleum products needed for domestic use.

PetroVietnam, the trading name of the Vietnam National Oil and Gas Group, on Tuesday said its revenues last year amounted to 16 percent of the country's economic output, down from 20 percent a year earlier.

The firm did not report annual profit figures.

Vietnam boasts rich offshore oil reserves located in the South China Sea where PetroVietnam, together with Russian and other foreign partners, exploits several major fields.

Agence France Presse - January 7, 2010