The Vietnamese government has selected southern Ba Ria Vung Tau as location for Vietnam's third oil refinery, and allowed foreign participation in its construction, according to local newspaper Youth on Wednesday.

The government has permitted the implementation of the third oil refinery project under the mode of joint venture between local and foreign partners, or wholly foreign-owned, or domestic-backed investment. The project's investor has the rights to propose the government change the location to either southern Ninh Thuan province or central Phu Yen province.

The government has assigned the Ministry of Planning and Investment and relevant agencies to appraise the third oil refinery project, and then make reports to the government for approval. Details about the project have not been revealed.

The construction of Vietnam's first oil refinery using domestic investment started in central Quang Ngai province in November 2005. Capitalized at some 2.5 billion U.S. dollars and expected to become operational in late 2008 or early 2009, the Dung Quat refinery with an annual refining capacity of 6.5 million tons of crude oil is of significance in ensuring energy for the country, which is a crude oil exporter, but petroleum product importer.

Vietnam is making preparation for the construction of its second oil refinery named Nghi Son in central Thanh Hoa province. Investment for and capacity of Nghi Son is smaller than those of Dung Quat.

Vietnam imported over 7.7 million tons of petroleum products worth nearly 4.2 billion dollars in the first eight months of this year, down 3.8 percent in volume but up 25 percent in value against the same period last year, according to the country's General Statistics Office.

In the eight-month period, Vietnam exported more than 11.1 million tons of crude oil totaling nearly 5.8 billion dollars, down 6.5 percent in volume but up 20.3 percent in value.

Source: Xinhua