Equinor to close Hanoi office after halting Vietnam offshore wind plans

A company spokesperson revealed that Norway's state controlled energy giant Equinor had cancelled plans to invest into Vietnam's offshore sector. This is a blow for Vietnam's green power aspirations.

According to the World Bank Group's report, Vietnam has drawn international attention to its renewable energy plans due to its strong wind in shallow water near densely populated coastal areas. However, delays in regulatory reforms recently have prompted some potential investors to reconsider their plans.

Magnus Frantzen Eidevold, a spokesperson for Equinor, stated in an interview that "we have decided to discontinue the development of our business in Vietnam and close our office at Hanoi."

This is the first time Equinor closes an international office focusing on offshore wind.

In the past few years, the company has exited over a dozen countries in which it operated oil and gas operations to focus on low-carbon and renewable systems.

Equinor's departure is a blow to Vietnam, after Danish offshore company Orsted, a major player in this industry, announced last year that it would suspend its plans to invest large offshore wind farms.

Vietnam does not have any offshore wind projects, but it wants to install 6 gigawatts (GW) of wind farms by 2030. This is 4% of the planned capacity. It's part of a plan to reduce coal emissions and achieve net zero by the middle century.

The country's reforms and projects have been paralysed by recent political turmoil.

Vietnamese authorities also consider the industry sensitive because it involves projects in the South China Sea. This is a vital shipping waterway, which Beijing claims nearly in its entirety.

The ministry of industry in the Communist-ruled nation is pushing for the state-owned firms to be assigned the first offshore wind pilot project. Foreign investors have said that this move would slow the development of the sector because domestic companies do not have enough capabilities.

The Vietnamese Industry Ministry did not respond immediately to a comment request.

Due to regulatory obstacles, two offshore executives in Vietnam, who declined to be identified because they weren't authorised to talk to the media, stated that the country could only install 1 GW by the end decade.

The government is in the process of convincing a foreign partner that they can co-develop a pilot project.

Eidsvold stated that Equinor decided to leave Vietnam following a review of its renewable assets portfolio.

He added that the offshore wind sector is facing a lot of headwinds and that we must be disciplined with our approach.

According to Equinor’s website, Equinor will open a representative office at Hanoi in the capital of Vietnam in May 2022. The nation, which has a population of 100,000,000, is described as having "high potential" to be an “interesting growth market for offshore winds”.

The website stated that "the country has some of the best wind resources available in Asia." Reporting by Francesco Guarascio and Nerijus Adomiaitis, with additional reporting by Khanh Vu and Louis Heavens in Hanoi.

(source: Reuters)