Last week’s news that America’s 3rd largest oil company is selling its Vietnam business to a French firm could be ominous for US-Vietnam business and investing. It suggests ConocoPhillips may have come to the conclusion, after 15 years, that the reality of doing business in Vietnam doesn’t match the promise.
Houston-based Conoco announced it will sell its Vietnam operations — which produce 20,000 barrels of oil daily and include a 16% interest in a pipeline –for $1.29 billion to Paris-based Perenco. The sale is said to be part of Conoco’s long-term strategy to make itself more profitable by unloading up to $20 billion less profitable businesses.
Why would a huge American oil company abandon Vietnam, one of the world’s fastest growing economies? Perhaps it found that Vietnam represented more promise than performance — and like some other American investors the company could have been frustrated after unsuccessful efforts to make a healthy profit there.
As with many other Asian countries, American businesses tend to be challenged dealing with Vietnamese business culture and navigating what — from a Western perspective — can seem like arcane rules and shifting sands. ConocoPhillips and several other large American corporations have made big bets on Vietnam, and for this one that commitment apparently didn’t pay off soon enough.
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