Russian oil producer Gazprom Neft is to purchase a 49 percent stake in Vietnam's Dung Quat refinery, the country's only oil processing facility.

The company said that it has signed a series of agreements with state oil and gas group Petrovietnam to extend their collaboration.

The refinery is owned and operated by Binh Son Refining and Petrochemical company. Under plans to modernize the facility, its capacity will be increased from 6.5 million tons to 8.5 million tons per year. The efficiency of its technological processes will also be improved, enabling the plant to switch over to producing Euro-5 standard motor fuels. Gazprom Neft confirmed that its share of investment in the modernization project will be proportionate to its share in the plant.

Additionally, the parties have agreed to further collaborate on oil and gas exploration, production and development projects on the Pechora Sea shelf (at the Dolginskoye field and the Severo-Zapadnyi (North West) licensed block).

A dedicated working group of experts from both companies will be established, and by the end of October 2015 the parties will form a list of priority oil and gas fields and agree the basic terms of the partnership before further agreements are signed. These projects will be implemented through joint ventures of Gazprom Neft and Petrovietnam, with the stakes of each company to be negotiated.