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The Vietnam National Oil and Gas Group (PVN) signed in Hanoi on Thursday three standardized ISDA contracts with foreign banks as the basis for derivative transactions in the future.
The banks include PVN and BNP Paribas, Sumitomo Mitsui Banking Corp (SMBC) and Standard Chartered Bank. This was the first time that PVN had inked such contracts including the ISDA Master Agreement 2002 of the International Swaps and Derivatives Association.
The signing is expected to be a prerequisite for the signing of PVN’s future practical derivative transactions to mitigate risks for the group’s financial activities.
Speaking at the signing ceremony, PVN Deputy General Director Nguyen Tien Dung said that in implementing its development investment strategy in the next period, PVN has been mobilizing capital from various sources for oil and gas energy projects. So far, the group’s foreign loans have hit US$3 billion.
He also said that PVN and its partners would hold negotiations to sign practical derivative contracts.
SMBC took part in provision of loans of $270 million to the Nhon Trach 1 Power Plant, $300 million to the Dung Quat Oil Refinery and $96 million to Vung Ang Power Plant.
Standard Chartered Bank was a joint lender of $250 million to the Dung Quat Oil Refinery.
PVN plans to negotiate with other foreign banks like Citibank and Lions to sign more ISDA to create necessary competitiveness in selecting providers of derivative services.
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