Nghi Son Refinery Achieves Profitability After Years of Losses, Operating at Full Capacity
June 12, 2026, marks a significant milestone in Vietnam's energy sector as leadership from Idemitsu Kosan confirmed that the Nghi Son Refinery and Petrochemical (NSRP) has begun generating profits in Q1 2026 while operating at 100% capacity.
This information was disclosed during a working meeting between Deputy Minister of Foreign Affairs Nguyen Minh Vu and Atsuhiko Hirano, Representative Director and Vice President of Idemitsu Kosan. After years facing financial pressures, high interest costs, global oil price volatility, and impacts from the COVID-19 pandemic, the transition from loss to profitability is viewed as a positive signal for Vietnam's entire energy supply chain.
Strategic Importance of Nghi Son
Nghi Son stands as one of Vietnam's largest energy projects and holds particular significance for national energy security. The facility plays a crucial role in meeting domestic demand and reducing dependence on imported refined petroleum products.
| Parameter | Value |
|---|---|
| Total Investment | Approximately $9 billion |
| Design Capacity | 200,000 barrels per day |
| Annual Production | Approximately 10 million tons |
| Domestic Demand Coverage | 35% - 40% |
| Commercial Operation Start | November 2018 |
| Location | Nghi Son Economic Zone, Thanh Hoa Province |
At an exchange rate of approximately 26,000 VND/USD, the total investment in the project is equivalent to about 234,000 billion VND.
Ownership Structure
The Nghi Son Refinery features a consortium of international and domestic energy companies, bringing together technological expertise, governance experience, and raw material supply capabilities.
| Shareholder | Ownership Percentage |
|---|---|
| Idemitsu Kosan (Japan) | 35.1% |
| Kuwait Petroleum International | 35.1% |
| Vietnam National Oil and Gas Group (PVN) | 25.1% |
| Mitsui Chemicals | 4.7% |
Why This Profitability Matters
For many years, Nghi Son has been in the spotlight due to its prolonged losses. The main contributing factors included:
- Global oil price volatility
- High interest costs on loans
- High debt-to-equity ratio
- Declining refining profit margins
- High operating costs in initial phases
- Impacts of the COVID-19 pandemic
Even in the fiscal year ending March 2025, Idemitsu Kosan reported unfavorable business results at the project due to low profit margins on finished products. The shift to profitability in Q1 2026 indicates that restructuring measures, operational optimization, and cost control have begun to yield positive results.
Secured Crude Oil Supply
One of the most critical aspects has been securing the raw material supply. According to Idemitsu Kosan leadership, crude oil supplies have been secured, and the refinery is maintaining stable operations at maximum capacity. This is particularly important given the current global energy market pressures from Middle East geopolitical tensions, the risk of shipping disruptions through the Strait of Hormuz, and increasingly fierce competition for crude oil supplies.
Key Products
The Nghi Son Refinery produces a diverse range of essential products:
- Motor gasoline
- Diesel fuel
- Aviation fuel
- Polypropylene
- Paraxylene
These products all play vital roles in Vietnam's industry, transportation, and consumption sectors.
Impact on Vietnam's Fuel Market
The operational status of Nghi Son directly impacts Vietnam's energy market:
| Scenario | Potential Impact |
|---|---|
| Stable Nghi Sơn Operations | Domestic supply guaranteed |
| Nghi Sơn Capacity Reduction | Risk of localized shortages |
| Extended Nghi Sơn Maintenance Shutdown | Increased need for imports |
| Sustainable Nghi Sơn Profitability | Reduced financial support pressure |
With the ability to meet up to 40% of Vietnam's domestic fuel demand, any fluctuations at Nghi Son can directly affect the country's energy market.
Remaining Challenges
Despite achieving profitability, the project still needs to address several important challenges:
- Continued financial restructuring
- Diversification of crude oil sources
- Reducing dependence on a single supplying region
- Improving cost management efficiency
- Enhancing petrochemical product value
- Expansion into green energy
The Vietnamese government has repeatedly requested enterprises to develop comprehensive restructuring plans to ensure long-term effectiveness.
Conclusion
The Nghi Son Refinery's first profit reporting after years of difficulties is not just the story of a 234,000 billion VND enterprise but also a positive signal for national energy security. In a world continuously facing oil supply shocks, a refinery meeting 40% of the country's domestic fuel demand operating stably and profitably will help Vietnam be more proactive in responding to global fluctuations.
As geopolitical tensions in the Middle East persist and global energy markets remain volatile, the successful operation of Nghi Son represents a significant achievement in Vietnam's quest for energy independence and security.