Vietnam – Russian Federation: Cooperation in The Spirit of Friendship

There are many opening opportunities, so that the Russian Federation enterprises can come to explore and set up business in Vietnam and vice versa.

Previously, there is almost a constant law, that is only Vietnam come to promote investment abroad, now the story seems to be different. Japan has organized an investment promotion conference in Vietnam. And just recently, on March 2017, during a visit to Vietnam of Mr Yuri Trutnhev – Deputy Prime Minister, Russian Presidential Representative in the Far Eastern Federation, also held the same investment promotion workshop. There have been calls for Vietnamese businesses to invest in Russia, with many investment incentives.

In fact, in the last few years, Vietnam’s investment in Russia has increased rapidly, from 100 million USD in 2008 to about 2.4 billion USD in the recent times, concentrating mainly on oil and gas, trade, agriculture… Vietnam’s large investment projects in Russia include Rusvietpetro, Gazpromviet Petroleum Joint Venture, TH TRUE Milk, Ha Hoi Trade Center in Moscow.

Contrary to the trend of capital inflows from Vietnam to Russia have increased dramatically in recent years, investment flow from Russia to Vietnam is slowing. In the first 5 months of 2017, Russian businesses only invested 7.2 million USD in Vietnam. To sum up, the accumulated investment capital from Russia to Vietnam is currently about 1 billion USD.

The figure is modest and substantial, focusing on traditional projects which is oil and gas cooperation. Besides the Vietsovpetro Joint Venture, the two countries have established such joint ventures as Rusvietpetro, Vietgazprom and Gazpromviet to expand oil and gas cooperation in Vietnam, Russia and third countries.

In April 2017, a meeting between two leaders of Russia and Vietnam’s leading oil and gas corporation that are Gazprom and PVN, took place in Moscow. In which, both sides have continued to discuss on the cooperation to exploit oil and gas in Vietnam, as well as oil and gas projects in Russia.

In fact, Gazprom has participated in the Hai Thach – Moc Tinh gas field project in Vietnam since 2003 and up to now, the total output of this mine has reached about 6.6 billion m3 of gas. In particular, in 2016, the output reached 2 billion m3.

In addition, the two sides also discussed the process of geological exploration in plots 112 and 129 – 132 on the continental shelf of Vietnam, also deployed the project of developing oil – gas – condensate – Nagumanovskoye field and gas field – condensate Severo – Purovskoye in Russia, at the same time discussed the prospect of joint venture cooperation in the field of electrification and transport vehicles using natural gas (NGV). Once these agreements become reality, Vietnam – Russia oil and gas cooperation will be more closely and effectively, opening great investment cooperation opportunities between the two sides.

Opportunities will be even greater when the free trade agreement between Vietnam and the Eurasian Economic Union (includes Russia, Belarus, Kazakhstan, Amenia and Kyrgyzstan) is effectively implemented. Implemented effectively. Although it is just a free trade agreement, the agreement will create a great opportunity for two sides to cooperate and take advantage of each other’s markets. This common market block has total GDP of 2,200 billion USD and 183 million people. Moreover, Vietnam and the Eurasian Economic Union have also set target of increasing two-way trade to 10 billion USD by 2020. This is an important basis for investment cooperation between Vietnam and the Russian Federation, as well as other intra-regional economy will be further boosted.

The visit to Belarus and the Russian Federation from June 26th to July 1st 2017 by Vietnam President Tran Dai Quang is expected to create opportunities for further economic and investment cooperation between Vietnam – Russian Federation and Vietnam – Belarus.