Russian President Dmitry Medvedev and Prime Minister Vladimir Putin received Prime Minister of Vietnam Nguyen Tan Dung yesterday. Moscow and Hanoi both confirmed their intention to strengthen energy and finance collaboration, though no contracts have been signed. The meeting's main result was the opening of a "spin-off" of Vietnam-Russia Joint Venture Bank in Moscow. As a source in the Russian government pointed out, this should put small and medium-sized business transactions on a "civilised track".
PM Nguyen Tan Dung is the country's third highest ranking figure after General Secretary of the Communist Party of Vietnam Nong Duc Manh and President Nguyen Minh Triet. "Despite the financial crisis, our relations remain strong. Trade is growing and we've set up a number of big projects in various directions, both traditional and new ones," the Russian president said upon Nguyen Tan Dung's arrival.
And it couldn't be more accurate. According to the Russian Economic Development Ministry, in the first nine months of 2009, the sales volumes between the two countries rose by 4.1% to $1.16 billion. In the talks at the Kremlin, Medvedev mentioned converting to national currency transactions for bilateral trading. As our source indicated, a conversion technically would be possible, considering that the relevant protocol was signed back on September 14 in Rostov at a session of the Russian-Vietnamese working group on interbank partnership within the interstate commission.
A whole stack of energy agreements was signed in the White House during the negotiations. For one, Gazprom and PetroVietnam signed an agreement on strategic partnership. Furthermore, Inter RAO UES and PetroVietnam signed a memorandum on energy cooperation. Gazprom has been operating in Vietnam since September 2000, when it obtained block 112 of the country's continental shelf in the Gulf of Tonkin. Then, in August 2007, Gazprom discovered that the block contained industrial volumes of natural gas and gas condensate. Yet, according to the managers of the gas monopoly, a cost-effective production scheme has not yet been arranged because of the project's size. Last May, VietGazprom, a joint company of Gazprom and PetroVietnam, was granted a license for shelf blocks 129, 130, 131 and 132. Another joint venture, GazpromViet (51% owned by Russia), obtained Nagumanovskoye field in the Orenburg region.
Inter RAO UES spokesperson Boris Zverev specified that the memorandum signed by the company outlines the construction of two power plants in Vietnam and one in Laos with a total capacity of 3,600 milli-watts. "After signing the memo, we'll start looking into the project's feasibility, and then we can be more definite about our presence there," Zverev told Reuters. Our source in the company reported that the projects are currently in their initial stage.
The financial portfolio for the agreements also turned out to be quite big. VTB and the Bank for Investment and Development of Vietnam (BIDV) signed a memorandum on launching an investment fund. On December 14, the opening of the Moscow affiliate of Vietnam-Russia Joint Venture Bank marked a major step towards financial partnership. Nguyen Tan Dung attended the opening ceremony. Vietnam-Russia Bank holds registered assets of 210 million rubles (51% owned by BIDV, 49% owned by VTB). The bank's target audience is small and medium-sized Vietnamese companies trading in Russia. "The bank's goal is to finance imports and exports and process international transactions", the government source informed Kommersant. "The new bank should put trading transactions on a "civilised track" in order to prevent shadow transaction schemes like those so often seen in the Cherkizovsky market."
Alexander Gabuyev