Vietnam offers increased oil, gas cooperation with Russia

Dynamic development

Vietnam is Russia’s only strategic partner in Southeast Asia. In recent years, economic cooperation, trade and investment between the two countries have expanded. In the first two years after the 2015 signing of the free trade agreement between Vietnam and the Eurasian Economic Union, two-way trade has grown rapidly, about 30 percent annually. In 2018, bilateral trade reached nearly US$4.6 billion, an increase of 28.6 percent compared with 2017, and this included US$2.44 billion worth of Russian exports to Vietnam. Currently, Vietnam ranks 23rd among Russia’s trading partners, first among ASEAN countries and sixth among APEC nations.

Regarding investment, Russia has 123 oil and gas investment projects in Vietnam with total capital of US$1 billion, while Vietnam has more than 20 investment projects in Russia with total capital of nearly US$3 billion. Vietnam’s TH True Milk dairy farming and milk processing projects in Moscow and Kaluga are two leading ventures.

These results reflect the strong progress of bilateral relations, based not only on their traditional relationship but also on new opportunities for mutual development.

However, Deputy Prime Minister Trinh Dinh Dung said these results have yet to meet the expectations of both sides. The Vietnamese and Russian economies complement each other in terms of structure as well as products. Russia has great potential in terms of finance and technology, especially in manufacturing engineering, new energy, mining, automation, industrial production, environment and support industries, while Vietnam has an abundant workforce and is rich in natural resources with a favorable geographical location. Vietnam is also valued by foreign investors for its political and socioeconomic stability and security, its promotion of sustainable economic development according to market mechanisms and acceleration of international integration.

“Vietnam lists Russia among the most important partners in its external relations policy and is willing to play the role of a bridge between Russia and ASEAN,” Deputy PM Dung said.

Facilitating business cooperation

At the session, the two deputy prime ministers agreed to consider the removal of non-tariff barriers to bilateral trade, especially in agricultural products, seafood, textiles, garments and footwear. Regarding oil and gas cooperation, Deputy PM Dung affirmed that Vietnam is willing to create favorable conditions for Russian companies to increase their presence and carry out oil and gas exploration and exploitation projects within Vietnam’s continental shelf.

Russian Deputy PM Maxim Akimov emphasized that the Russian government would continue its support for Russian companies to expand cooperation with Vietnamese partners in fields such as liquefied natural gas (NLG) supply and gas-fired power generation, while at the same time creating favorable conditions for Vietnamese companies to invest in Russia. The Russian side is willing to discuss necessary conditions to bring Russian companies to Vietnam or information technology training programs for Vietnamese students and workers.

Apart from oil, gas and energy, Russia will promote cooperation with Vietnam in other fields such as high technology, telecommunications and digital technology. E-government building, information security and smart city development will be major areas of bilateral cooperation, as well.

According to the Russian Presidential Commissioner for Entrepreneurs’ Rights, Boris Titov, following a year-long market research study, Russia found that the potential of bilateral economic cooperation remains untapped. “Therefore, specific measures need to be taken to resolve problems facing the two business communities and promote bilateral cooperation” Boris Titov said.

Committed to further support and assistance for Russian companies, Deputy PM Dung expects new investment projects, cooperation programs and initiatives will be proposed to deepen Vietnam-Russia relations, making them more substantial, effective and sustainable.