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| Representatives of PetroVietnam and three foreign banks sign the ISDA agreements in Hanoi on Thursday - Photo: Thanh Huong |
HANOI – PetroVietnam on Thursday signed three agreements with BNP Paribas, Sumitomo Mitsui Banking and Standard Chartered Bank in Hanoi to set up principles for future derivatives transactions as a way to hedge against risks of forex rates and commodities prices among others.
The national oil and gas group said the contracts signed were a protocol of ISDA Master Agreement 2002 compiled by the International Swaps and Derivatives Association, Inc.
Nguyen Tien Dung, deputy general director of PetroVietnam, said the signing would help the group limit negative impacts from forex changes, prevent risks in terms of interest rate, exchange rate, and commodity prices and diversify the group’s financial activities.
The use of derivatives tools would enable PetroVietnam to meet the huge need of large capital for its projects, as well as save costs and time in financial management.
ISDA is the largest international commercial financial institution worldwide in terms of the number of members. Signing an ISDA Master agreement is a must for all sides before conducting any derivatives transaction for standardization of legal procedures. All parties in an ISDA agreement do not need to study many procedures to save cost and time whenever there is a derivatives transaction among them.
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