Decree 45/2023/ND-CP detailing the Law on Oil and Gas

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Decree No. 45/2023/ND-CP dated July 01, 2023 of the Government detailing a number of articles of the Law on Oil and Gas

Issuing body:	Government	Effective date:	Known Please log in to a subscriber account to use this function. Don’t have an account? Register here
Official number:	45/2023/ND-CP	Signer:	Tran Hong Ha
Type:	Decree	Expiry date:	Updating
Issuing date:	01/07/2023	Effect status:	Known Please log in to a subscriber account to use this function. Don’t have an account? Register here
Fields:	Industry , Natural Resources - Environment

SUMMARY

3 criteria for selection of contractors to sign oil and gas contract

On July 01, 2023, the Government issues Decree No. 45/2023/ND-CP detailing a number of articles of the Law on Oil and Gas.

1. 3 criteria for selection of contractors to sign oil and gas contract:

- Criteria on the contractor’s capacity and experience, including: technical and financial capacity, ability to arrange capital to conduct oil and gas activities; experience in performing oil and gas activities or contracts, etc.;

- Criteria on technical conditions suitable to each oil and gas block, including: minimum work commitment; commitment to field development and exploitation; deployment plans and optimal technology for oil and gas activities, etc.;

- Criteria on economic conditions suitable for each oil and gas block, including: The ratio of oil and gas divided as profits to the host country; proportion of participating interests of the host country; cost recovery rate, etc.

2. The appraisal of results of the selection of contractors to sign oil and gas contracts covers:

- Evaluation of the basis for the organization of contractor selection;

- Assessment of the compliance with time regulations during contractor selection;

- Assessment of the suitability of evaluation methods and contractor selection criteria;

- Assessment of the compliance with the law during the evaluation of bid dossiers, competitive offer dossiers or dossiers of proposals;

- Consideration of different opinions (if any) of the expert group;

- Other relevant contents.

3. The contractor must return the area not less than 20% of the original oil and gas contract area at the end of each component phase of the oil and gas prospecting period, other than the oil and gas field development areas and the area that he/she/it is allowed to retain or his/her/its performance of the obligation to return is suspended.

This Decree takes effect from July 1, 2023.

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Effect status: Known

THE GOVERNMENT		THE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness
No. 45/2023/ND-CP		Hanoi, July 1, 2023

DECREE

Detailing a number of articles of the Law on Oil and Gas^{^[1]}

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

Pursuant to the November 14, 2022 Law on Oil and Gas;

At the proposal of the Minister of Industry and Trade;

The Government promulgates the Decree detailing a number of articles of the Law on Oil and Gas.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Decree details a number of articles of the Law on Oil and Gas on basic oil and gas investigation; the list of oil and gas blocks; selection of contractors for signing oil and gas contracts; oil and gas contracts; safety in oil and gas activities; dossiers, order and procedures for organization of oil and gas activities and implementation of oil and gas projects; incentives for oil and gas activities; enhanced oil recovery of oil and gas fields, field clusters and blocks; account-finalization of costs of oil and gas activities within the mainland, islands and seas of the Socialist Republic of Vietnam.

2. This Decree applies to Vietnamese and foreign agencies, organizations and individuals involved in basic oil and gas investigation and oil and gas activities in Vietnam.

Article 2. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Bidder means an organization or individual that registers to participate in the process of selection of contractors to sign an oil and gas contract.

2. E-dossier means a dossier comprising electronic versions of the documents in the original dossier, except confidential documents under regulations.

3. Original dossier means a dossier comprising documents and papers that are primary-source documents, original documents or valid copies. Primary-source documents and papers in foreign languages must be consularly legalized, except cases exempt from consular legalization in accordance with Vietnam’s laws and treaties to which Vietnam is a contracting party.

4. Minimum work commitment and minimum financial commitment means the minimum work volume and minimum sum of money committed by a contractor to undertake and pay within a period of time stated in an oil and gas contract.

5. Valid dossier means a dossier comprising all papers and documents specified in the Law on Oil and Gas and this Decree.

6. Profit oil and profit gas sharing ratio means determined proportions of products to be shared among related parties based on the output scale following the distribution of products for royalty payment and cost recovery as agreed upon in an oil and gas contract.

Chapter II

BASIC OIL AND GAS INVESTIGATION

Article 3. Formulation and approval of the list of basic oil and gas investigation schemes

1. The list of basic oil and gas investigation schemes shall be formulated and approved for every 5-year period in conformity with energy and mineral resource strategies and master plans and plans on implementation of such master plans; and annually reviewed and updated.

2. Before March 1^st of the last year of every 5-year socio-economic development period under the National Assembly’s resolutions, organizations that satisfy the conditions specified in Article 12 of the Law on Oil and Gas and Article 4 of this Decree shall send proposals on basic oil and gas investigations schemes for the subsequent 5-year socio-economic development period to the Vietnam Oil and Gas Group for the latter to consider, assess and sum-up these proposals and propose a list of basic oil and gas investigation schemes, including also those to be implemented by the Vietnam Oil and Gas Group and state agencies.

3. Before May 1^st of the last year of every 5-year socio-economic development period under the National Assembly’s resolutions, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 2 dossiers of proposal of a list of basic oil and gas investigation schemes (including 1 original dossier and 1 dossier comprising copies thereof). Such a dossier must comprise:

a/ The Vietnam Oil and Gas Group’s written proposal of the list of basic oil and gas investigation schemes;

b/ Documents of organizations proposing basic oil and gas investigation schemes, including: principal contents of such schemes as specified in Clause 1, Article 10 of the Law on Oil and Gas; documents proving the satisfaction of conditions for implementation of such schemes specified in Article 12 of the Law on Oil and Gas and Article 4 of this Decree; preliminary plans on coordination with related organization and individuals in case basic oil and gas investigation schemes are proposed to be implemented in areas already assigned for or currently undergoing basic geological surveys of minerals or mineral exploration or exploitation in accordance with the mineral law;

c/ The Vietnam Oil and Gas Group’s evaluation of the dossier of each scheme; written explanations of scheme-proposing organizations (if any);

d/ Other relevant documents.

4. Within 5 working day after receiving valid dossiers, the Ministry of Industry and Trade shall send it to the Ministry of Natural Resources and Environment, Ministry of Planning and Investment, Ministry of Finance, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Ministry of Transport, and related ministries, sectors and localities for their opinions.

5. Within 15 days after receiving the dossiers sent from the Ministry of Industry and Trade for their opinions, the aforementioned ministries, sectors and localities shall give their written opinions on contents falling under their state management to the Ministry of Industry and Trade.

6. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the evaluation and finalize and submit the list of basic oil and gas investigation schemes to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report-cum-written request to the Prime Minister for approval of the list of basic oil and gas investigation schemes;

b/ The dossier specified in Clause 3 of this Article;

c/ A report on assimilation and explanation of ministries’ and sectors’ opinions and copies of written opinions of ministries and sectors.

7. Based on the list of basic oil and gas investigation schemes approved by the Prime Minister:

a/ The Ministry of Industry and Trade shall notify thereof to agencies and organizations assuming the prime responsibility for scheme implementation for the latter to formulate and submit detailed outlines and cost estimates of these schemes under Article 5 of this Decree and, at the same time, notify such to the Vietnam Oil and Gas Group;

b/ The Ministry of Finance shall assume the prime responsibility for including basic oil and gas investigation scheme implementation costs funded by the state budget in annual state budget estimates, then report them to the Government for submission to the National Assembly in accordance with the Law on the State Budget.

8. Annually, the Vietnam Oil and Gas Group shall review the list of basic oil and gas investigation schemes and the status of implementation of each scheme for reporting to the Ministry of Industry and Trade and proposing the Prime Minister to approve the modified list of basic oil and gas investigation schemes (when necessary). The dossier, order and procedures for appraising and approving the modified list of basic oil and gas investigation schemes must comply with Clauses 3, 4, 5 and 6 of this Article.

Article 4. Conditions of organizations assuming the prime responsibility for conducting basic oil and gas investigation

An organization assuming the prime responsibility for conducting basic oil and gas investigation must have adequate financial and technical capabilities and experience in basic oil and gas investigation, and fully satisfy the following conditions:

1. Being able to prove that it is financially capable of implementing a basic oil and gas investigation scheme in either or both of the following forms:

a/ Self-arrangement with its own resources or guarantee by its parent company;

b/ Financial aid or funding allocation guarantee or commitment by a credit institution or financial institution.

2. Having plans on mobilization of machinery, equipment and manpower to meet technical requirements for scheme implementation.

3. Having participated in at least 1 basic oil and gas investigation scheme or 1 scheme on basic geological survey of minerals or 1 oil and gas contract.

4. Having made a commitment to fulfill national defense and security requirements in accordance with law and not being banned from carrying out basic oil and gas investigation activities and oil and gas activities.

Article 5. Dossiers, order and procedures for appraisal and approval of detailed outlines and cost estimates of basic oil and gas investigation schemes

1. A detailed outline and cost estimates of a basic oil and gas investigation scheme must have the following principal contents:

a/ Legal grounds and scientific grounds for the scheme formulation;

b/ Area where the basic investigation is to be carried out (geographical location, coordinates and area subject to investigation);

c/ Natural geographical and socio-economic characteristics of the area where the basic investigation is to be carried out;

d/ Technical documents for the scheme formulation;

dd/ Subjects, objectives and tasks of the scheme;

e/ Technical method(s) and work volume to be performed; standards, technical regulations, and technical and economic norms (if any) expected to be applied in the course of scheme implementation;

g/ Expected outcomes and products to be obtained upon the scheme completion;

h/ Implementation plan and schedule;

i/ Funding source(s) and cost estimates;

k/ Plan on coordination with related organizations and individuals in case the basic oil and gas investigation scheme is proposed to be implemented in an area where the basic geological survey, exploration or exploitation of minerals has been assigned or is being carried out in accordance with the mineral law.

l/ Other contents (if any).

2. Within 60 days after receiving the Ministry of Industry and Trade’s notice specified at Point a, Clause 7, Article 3 of this Decree, based on the detailed outline and cost estimates of the basic oil and gas investigation scheme made by the organization assuming the prime responsibility for scheme implementation on which the Vietnam Oil and Gas Group has given opinions, the organization assuming the prime responsibility for scheme implementation shall submit to the Ministry of Industry and Trade 2 dossiers of request for approval of the detailed outline and cost estimates of the scheme (1 original dossier and 1 dossier comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A written request for approval of the detailed outline and cost estimates of the basic oil and gas investigation scheme;

b/ Detailed outline and cost estimates of the scheme as specified in Clause 1 of this Article; appendices, drawings and enclosed documents (if any);

c/ The Ministry of Industry and Trade’s notice sent to the organization assuming the prime responsibility for scheme implementation;

d/ Document determining the scheme funding source in case the scheme implementation fund comes from the state budget in conformity with allocation principles, criteria and norms in each period approved by the competent agency;

dd/ Draft agreement between the Vietnam Oil and Gas Group and the organization other than a state agency or enterprise assuming the prime responsibility for scheme implementation in the case specified at Point b, Clause 3, Article 10 of the Law on Oil and Gas, which must have the following principal contents: The area where the investigation is to be carried out; rights and obligations of the Vietnam Oil and Gas Group and the organization in the course of scheme implementation; commitment of the organization on storage and preservation of samples, documents, information and data in the course of scheme implementation; and general terms and clauses of the agreement;

g/ Other relevant documents.

3. The appraisal of detailed outlines and cost estimates of basic oil and gas investigation schemes shall be carried out by an appraisal council. The Minister of Industry and Trade shall issue a decision on establishment and operation regulation of the appraisal council (composed of representatives of related ministries and sectors) and group of experts assisting the appraisal council.

4. Within 45 days after receiving a valid dossier, the appraisal council shall complete appraising the detailed outline and cost estimates of the basic oil and gas investigation scheme, then submit them to the Minister of Industry and Trade for consideration and approval.

5. Within 5 working days after receiving an appraisal document of the appraisal council, the Minister of Industry and Trade shall issue a decision approving the detailed outline and cost estimates of the basic oil and gas investigation scheme.

Article 6. Organization of implementation of basic oil and gas investigation schemes

1. Organizations assuming the prime responsibility for implementing basic oil and gas investigation schemes shall:

a/ Implement approved schemes;

b/ Notify in writing to the Ministry of Industry and Trade, Ministry of Natural Resources and Environment, Ministry of Transport, Ministry of National Defense, Ministry of Public Security, Ministry of Foreign Affairs, concerned provincial-level People’s Committees, and the Vietnam Oil and Gas Group at least 15 days before performing specific jobs at site.

2. In the course of implementation of basic oil and gas investigation schemes, if discovering other natural resources or minerals, organizations and individuals shall immediately report thereon in writting to the Ministry of Industry and Trade, Ministry of Natural Resources and Environment, provincial-level People’s Committees of localities where the investigation is carried out, and the Vietnam Oil and Gas Group and protect unexploited minerals in accordance with the mineral law; acts of abusing basic oil and gas investigation to exploit minerals are strictly prohibited.

3. In the course of implementation of basic oil and gas investigation schemes, organizations assuming the prime responsibility for scheme implementation may propose the modification of detailed outlines and cost estimates of such schemes to suit the practical situation upon the organization of scheme implementation at site. Organizations assuming the prime responsibility for scheme implementation shall propose in writing the modification of detailed outlines and cost estimates of their schemes, clearly stating the implementation progress and performed work volume, scheme modification reasons and proposals, to the Vietnam Oil and Gas Group for consideration, evaluation and reporting to the Ministry of Industry and Trade for approval according to similar procedures specified in Clauses 3, 4 and 5, Article 5 of this Decree.

Article 7. Examination and monitoring of the implementation of basic oil and gas investigation schemes

1. On a quarterly basis (before the last working day of the last month of every quarter) or upon irregular requests of the Ministry of Industry and Trade, organizations assuming the prime responsibility for implementation of basic oil and gas investigation schemes shall send reports on the status of implementation of such schemes to the Ministry of Industry and Trade and the Vietnam Oil and Gas Group for monitoring.

2. The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with related ministries, sectors and localities and the Vietnam Oil and Gas Group in, or assign the Vietnam Oil and Gas Group to assume the prime responsibility for, examining the status of implementation of basic oil and gas investigation schemes under plans and examination contents approved by the Minister of Industry and Trade.

3. The Vietnam Oil and Gas Group shall coordinate with functional agencies and units of related ministries, sectors and localities in organizing at-site monitoring of basic oil and gas investigation schemes.

Article 8. Pre-acceptance testing and approval of outcomes of basic oil and gas investigation schemes

1. Pre-acceptance testing of outcomes of a basic oil and gas investigation scheme covers the following principal activities:

a/ Evaluating the volume, quality and progress of performance of specific jobs according to the approved detailed outline;

b/ Evaluating the compliance with technical regulations and truthfulness of the collection of data and compilation of documents; accuracy and scientificity of the data analysis, processing and summarization;

c/ Evaluating the reliability of investigation results; petro-geological findings (if any); conclusions on geological, geophysical and other technical characteristics of investigated subjects;

d/ Evaluating the implementation of financial regimes and current regulations, economic and technical norms and unit prices;

dd/ Appraising expenditure items covered by the state budget (if any) and expenditure items of the Vietnam Oil and Gas Group (if any);

e/ Evaluating the implementation of agreements between the Vietnam Oil and Gas Group and organizations other than state agencies and enterprises assuming the prime responsibility for scheme implementation, for the case specified at Point b, Clause 3, Article 10 of the Law on Oil and Gas.

2. Pre-acceptance testing of outcomes of a basic oil and gas investigation scheme shall be carried at two levels, including grassroots pre-acceptance testing and ministerial-level pre-acceptance testing, specifically as follows:

a/ Grassroots pre-acceptance testing shall be carried out by the organization assuming the prime responsibility for scheme implementation;

b/ Ministerial-level pre-acceptance testing shall be carried out by the Ministry of Industry and Trade after obtaining grassroots pre-accepting testing results. The ministerial-level pre-acceptance testing council shall be established under the Minister of Industry and Trade’s decision. Ministerial-level pre-acceptance testing results serve as a basis for approval of outcomes of the basic oil and gas investigation scheme.

3. Within 30 days after a basic oil and gas investigation scheme is finished, the organization assuming the prime responsibility for scheme implementation shall organize the grassroots pre-acceptance testing thereof.

4. Within 45 days after completing a grassroots pre-acceptance testing, after collecting opinions of the Vietnam Oil and Gas Group on outcomes of a basic oil and gas investigation scheme, the organization assuming the prime responsibility for implementation of such basic oil and gas investigation shall submit to the Ministry of Industry and Trade 2 dossiers of request for ministerial-level pre-acceptance testing and approval of outcomes of the scheme outcomes (1 original dossier and 1 dossier comprising copies thereof, to be hand-delivered or sent by post). The dossier must comprise:

a/ A written request for ministerial-level pre-acceptance testing and approval of the scheme outcomes;

b/ A report on the scheme outcomes; appendices, drawings and other enclosed documents;

c/ A summary report on the scheme outcomes;

d/ An examination report of consultants hired by the organization assuming the prime responsibility for scheme implementation (if necessary);

dd/ The grassroots pre-acceptance testing minutes;

e/ Opinions of the Vietnam Oil and Gas Group on scheme implementation results; document on opinion assimilation and explanation of the organization assuming the prime responsibility for scheme implementation (if any);

g/ The competent agency’s scheme or modified scheme approval decision;

h/ Other relevant documents.

5. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the pre-acceptance testing and approve results of the basic oil and gas investigation scheme.

6. Within 180 days after receiving the written approval of the outcomes of its basic oil and gas investigation scheme, the organization assuming the prime responsibility for scheme implementation shall complete the account-finalization of scheme implementation costs under regulations, then send to the Ministry of Industry and Trade a report on account-finalization of expenditure items covered by the state budget (if any) and expenditure items of the Vietnam Oil and Gas Group (if any) for consideration and approval.

Article 9. Submission of outcomes of basic oil and gas investigation

1. Within 60 days after receiving a written approval of the outcomes of its basic oil and gas investigation scheme, the organization assuming the prime responsibility for scheme implementation shall transfer specimens (if any) to the Vietnam Oil and Gas Group for storage and preservation, and at the same time submit to the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment and the Vietnam Oil and Gas Group 1 paper dossier and 1 e-dossier of reporting on basic oil and gas investigation outcomes (excluding confidential documents as specified by law, if any), comprising general documents and primary-source documents, specifically as follows:

a/ General documents include written explanations and general documents presented in the form of appendices, maps, illustration pictures fully showing investigation outcomes;

b/ Primary-source documents means documents collected at site, including diaries, field books, maps of all kinds, photos, magnetic tapes recording seismic events, and disks; and measurement results.

2. Within 60 days after receiving a dossier of reporting on basic oil and gas investigation outcomes, the Ministry of Natural Resources and Environment shall update basic oil and gas investigation information and outcomes into the national database on geology and minerals (except information required to be managed as confidential information).

Article 10. Preservation of specimens, documents, information and data on basic oil and gas investigation outcomes

1. The period of storage and preservation shall be determined for each type of specimen, document, information and data according to current regulations, which may be perpetual or definite-term. The storing and preserving agency shall make and submit statistics on specimens, documents, information and data that are no longer useful to a competent agency for approval of the destruction thereof in order to optimize management expenses.

2. Specimens, documents, information and data shall be classified into different levels of confidentiality (if so requested) and subject to corresponding information safety protection policies in accordance with law.

3. The Vietnam Oil and Gas Group shall receive and manage specimens and documents submitted by organizations assuming the prime responsibility for implementation of basic oil and gas investigation schemes under Clause 1, Article 14 of the Law on Oil and Gas and organize the system operation in order to exploit and use received information and documents in accordance with law.

Article 11. Exploitation and use of specimens and documents, information, data and reports on basic oil and gas investigation outcomes

1. Organizations and individuals may get access or make reference to, exploit and use, specimens and documents, information, data and reports on basic oil and gas investigation outcomes in the form of using public services and paying the oil and gas document exploitation and use charge in accordance with the law on charges and fees, except the case specified in Clause 2 of this Article.

2. Organizations assuming the prime responsibility for implementation of basic oil and gas investigation schemes may use and exploit specimens and documents, information, data and reports on basic oil and gas investigation outcomes under agreements signed with the Vietnam Oil and Gas Group; and may propose cost recovery when participating in bidding for, and signing of, oil and gas contracts for oil and gas blocks in the areas where basic oil and gas investigation has been carried out under such schemes.

Chapter III

LIST OF OIL AND GAS BLOCKS AND SELECTION OF CONTRACTORS FOR SIGNING OIL AND GAS CONTRACTS

Article 12. Dossiers, order and procedures for appraisal and approval of the list of oil and gas blocks

1. In pursuance to Article 7 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall draw up a list of new oil and gas blocks or list of adjusted oil and gas blocks and submit to the Ministry of Industry and Trade 2 dossiers (including 1 original dossier and 1 dossier comprising copies thereof, to be hand-delivered or sent by post) for appraisal. Such a dossier must comprise:

a/ A report-cum-request for approval of the list of new oil and gas blocks or list of adjusted oil and gas blocks;

b/ Information on newly formed oil and gas blocks or on adjustment of oil and gas blocks, including names, coordinates and areas of such blocks;

c/ Other relevant documents.

2. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send such dossiers to the Ministry of Natural Resources and Environment, Ministry of Planning and Investment, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Ministry of Transport, Ministry of Construction and related ministries, sectors and localities for their opinions.

3. Within 15 days after receiving dossiers from the Ministry of Industry and Trade for collection of their opinions, the above ministries, sectors and localities shall send their written opinions on the contents falling under their state management to the Ministry of Industry and Trade.

4. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete appraising and finalizing the list of new oil and gas blocks or list of adjusted oil and gas blocks, then submit it to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of the list of new oil and gas blocks or list of adjusted oil and gas blocks;

b/ The documents specified in Clause 1 of this Article.

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of written opinions of ministries and sectors.

Article 13. Dossiers, order and procedures for appraisal and approval of plans on selection of contractors for signing oil and gas contracts

1. In pursuance to Point a, Clause 1, Article 24 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall make a plan on selection of contractors for signing oil and gas contracts, then submit to the Ministry of Industry and Trade 2 dossiers (including 1 original dossier and 1 dossier comprising copies thereof, to be hand-delivered or sent by post) for appraisal. Such a dossier must comprise:

a/ A report-cum-request for approval of the plan on selection of contractors for signing oil and gas contracts;

b/ The plan on selection of contractors for signing oil and gas contracts, having the principal contents specified in Clause 2, Article 17 of the Law on Oil and Gas and reason(s); reason(s) for proposing the form of contractor selection corresponding to each oil and gas block to be opened; the list of contractors proposed to be invited to the bidding, for restricted bidding or competitive offer; applied oil and gas contract type and reason(s) for proposing such contract type; conditions on financial and technical capacity and experience for bidding participation; the draft bidding dossier, competitive offer invitation dossier or contractor appointment proposal dossier as specified at Points a and b, Clause 1, Article 21 of the Law on Oil and Gas;

c/ Other relevant documents.

2. The appraisal of a plan on selection of contractors for signing oil and gas contracts covers examining and evaluating principal contents of such plan specified in Clause 2, Article 17 of the Law on Oil and Gas.

4. Within 15 days after receiving dossiers sent from the Ministry of Industry and Trade for their opinions, the above ministries and sectors shall give their written opinions on the contents falling under their state management to the Ministry of Industry and Trade.

5. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the plan on selection of contractors for signing oil and gas contracts for submission to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report on appraisal results to the Prime Minister and a request for approval of the plan on selection of contractors for signing oil and gas contracts;

b/ The documents specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of the written opinions of ministries and sectors.

6. This Article is not applicable to cases of contractor appointment specified in Clause 2, Article 40 of the Law on Oil and Gas.

Article 14. Bidding notices and competitive offer invitation notices

1. A bidding notice shall be published on 5 dailies for 5 consecutive days and on 5 prestigious webpages, including at least 1 English newspaper published on the domestic or foreign information network in Vietnamese or English. Such a bidding notice may also be hand-delivered to organizations and individuals that are interested in oil and gas blocks on the bidding list or published on webpages specialized in providing information on oil and gas events in the world.

2. A competitive offer invitation notice shall be hand-delivered to organizations and individuals that are interested in oil and gas blocks eligible for the application of the form of competitive offer.

3. A bidding notice or competitive offer invitation notice must have the following contents:

a/ Information on the oil and gas block opened for bidding or competitive offer invitation;

b/ List of accessible documents and other relevant information;

c/ Period of document reference;

d/ Relevant dossiers and forms (if any).

Article 15. Bid registration

1. Bidders shall send their bid registrations to the Vietnam Oil and Gas Group. The registration time limit is 45 days from the last day of publishing the bidding notice or notifying the competitive offer invitation.

2. When making bid registration, bidders shall provide summary information on their financial and technical capacity, plan on formation of contractor consortium (if any) and other information as requested in bidding notices or competitive offer invitation notices.

3. After their bid registrations are received, bidders that satisfy the conditions specified in Article 16 of the Law on Oil and Gas may receive bidding dossiers or competitive offer invitation dossiers and get access to documents on the announced list as stated in bidding notices or competitive offer invitation notices.

Article 16. Distribution of bidding dossiers, competitive offer invitation dossiers and requirement dossiers

1. The Vietnam Oil and Gas Group shall prepare bidding dossiers, for cases of open bidding or restricted bidding, competitive offer invitation dossiers, for cases of competitive offer, or requirement dossiers, for cases of contractor appointment, and distribute them to bidders.

2. Contents of a bidding dossier include:

a/ Basic economic and technical norms of the oil and gas contract, including: profit oil and profit gas sharing ratio; minimum work commitments and minimum financial commitments; proportion of participating interests of the Vietnam Oil and Gas Group or its subsidiary company appointed to participate in the contract as a contractor; the right of the host country to participate in the oil and gas contract (through the Vietnam Oil and Gas Group) upon the first commercial discovery in the oil and gas contract’s area (if applied); the cost recovery level; commitments on other financial obligations (commissions, training costs, contributions to the oil and gas scientific research and technological development fund), royalty, enterprise income tax, export duty on crude oil (including also condensate) and natural gases, and other payable taxes, charges and fees in accordance with the laws on taxes, charges and fees;

b/ Requirements on financial and technical capacity for, and experience in, organizing oil and gas activities and documents on formation of the contractor consortium (if any);

c/ Criteria for contractor selection and method of bid dossier evaluation as specified in Article 18 of this Decree.

d/ Period of contractor selection and other details about procedures for contractor selection;

dd/ Basic documents and information on the oil and gas block;

e/ Required documents on the legal status of each bidder: Operation registration certificate, operation charter, financial statements for the last 3 years or guarantee of the parent company, for institutional bidders; citizen’s identity card or passport, for individual bidders, and other relevant documents of the bidder or each party to the bidding consortium (except the case of selection of contractors for signing oil and gas contracts under Article 40 of the Law on Oil and Gas);

g/ Instructions to bidders;

h/ The model oil and gas contract that is currently valid or proposed to be applied;

i/ Requirements on bid security (if necessary) according to a set form, including those on the form, value and validity duration of bid security;

k/ Initial evaluation of the oil and gas potential of the concerned oil and gas block;

l/ Other relevant documents.

3. A competitive offer invitation dossier must have the contents specified at Points a, b, c, dd, e, g, h, i, k and l, Clause 2 of this Article.

4. A requirement dossier, for cases of contractor appointment, must have the contents specified at Points a, b, c, dd, e, g, h, i, k and l, Clause 2 of this Article and contents on transition from the currently performed oil and gas contract into a new one (if any), for the case of contractor appointment under Point c, Clause 1, Article 21 of the Law on Oil and Gas.

Article 17. Receipt of bid dossiers, competitive offer dossiers, proposal dossiers; opening of bids and management of bid dossiers

1. Bidders shall send their bid dossiers, in cases of open bidding or restricted bidding, competitive offer dossiers, for cases of competitive offer, or proposal dossiers, for cases of contractor appointment, to the Vietnam Oil and Gas Group within the time limit stated in bidding dossiers or competitive offer invitation dossiers or requirement dossiers. The Vietnam Oil and Gas Group shall decide on the time limit for submission of bid dossiers, competitive offer dossiers or proposal dossiers and state it in notices of invitation for participation but must not exceed 120 days from the date of distribution of bid dossiers, competitive offer dossiers or proposal dossiers.

2. Requirements on a bid dossier, competitive offer dossier or proposal dossier

a/ Being made in accordance with provisions of the bidding dossier, competitive offer invitation dossier or requirement dossier;

b/ Being considered valid as it fully satisfies corresponding requirements of the bidding dossier, competitive offer invitation dossier or requirement dossier; and being submitted within the specified time limit and by the specified method.

3. Opening of bids and management of bid dossiers or competitive offer dossiers or proposal dossiers

a/ The opening of bids shall be carried out within the time limit and by the method specified in the bidding dossier or competitive offer invitation dossier or requirement dossier;

b/ The opening of bids shall be participated by representatives of the Vietnam Oil and Gas Group, Ministry of Industry and Trade, Ministry of Public Security, related ministries and sectors (if necessary), and bidders.

c/ After opened, bid dossiers or competitive offer dossiers or proposal dossiers shall be managed as confidential documents in accordance with the law on protection of state secrets throughout the course of contractor selection;

d/ After the opening of bids, documents added by bidders into their bid dossiers or competitive offer dossiers or proposal dossiers are not legally valid, except the case of addition of documents specified in Clause 3, Article 19 of this Decree.

Article 18. Criteria for selection of contractors and methods of evaluation of bid dossiers, competitive offer dossiers and proposal dossiers

1. Criteria for selection of contractors include:

a/ Criteria on capacity and experience of contractors, including: technical and financial capacity, ability to raise funds for organization of oil and gas activities; experience in carrying out oil and gas activities and performing oil and gas contracts (for a contractor consortium, the contractor consortium’s capacity and experience shall be determined by summing the capacity and experience of consortium members); relevant contracts and agreements that contractors have performed or are performing (if any);

b/ Criteria on technical conditions suitable to each oil and gas block, including: minimum work commitment (new explosion revenues, reprocessing of seismic documents, and number of bore wells); commitments on oil and gas field development and oil and gas production; plan on organization of, and optimal technology for, oil and gas activities, fulfillment of requirements on environmental protection and reduction of carbon dioxide emission;

c/ Criteria on economic conditions suitable to each oil and gas block, including: tax rates in accordance with tax laws, surcharge to be applied in case oil prices are elevated; profit oil and profit gas sharing ratio for the host country; proportion of participating interests of the host country (through the Vietnam Oil and Gas Group) upon the first commercial discovery in the oil and gas contract’s area (if applied); proportion of participating interests of the Vietnam Oil and Gas Group or its subsidiary company appointed to participate in the contract as a contractor; the cost recovery level; financial commitments corresponding to minimum work commitments; commitments on other financial obligations (commissions, training costs, contributions to the oil and gas scientific research and technological development fund).

2. Methods of evaluation of bid dossiers, competitive offer dossiers and proposal dossiers include:

a/ For capacity and experience criteria: Evaluation is based on “qualified” and “unqualified” criteria;

b/ For criteria on technical conditions suitable to each oil and gas block: Satisfaction of requirements on minimum work commitments and evaluation by scoring on the 100-point scale;

c/ For criteria on economic conditions suitable to each oil and gas block: Evaluation by scoring on the 100-point scale;

d/ Summary of results: Total score shall be calculated as follows: Total score = total score of the criterion on technical conditions multiplied (x) by weight of the criterion on technical conditions plus (+) total score of the criterion on economic conditions multiplied (x) by weight of the criterion on economic conditions, in which the weight of the criterion on technical conditions is at least 0.3 depending on characteristics of each oil and gas block; the weight of the criterion on technical conditions plus (+) that of the criterion on economic conditions = 1;

dd/ A bidder will become the bid winner when concurrently obtaining the following results: its/his/her capacity and experience are “qualified”; it/he/she satisfies the requirement on minimum work commitments and its/his/her total score of the criterion on technical conditions reaches the minimum level specified in the bidding dossier; its/his/her total score of the criterion on economic conditions reaches the minimum level specified in the bidding dossier; and its/his/her total score calculated according to Point d, Clause 2 of this Articles is the highest among bidders’.

3. When making bidding dossiers, competitive offer invitation dossiers or requirement dossiers, the Vietnam Oil and Gas Group shall formulate and approve criteria for contractor selection and methods of evaluation of bid dossiers, competitive offer dossiers and proposal dossiers suitable to characteristics of each oil and gas block.

Article 19. Evaluation of bid dossiers, competitive offer dossiers or proposal dossiers

1. The Vietnam Oil and Gas Group shall form a group of experts to evaluate bid dossiers or competitive offer dossiers or proposal dossiers. Such group of experts must be composed of individuals who have capacity and experience and possess certificates of training in bidding in accordance with the bidding law and work under the regulation issued by the Vietnam Oil and Gas Group.

2. The evaluation of bid dossiers or competitive offer dossiers or proposal dossiers must be based on the criteria for contractor selection and evaluation methods stated in plans on contractor selection and approved bidding dossiers or competitive offer invitation dossiers or requirement dossiers.

3. The Vietnam Oil and Gas Group may request bidders to clarify in writing their bid dossiers or competitive offer dossiers or proposal dossiers. Within 5 days after receiving a request of the Vietnam Oil and Gas Group, a bidder shall issue a written reply. The clarification of bid dossiers or competitive offer dossiers or proposal dossiers aims to provide information to explain contents required to be clarified without changing principal contents of such dossiers.

4. The evaluation of bids shall be carried out within 30 days from the date of bid opening.

Article 20. Dossiers, order and procedures for appraisal and approval of results of the selection of contractors for signing oil and gas contracts

1. Within 15 days after completing the evaluation of results of the selection of contractors for signing oil and gas contracts, the Vietnam Oil and Gas Group shall submit 2 dossiers of request for approval of results of the selection of contractors for signing oil and gas contracts for appraisal (including 1 original dossier and 1 dossier comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A report on results of the bid evaluation and a request for selection of contractors for signing an oil and gas contract, enclosed with documents on economic and technical conditions of the oil and gas contract;

b/ The bidding dossier or competitive offer invitation dossier or requirement dossier;

c/ Bid dossiers or competitive offer dossiers or proposal dossiers;

d/ Bid opening minutes;

dd/ Bid evaluation minutes and bid scoring sheet;

e/ The Vietnam Oil and Gas Group’s written requests for clarification of bid dossiers or competitive offer dossiers or proposal dossiers and written replies of bidders (if any);

g/ Other relevant documents.

2. The appraisal of results of contractor selection for signing an oil and gas contract covers:

a/ Evaluation of grounds for the contractor selection;

b/ Evaluation of compliance with regulations on time limits in the course of contractor selection;

c/ Evaluation of appropriateness of evaluation methods and contractor selection criteria;

d/ Evaluation of compliance with regulations in the course of evaluation of bid dossiers, competitive offer dossiers or proposal dossiers;

dd/ Consideration of divergent opinions (if any) of the group of experts;

e/ Other relevant contents.

3. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Committee for Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors.

4. Within 15 days after receiving dossiers from the Ministry of Industry and Trade for their opinions, ministries and sectors shall give their written opinions on the contents falling under their state management to the Ministry of Industry and Trade.

5. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of results of contractor selection for signing the oil and gas contract, and submit them to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of results of contractor selection of contractor for signing the oil and gas contract;

b/ The documents specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of written opinions of ministries and sectors.

6. Within 15 days after receiving the Prime Minister’s written approval of results of contractor selection for signing the oil and gas contract, the Vietnam Oil and Gas Group shall notify the selected bidder of contractor selection results, basic economic and technical conditions of the oil and gas contracts, and the oil and gas contract negotiation plan.

7. Within 90 days after receiving a notice of results of contractor selection for signing the oil and gas contract, the contractor and the Vietnam Oil and Gas Group shall complete the negotiation for the oil and gas contract. Past that time limit, if the two parties still fail to reach consensus on the contents of the draft oil and gas contract, the Vietnam Oil and Gas Group shall report the reason(s) therefor to the Ministry of Industry and Trade and propose extension of the negotiation time limit for consideration and decision by the Ministry of Industry and Trade.

Chapter IV

OIL AND GAS CONTRACTS

Article 21. Dossiers, order and procedures for appraisal and approval of contents of oil and gas contracts

1. Within 30 days after completing the oil and gas contract negotiation, the Vietnam Oil and Gas Group shall submit 2 dossiers of request for approval of contents of the oil and gas contract (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A report-cum-request for approval of contents of the oil and gas contract;

b/ The draft oil and gas contract agreed upon by the Vietnam Oil and Gas Group and contractors; written explanations about discrepancies between the draft oil and gas contract included in the bidding dossier or competitive offer invitation dossier or requirement dossier and the draft oil and gas contract agreed by involved parties;

c/ A certified copy of the operation registration certificate, for institutional investors participating in the oil and gas contract, or a certified copy of the people’s identity card/citizen’s identity card/passport, for individual investors participating in the oil and gas contract;

d/ A letter of guarantee for performance of contractual obligations of the contractor/each contractor in the contractor consortium, issued by a credit institution, foreign bank branch or the parent company of contractors/each contractor in the contractor consortium as requested by the Vietnam Oil and Gas Group after evaluating contractors’ financial statements;

dd/ Documents of the contractor/each contractor in the contractor consortium, including: company charter, financial statements for the last 3 years and other relevant legal documents used as a basis for the oil and gas contract negotiation, and copies of the latest year’s tax liability declaration in case the contractor is governed by Vietnam’s tax laws.

e/ Other relevant documents.

2. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor), and related ministries and sectors for the latter’s opinion.

3. Within 15 days after receiving dossiers from the Ministry of Industry and Trade for their opinions, ministries and sectors shall send to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

4. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of contents of the oil and gas contract for submission to the Prime Minister for consideration and approval. A dossier submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of contents of the oil and gas contract;

b/ The dossier specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors, and copies of such written opinions.

5. Within 5 working days after receiving the Prime Minister’s written approval of contents of the oil and gas contract, the Vietnam Oil and Gas Group and contractors shall sign the oil and gas contract.

Article 22. Dossiers, order and procedures for grant of investment registration certificates

1. Within 5 working days after completing the signing of an oil and gas contract, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 1 dossier of application for investment registration certificate for the contractor carrying out oil and gas activities (the original dossier). Such a dossier must comprise:

a/ An application for investment registration certificate for the contractor carrying out oil and gas activities under the signed oil and gas contract;

b/ The original oil and gas contract signed between the Vietnam Oil and Gas Group and the contractor.

2. Within 15 days after receiving a valid dossier, the Ministry of Industry and Trade shall grant an investment registration certificate to the contractor and Vietnam Oil and Gas Group and concurrently send the original certificate to the Ministry of Finance, Ministry of Planning and Investment, Ministry of Justice and concerned tax agency.

3. Within 30 days from the date the contractor fulfills its/his/her obligations under the oil and gas contract or the date the oil and gas contract is terminated under Article 35 of the Law on Oil and Gas, whichever is later, the contractor shall return the primary-source and original investment registration certificate and modified investment registration certificate (if any) to the Vietnam Oil and Gas Group for the latter to send them to the Ministry of Industry and Trade.

Article 23. Dossiers, order and procedures for appraisal and approval of modified contents of oil and gas contracts and grant of modified investment registration certificates

1. Pursuant to Clause 1, Article 28 of the Law on Oil and Gas, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to the Ministry of Industry and Trade 2 dossiers of request for approval of modified contents of the oil and gas contract and grant of a modified investment registration certificate (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A written request for approval of modified contents of the oil and gas contract and grant of a modified investment registration certificate, which must clearly state the reason for modification, provide explanations about modified contents of the oil and gas contract, and the Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal;

b/ The agreement on supplemented and modified contents of the oil and gas contract between the Vietnam Oil and Gas Group and the contractor;

c/ Other relevant documents.

2. Procedures for appraisal and approval of modified contents of oil and gas contracts must comply with Clauses 2, 3 and 4, Article 21 of this Decree.

3. Within 5 working days after receiving the Prime Minister’s written approval of modified contents of the oil and gas contract, the Ministry of Industry and Trade shall grant a modified investment registration certificate to the contractor and the Vietnam Oil and Gas Group and send the original certificate to the Ministry of Finance, Ministry of Planning and Investment, Ministry of Justice and concerned tax agency.

Article 24. Oil and gas product sharing contracts

1. Oil and gas product sharing contracts must comply with the model contract provided in the Appendix to this Decree.

2. The Vietnam Oil and Gas Group and contractors shall negotiate only on contents abstracted as “depending on bidding or negotiation results” and some other contents specified in Article 20.7 of the model contract.

Article 25. Dossiers, order and procedures for approval of extension of the oil and gas prospecting period

1. The oil and gas prospecting period specified in Clause 1, Article 31 of the Law on Oil and Gas can be divided into stages.

2. At least 60 days before the last day of each stage or the last day of the oil and gas prospecting period, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to the Ministry of Industry and Trade 2 dossiers of request for approval of extension of the oil and gas prospecting period (one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A written request for approval of extension of the oil and gas prospecting period, clearly stating the reason for extension; a plan on organization of oil and gas activities in the extended period; additional work commitments, corresponding financial commitments and other proposals expected to be implemented in the extended period (if any);

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal, and the contractor’s written explanations (if any);

c/ Other relevant documents.

3. Within 5 working days after receiving a valid dossier, the Ministry of Industry and Trade shall send it to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinions.

4. Within 15 days after receiving the dossier from the Ministry of Industry and Trade for their opinions, ministries and sectors shall give to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

5. Within 45 days after receiving a valid dossier, the Ministry of Industry and Trade shall issue a written approval of extension of the oil and gas prospecting period.

Article 26. Dossiers, order and procedures for appraisal and approval for extension of the term of oil and gas contracts

1. At least 1 year before an oil and gas contract is terminated, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to the Ministry of Industry and Trade 2 dossiers of request for approval of extension of the term of the oil and gas contract (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A written request for approval of extension of the term of the oil and gas contract, clearly stating the reason for extension, a plan on organization of oil and gas activities in the extended period, and minimum work commitments and minimum financial commitments for the extended period (if any);

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal and the contractor’s written explanations (if any);

c/ Other relevant documents.

2. Within 5 working days after receiving a valid dossier, the Ministry of Industry and Trade shall send it to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor), and related ministries and sectors for the latter’s opinions.

3. Within 15 days after receiving the dossier from the Ministry of Industry and Trade for their opinions, ministries and sectors shall give to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

4. Within 45 days after receiving a valid dossier, the Ministry of Industry and Trade shall issue a written approval of extension of the term of the oil and gas contract.

Article 27. Dossiers, order and procedures for appraisal and approval of extension of the oil and gas prospecting period or term of oil and gas contracts in special cases

1. At least 60 days before the last day of the oil and gas prospecting period or 1 year before the oil and gas contract is terminated, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit 2 dossiers of request for approval of extension of the oil and gas prospecting period or the term of the oil and gas contract in a special case (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A written request for approval of extension of the oil and gas prospecting period or the term of the oil and gas contract, clearly stating the reason for extension and the satisfaction of the conditions specified in Clause 4, Article 31 of the Law on Oil and Gas; a plan on organization of oil and gas activities in the extended period; additional work commitments, corresponding financial commitments and other proposals expected to be implemented in the extended period (if any);

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal, and the contractor’s written explanation (if any);

c/ Other relevant documents.

2. Within 5 working days after receiving a valid dossier, the Ministry of Industry and Trade shall send it to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinions.

4. Within 45 days after receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the request for extension of the oil and gas prospecting period or the term of the oil and gas contract in special cases for submission to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of the extension of the oil and gas prospecting period or the term of the oil and gas contract in special cases;

b/ The dossier specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors, and copies of such written opinions.

Article 28. Dossiers, order and procedures for appraisal and approval of the retention of discovered gas area

1. Within 90 days from the date of declaration of a commercial discovery, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to the Ministry of Industry and Trade 2 dossiers of request for approval of the retention of the discovered gas area for a maximum period
of 5 years (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A written request for approval of the retention of the discovered gas area, clearly stating the reason for retention and the satisfaction of the conditions specified in Clause 5, Article 31 of the Law on Oil and Gas; a plan on development of the gas discovery; additional work commitments and corresponding financial commitments expected to be implemented in the period of retaining the discovered gas area (if any);

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal, and the contractor’s written explanation (if any);

c/ Other relevant documents.

3. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinions.

4. Within 15 days after receiving dossiers from the Ministry of Industry and Trade for their opinions, ministries and sectors shall give to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

5. At least 90 days before the last day of the period of retaining the discovered gas area approved by the Ministry of Industry and Trade, if the contractor wishes to continue retaining the discovered gas area for at most 2 more years under Clause 5, Article 31 of the Law on Oil and Gas, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to the Ministry of Industry and Trade for appraisal 2 dossiers of request for approval of the extension of the period of retaining the discovered gas area (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal, and the contractor’s written explanation (if any);

c/ Other relevant documents.

6. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor), and related ministries and sectors for the latter’s opinions.

7. Within 15 days after receiving the dossiers from the Ministry of Industry and Trade for their opinions, ministries and sectors shall give to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

8. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the request for extension of the period of retaining the discovered gas area for submission to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on results of the appraisal and a request for approval of the extension of the period of retaining the discovered gas area;

b/ The dossier specified in Clause 5 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of written opinions of ministries and sectors.

Article 29. Dossiers, order and procedures for approval of the suspension of the exercise of a number of rights and performance of a number of obligations under oil and gas contracts due to force majeure events

1. In case of a force majeure event, the Vietnam Oil and Gas Group and the contractor shall negotiate on the suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract.

2. Within 30 days after reaching an agreement with the contractor, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade for consideration and approval 2 dossiers of request for approval of the suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract due to a force majeure event (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A written request for approval of the suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract due to a force majeure event;

b/ The contractor’s written proposal (if any);

c/ Other relevant documents.

3. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinions.

4. Within 15 days after receiving the dossiers from the Ministry of Industry and Trade for their opinions, ministries and sectors shall give to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

5. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall issue a written approval of the suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract due to a force majeure event.

Article 30. Dossiers, order, procedures for appraisal and approval of the suspension of the exercise of a number of rights and performance of a number of obligations under oil and gas contracts for national defense and security reasons

1. Based on the practical situation of, and competent agencies’ reports on, national defense and security, in order to assure a peaceful and stable environment and national interests, the Prime Minister shall decide to suspend the exercise of a number of rights and performance of a number of obligations under an oil and gas contract for national defense and security reasons under Clause 7, Article 31 of the Law on Oil and Gas and assign the Vietnam Oil and Gas Group to notify thereof to the contractor.

2. Based on results of the negotiation with the contractor, the Vietnam Oil and Gas Group shall submit 2 dossiers of request for suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract for national defense or security reasons (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A report on results of the negotiation with the contractor on the suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract for national defense or security reasons, clearly stating information on the oil and gas contract, evaluating the national defense or security reasons, and proposed time of suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract;

b/ Other relevant documents.

3. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinions.

5. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the report on suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract for national defense or security reasons for submission to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of the method of suspending the exercise of a number of rights and performance of a number of obligations under the oil and gas contract for national defense or security reasons;

b/ The dossier specified in Clause 5 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of written opinions of ministries and sectors.

Article 31. Return of oil and gas contract areas and dossiers, order and procedures for approval of the retention of, or postponement of the performance of the obligation to return, oil and gas contract areas

1. The contractor shall return an area equal to at least 20% of the initial oil and gas contract area at the end of each stage of the oil and gas prospecting period, except for the oil and gas field development area and the area it/he/she may retain or suspend the performance of the obligation to return under Clause 3, Article 32 of the Law on Oil and Gas.

2. The contractor may return the oil and gas contract area at any time during the oil and gas prospecting period. The area that the contractor returns on a voluntary basis shall be deducted from the area it/he/she is obliged to return for the relevant period. The voluntary return of the oil and gas contract area does not reduce the committed obligations for the relevant period as well as such area.

3. The location of the to-be-returned oil and gas contract area must be convenient for subsequent oil and gas activities.

4. The Vietnam Oil and Gas Group shall annually sum up and report on the progress of contractors’ return of oil and gas contract areas to the Ministry of Industry and Trade for monitoring; and propose an adjusted list of oil and gas blocks (if necessary) under Article 12 of this Decree.

5. In case a contractor proposes to retain the entire oil and gas contract area or postpone the performance of the obligation to return the oil and gas contract area, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit 2 dossiers of request for retention of the entire oil and gas contract area or postponement of the performance of the obligation to return the oil and gas contract area (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for consideration and approval. Such a dossier must comprise:

a/ A written request for approval of the retention of the entire oil and gas contract area or postponement of the performance of obligation to return the oil and gas contract area, clearly stating the reason for retention or postponement and time of retention of the entire contract area or postponement of the performance of the obligation to return the contract area; a plan on organization of oil and gas activities during the retention period; additional work commitments and corresponding financial commitments expected to be implemented during the period of retention of the contract area or postponement of the performance of the obligation to return the contract area;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal, and the contractor’s written explanation (if any);

c/ Other relevant documents.

6. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinions.

8. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall issue written approval of the retention of the entire oil and gas contract area or postponement of the performance of the obligation to return the oil and gas contract area.

Article 32. Dossiers, order and procedures for appraisal and approval of the expansion of oil and gas contract areas and consolidation of oil and gas discoveries and oil and gas fields

1. Pursuant to Clauses 4 and 5, Article 32 of the Law on Oil and Gas, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with the contractor’s proposal, submit 2 dossiers of request for approval of the expansion of the oil and gas contract area or consolidation of oil and gas discoveries and oil and gas fields (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry of Trade for appraisal. Such a dossier must comprise:

a/ A written request for approval of the expansion of the oil and gas contract area or consolidation of oil and gas discoveries and oil and gas fields, clearly stating the reason for expansion or consolidation, results of the evaluation of the area proposed to be expanded or a plan on consolidation of oil and gas discoveries and oil and gas fields;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal; and the contractor’s written explanation (if any);

c/ Other relevant documents.

2. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinions.

3. Within 15 days after receiving the dossiers from the Ministry of Industry and Trade for their opinions, ministries and sectors shall give to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

4. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the proposal for expansion of the oil and gas contract area or consolidation of oil and gas discoveries or oil and gas fields for submission to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of the proposal for expansion of the oil and gas contract area or consolidation of oil and gas discoveries or oil and gas fields;

b/ The dossier specified in Clause 5 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of written opinions of ministries and sectors.

5. The agreement-in-principle on consolidation of oil and gas discoveries and oil and gas fields shall be submitted by the contractor in the outline plan for oil and gas field development; the agreement on consolidation of oil and gas discoveries and oil and gas fields shall be submitted by the contractor in the plan on early production of the oil and gas field and the oil and gas field development plan.

Article 33. Dossiers, order and procedures for appraisal and approval of the transfer of rights and obligations under oil and gas contracts and issuance of modified investment registration certificates

1. Pursuant to Clause 1, Article 36 of the Law on Oil and Gas, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with the contractor’s proposal, submit 2 dossiers of request for approval of the transfer of rights and obligations under the oil and gas contract (including one original dossier and the other comprising copies thereof, to be hand-delivered for sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A written request for approval of transfer of rights and obligations under the oil and gas contract and grant of a modified investment registration certificate, clearly stating the reason and the satisfaction of the conditions specified in Clause 1, Article 36 of the Law on Oil and Gas;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal; and the contractor’s explanatory document (if any);

c/ Certified copies of the operation registration certificate, company charter and financial statements of the last 3 years of the transferee, for institutional transferees; a certified copy of the people’s identity card or citizen’s identity card or passport and proofs of financial capacity of the transferee, for individual transferees;

d/ The contract or agreement on transfer of rights and obligations under the oil and gas contract, which must define related parties’ responsibility to perform the transfer tax obligation and other financial obligations in accordance with Vietnam’s laws;

dd/ The agreement on modification of the oil and gas contract between the Vietnam Oil and Gas Group and the contractor;

e/ A letter of guarantee for the performance of contractual obligations for the transferee of participating interests under the oil and gas contract, issued by a commercial bank, or the guarantee by the transferee’s parent company or other form of guarantee at the request of the Vietnam Oil and Gas Group (if the Vietnam Oil and Gas deems it necessary after evaluating the transferee’s financial statements);

g/ The declaration of, and explanation about, the transfer tax amount (if any) in accordance with tax laws; the tax agency’s notice of receipt of the tax declaration dossier in accordance with tax laws;

h/ Other relevant documents.

2. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and related ministries and sectors for the latter’s opinion.

4. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the proposal for transfer of rights and obligations under the oil and gas contract for submission to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for the approval of the transfer of rights and obligations under the oil and gas contract;

b/ The dossier specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of written opinions of ministries and sectors.

5. Within 5 working days after receiving the Prime Minister’s approval of transfer of rights and obligations under the oil and gas contract, the Ministry of Industry and Trade shall issue a modified investment registration certificate to the contractor and the Vietnam Oil and Gas Group, and send the original certificate to the Ministry of Finance, Ministry of Planning and Investment, Ministry of Justice and concerned tax agency.

6. In case of change of the owner of a contractor holding participating interests under an oil and gas contract, the contractor shall declare and pay tax on behalf of its owner for the oil and gas contract-related income amount generated in Vietnam (if any) or report thereon to the concerned tax agency in case it is not a tax-liable subject in accordance with Vietnam’s law. The tax declaration or report sent to the tax agency and the tax agency’s notice of receipt of documents sent by the contractor are documents required to be included with the dossier of reporting on change of the contractor’s owner submitted to the competent agency. In case the transfer takes place outside Vietnam, the dossier must have sufficient information on the country/territory and time of completion of the transfer transaction; whether or not the performance of the tax obligation for the transfer transaction includes the value of assets and participating interests under the oil and gas contract in Vietnam. In case value of assets and participating interests under the oil and gas contract in Vietnam is included, it is necessary to clearly state the basis and method for determining the value of such assets and interests in Vietnam. In case the parent company or direct owner of the contractor has previously issued a letter of guarantee for the performance of the oil and gas contract, the contractor shall provide a letter of guarantee issued by the new owner and obtain acceptance of the Vietnam Oil and Gas Group.

7. In case a contractor undergoes a merger, consolidation, division, separation, change of name, transfer of company nationality or other events that lead(s) to a change in its basic information stated in the investment registration certificate or oil and gas contract, except the case specified in Clause 6 of this Article, the contractor shall carry out procedures for modification of the investment registration certificate and declare and pay taxes, if generating taxable income in accordance with Vietnam’s law and treaties to which Vietnam is a contracting party.

8. Within 15 days after a contractor changes its/his/her address or at-law representative, the contractor shall send a notice thereof to the Ministry of Industry and Trade, Vietnam Oil and Gas Group and related contractors in the oil and gas contract.

9. Contractors shall be held responsible for truthfulness and accuracy of the tax declaration and payment (if any) or their reports sent to tax agencies, in case they are not tax-liable subjects in accordance with law; and shall be handled in accordance with law for making untruthful declaration or reporting.

Article 34. Dossiers, order and procedures for appraisal and approval of the exercise of the right to participate in, preemptive right to buy participating interests and takeover of participating interests under, oil and gas contracts by the Vietnam Oil and Gas Group

1. Under Clauses 1 and 2, Article 39 of the Law on Oil and Gas, based on conditions agreed upon between the contractor and Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit 2 dossiers of request for approval of the exercise of the right to participate in the oil and gas contract or preemptive right to buy participating interests in case the contractor intends to transfer its/his/her participating interests under the signed oil and gas contract or takes over all participating interests of the contractor in case the latter decides to withdraw from the oil and gas contract for special reasons (including 1 original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A written request for approval of the exercise of the right to participate in or preemptive right to buy participating interests or takeover of participating interests under the oil and gas contract and grant of the modified investment registration certificate, including a report on evaluation of investment opportunities;

b/ The Vietnam Oil and Gas Group’s notice of the exercise of the right to participate in or an agreement between the Vietnam Oil and Gas Group and the contractor on the exercise of preemptive right to buy participating interests or takeover of participating interests under the oil and gas contract; the Prime Minister’s document requesting the Vietnam Oil and Gas Group to take over participating interests of the contractor who withdraws from the oil and gas contract for special reasons;

c/ An agreement on modification of the oil and gas contract between the Vietnam Oil and Gas Group and the contractor;

d/ Other relevant documents.

2. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises and related ministries and sectors for the latter’s opinions.

4. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the request for the exercise of the right to participate in, preemptive right to buy participating interests or takeover of participating interests under the oil and gas contract of the Vietnam Oil and Gas Group for submission to the Prime Minister for consideration and approval. The dossier submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results, and a request for approval of the exercise of the right to participate in or preemptive right to buy participating interests or takeover of participating interests under the oil and gas contract of the Vietnam Oil and Gas Group;

b/ The dossier specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of such written opinions.

5. Within 5 working days after receiving the Prime Minister’s approval of the exercise of the right to participate in or preemptive right to buy participating interests or takeover of participating interests under the oil and gas contract by the Vietnam Oil and Gas Group, the Ministry of Industry and Trade shall grant the modified investment registration certificate to the contractor and the Vietnam Oil and Gas Group, and concurrently send the original certificate to the Ministry of Finance, Ministry of Planning and Investment, Ministry of Justice and concerned tax agency.

Article 35. Dossiers, order and procedures for establishment, termination of operation, and change of operating offices of foreign operators under oil and gas contracts

1. Within 60 days after the investment registration certificate takes effect, the foreign operator shall submit 1 original dossier for registration of operating office establishment to the provincial-level Department of Planning and Investment of the locality where the operating office is to be located. Such a dossier must comprise:

a/ A written registration of the operating office establishment signed by a competent representative of the foreign operator;

b/ A certified copy of the investment registration certificate;

c/ An appointment decision or employment contract, for heads of operating offices of foreign operators;

d/ A certified copy of people’s identity card, citizen identity card or passport of the head of the operating office.

2. Within 15 days after receiving valid dossiers, the provincial-level Department of Planning and Investment shall grant an operating office operation registration certificate.

3. The operation duration of an operating office is based on the validity duration of the investment registration certificate or the modified investment registration certificate, unless such duration is extended for the operating office to fulfill its obligations toward the host country after the oil and gas contract is terminated.

4. The provincial-level Department of Planning and Investment shall send a copy of the operating office operation registration certificate to the Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, and the Vietnam Oil and Gas Group.

5. In case of change of the address or the head of the operating office or takeover of the operating office due to change of the operator and change in other information in the granted operating office operation registration certificate, the operator shall carry out procedures for modifying information in the granted operating office operation registration certificate under Clause 1 of this Article and notify modified contents to the concerned tax agency within 15 days after making the change.

6. In case of termination of operation of the operating office, the operator shall send 1 original dossier of request for termination of operation of the operating office to the provincial-level Department of Planning and Investment of the locality where the operating office is located. Such a dossier must comprise:

a/ A notice of termination of operation of the operating office signed by a competent representative of the operator;

b/ A list of employees and their current relevant interests;

c/ Seal and seal specimen certificate (if any);

d/ The tax agency’s written certification of the operating office’s fulfillment of its tax-related obligations and closure of its tax identification number in case the oil and gas contract is terminated;

dd/ The original operating office operation registration certificate.

7. Within 15 days after receiving a valid dossier, the provincial-level Department of Planning and Investment shall send a notice of deletion of the name of the operating office to the operator, Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Vietnam Oil and Gas Group, and concerned tax agency.

8. The operating office shall fulfill its obligations in accordance with Vietnam’s law before terminating its operation.

Article 36. Dossiers, order and procedures for appraisal and approval of plans on subsequent handling of oil and gas fields, field clusters and blocks upon the expiration of oil and gas contracts

1. In case a contractor implementing an oil and gas contract proposes the signing of a new oil and gas contract upon the expiration of the existing oil and gas contract under Clause 2, Article 40 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall carry out procedures for contractor appointment under Article 21 of the Law on Oil and Gas and this Decree. The Vietnam Oil and Gap Group shall approve and issue the dossier of request for contractor appointment.

2. In case a contractor implementing an oil and gas contract proposes the signing of a new oil and gas contract with different economic and technical conditions, the Vietnam Oil and Gas Group shall report to the Ministry of Industry and Trade for appraisal and submission to the Prime Minister for approval the application of the form of competitive offer for such contractor under this Decree.

3. In case a contractor implementing an oil and gas contract fails to propose the signing of a new oil and gas contract, at least 6 months before the existing oil and gas contract expires, the Vietnam Oil and Gas Group shall submit 2 dossiers for proposal on the approval of the plan on subsequent handling of the oil and gas field, field cluster or block upon the expiration of the oil and gas contract (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A report-cum-request for approval of the plan on subsequent handling of the oil and gas field, field cluster or block upon the expiration of the oil and gas contract, including assessment of the practical state of the oil and gas field, field cluster or block and estimated oil and gas resource and reserve left;

b/ A tentative plan on implementation upon the expiration of the oil and gas contract according to one of the following options: terminating exploitation activities at the oil and gas field, field cluster or block; or continuing exploitation activities at the oil and gas field, field cluster or block under the new oil and gas contract with suitable economic and technical conditions; or assigning the Vietnam Oil and Gas Group to carry out enhanced oil recovery at the oil and gas field, field cluster or block.

c/ A draft financial mechanism for operating oil and gas activities during the period from the time of taking over the oil and gas field, field cluster or block to the time of signing the new oil and gas contract;

d/ Other relevant documents.

4. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises, and related ministries and sectors for the latter’s opinions.

5. Within 15 days after receiving dossiers from the Ministry of Industry and Trade for their opinions, ministries and sectors shall send to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

6. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the plan on subsequent handling of the oil and gas field, field cluster or block before the oil and gas contract expires for submission to the Prime Minister for consideration and approval. The dossier submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results, and a request for approval of the plan on subsequent handling of the oil and gas field, field cluster or block upon the expiration of the oil and gas contract;

b/ The dossier specified in Clause 3 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of such written opinions.

7. Based on the Prime Minister’s decision on approval of the plan on subsequent handling of the oil and gas field, field cluster or block upon the expiration of the oil and gas contract:

a/ In case of terminating exploitation activities at the oil and gas field, field cluster or block, the contractor shall decommission oil and gas structures under the approved plan on decommissioning of oil and gas structures;

b/ In case of continuing to carry out exploitation activities at the oil and gas field, field cluster or block, the Vietnam Oil and Gas Group shall take over the oil and gas field, field cluster or block in status quo from the contractor and operate oil and gas activities under the financial mechanism provided in Article 37 of this Decree until the new oil and gas contract is signed but for at most 2 years; select and appoint a unit to take charge of operating oil and gas activities during the mentioned period (if necessary). Past 2 years from the time of taking over the oil and gas field, field cluster or block, if there is no contractor expressing interest or if it is unable to select a contractor to sign the new oil and gas contract, the Vietnam Oil and Gas Group shall report to the Ministry of Industry and Trade for appraisal and submission to the Government for approval the plan on subsequent handling of the oil and gas field, field cluster or block according to either of the 2 options specified in Clause 3, Article 41 of the Law on Oil and Gas. The dossier, order and procedures for appraisal and approval of the plan on subsequent handling of the oil and gas field, field cluster or block must comply with Clauses 3, 4, 5 and 6 of this Article;

c/ In case of carrying out enhanced oil recovery at the oil and gas field, field cluster or block, the Vietnam Oil and Gas Group shall carry out oil and gas activities under Chapter VIII of this Decree.

Article 37. Financial mechanisms for operating oil and gas activities during the period from the time of taking over oil and gas fields, field clusters or blocks to the time of signing new oil and gas contracts

The financial mechanism for operating oil and gas activities during the period from the time of taking over an oil and gas field, field cluster or block to the time of signing a new oil and gas contract under Clause 3, Article 41 of the Law on Oil and Gas and Point b, Clause 7, Article 36 of this Decree shall be implemented as follows: the difference between revenues from and costs of oil and gas activities (including amounts set aside to contribute to the financial obligation security fund for the decommissioning of oil and gas structures, if necessary) shall be remitted into the state budget on the principle of ensuring the efficiency and strict control of costs of oil and gas activities. Costs of oil and gas activities in this case means those to be deducted upon the determination of incomes subject to corporate income tax in accordance with the laws on corporate income tax and oil and gas and relevant legal documents and treaties to which Vietnam is a contracting party. The financial mechanism for operating oil and gas activities pending the signing of a new oil and gas contract must specify the following:

1. Oil and gas sale revenues from oil and gas activities and other revenues (if any) which shall be used for the following purposes:

a/ Paying and refunding all reasonable and valid costs of oil and gas activities under the approved operating program and budget;

b/ Paying in advance costs estimated for the subsequent period in conformity with the approved operating program and budget;

c/ Covering costs of additional investments to increase oil and gas reserves and maintain oil and gas production output; the setting aside of the fund to secure the performance of the obligation to decommission oil and gas structures, for additionally invested structures (if any).

2. Annual remittance into the state budget of the following amounts:

a/ Total remaining revenues after being used for the purposes specified in Clause 1 of this Article;

b/ The remaining budget balance (if any) in case implementation costs at the end of the period are smaller than the practically approved budget;

c/ Interests (if any) arising from the balance of provisions allowed to be left at the end of the fiscal year;

d/ The remaining value (if any) of the fund for securing the performance of the obligation to decommission oil and gas structures after the decommissioning of oil and gas structures is completed which is determined based on audit results under regulations.

dd/ The value difference (if any) between revenues from the liquidation of assets that are no longer needed for oil and gas activities; equipment, facilities, supplies and wastes collected from the decommissioning of oil and gas structures; and reasonable and valid actual costs in each case.

3. Responsibilities of the Vietnam Oil and Gas Group

a/ To formulate and approve annual operating programs and budget estimates;

b/ To formulate and approve procedures for selection of contractors providing services or procuring goods in the enhanced oil recovery of oil and gas fields, field clusters and blocks in accordance with the Law on Oil and Gas and principles applicable to oil and gas contracts.

c/ To make quarterly reports on oil and gas activities to the Ministry of Industry and Trade;

d/ To propose plans on subsequent handling of oil and gas fields, field clusters or blocks under Clause 3, Article 41 of the Law on Oil and Gas.

Article 38. Mechanisms for management, accounting and use of assets and takeover of all participating interests from contractors in special cases

1. In case a contractor decides to withdraw from an oil and gas contract for special reasons under Clause 2, Article 39 of the Law on Oil and Gas, the Vietnam Oil and Gas Group may take over all participating interests of the contractor under the oil and gas contract and oil and gas information, data, documents, samples and structures and other assets (if any) in status quo under the agreement signed with the contractor.

2. The value of state assets taken over and managed by the Vietnam Oil and Gas Group under Clause 1 of this Article means that taken from the state budget by the Vietnam Oil and Gas Group to pay to contractors on behalf of the State under agreements signed between the Vietnam Oil and Gas Group and such contractors.

3. The Vietnam Oil and Gas Group shall organize the management and make separate reports to monitor participating interests taken over from contractors and oil and gas information, data, documents, samples and structures, and other assets (if any) specified in Clause 1 of this Article and detailed in the Prime Minister’s decision on assignment of the Vietnam Oil and Gas Group to take over all participating interests from contractors in special cases, not accounted into state capital invested in enterprises and financial statements of the Vietnam Oil and Gas Group.

4. Every year, the Vietnam Oil and Gas Group shall formulate a plan on expenses for management and monitoring of assets and for arising issues which shall be handled under Point d, Clause 4, Article 64 of the Law on Oil and Gas to maintain oil and gas contracts and audit results approved by the Members’ Council of the Vietnam Oil and Gas Group.

5. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Commission for the Management of State Capital at Enterprises in, guiding and supervising the Vietnam Oil and Gas Group’s management of assets under Clause 1 of this Article.

Chapter V

SAFETY IN OIL AND GAS ACTIVITIES

Article 39. Documents on safety management

1. When carrying out oil and gas activities, contractors shall formulate documents on safety management under Point a, Clause 4, Article 8 of the Law on Oil and Gas, including:

a/ Safety management program;

b/ Risk assessment report;

c/ Emergency response plan.

2. A safety management program must have the following principal contents:

a/ Safety policies and objectives;

b/ Organization of safety work and decentralization of responsibility for safety assurance;

c/ Safety training program; requirements on employees’ capacity, qualifications and experience;

d/ A list of legal documents, national technical regulations, national standards, safety regulations, treaties to which Vietnam is a contracting member or other standards in conformity with generally accepted international oil and gas industry practices;

dd/ Assessment of law compliance including requirements that need to be fulfilled under regulations on licenses and quality, technical safety and environmental protection certificates;

e/ Safety management by service contractors, organizations and individuals.

3. A risk assessment report must have the following principal contents:

a/ Determination of risk assessment purposes and objectives;

b/ Description of oil and gas activities and structures;

c/ Qualitative and quantitative risk identification, analysis and assessment;

d/ Risk mitigation measures.

4. An emergency response plan must be based on results of a risk assessment report and have the following principal contents:

a/ Description and classification of possible emergency circumstances;

b/ Organizational chart, decentralization of responsibility, responsibility of each individual or reporting system upon the occurrence of an incident or accident or a dangerous circumstance;

c/ Procedures for responding to circumstances;

d/ Description of internal and external resources available or to be mobilized for effectively responding to emergency circumstances;

dd/ Contact addresses and information for use in emergency response with internal sections and reporting to competent agencies;

e/ Emergency response training and drill plans;

g/ A plan on restoration of operation of oil and gas structures, covering investigation and assessment of causes and consequences in order to re-establish and raise the safety level of oil and gas structures;

h/ An emergency response plan that must be conformable with the emergency response system of the National Committee for Incident and Disaster Response, Search and Rescue, local systems and the Vietnam Oil and Gas Group (for units affiliated to the Vietnam Oil and Gas Group, oil and gas joint ventures and oil and gas contractors);

i/ Organizations and individuals carrying out oil and gas activities may cooperate with one another in formulating joint emergency response plans.

5. The Ministry of Industry and Trade shall provide detail guidance on contents of documents on safety management in oil and gas activities.

Article 40. Dossiers, order and procedures for appraisal and approval of documents on safety management

1. Before carrying out oil and gas drilling and prospecting, building new oil and gas structures or converting existing ones, or decommissioning oil and gas structures when oil and gas activities are completed, based on documents on safety management as specified in Article 39 of this Decree formulated by contractors and approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 1 original dossier of request for approval of documents on safety management. Such a dossier must comprise:

a/ A report-cum-request for approval of documents on safety management;

b/ Contents of documents on safety management specified in Article 39 of this Decree;

c/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal; the contractor’s written explanations (if any);

d/ Other relevant documents.

2. Contents of appraisal of documents on safety management cover:

a/ Evaluating the conformity of dossiers and documents in accordance with the Law on Oil and Gas and this Decree;

b/ Evaluating the conformity and accuracy of documents’ contents;

c/ Inspecting the reality in oil and gas structures (if necessary).

3. Documents on safety requirement shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue a decision on establishment and operation regulation of such a appraisal council (comprising representatives of related ministries, sectors and organizations, if necessary).

4. Within 30 days after receiving a valid dossier, the appraisal council shall complete the appraisal of documents on safety requirement for submission to the Minister of Industry and Trade for consideration and approval.

5. Within 5 working days after receiving a written appraisal of the appraisal council, the Minister of Industry and Trade shall issue a decision on approval of documents on safety management.

Article 41. Safety management systems

1. Contractors shall establish, maintain and update safety management systems to assure safety for all oil and gas activities from the commencement of the oil and gas prospecting stage to the end of the stage of decommissioning of oil and gas structures.

2. Principal contents of a safety management system include:

a/ Occupational safety and working environment policies and objectives and programs and plans on achievement of such objectives;

b/ An updated list of relevant legal documents, applicable standards and technical regulations;

c/ Processes of operation, remediation of incidents and maintenance of structures, machinery and equipment; regulations on management, inspection and certification of quality, technical safety and environmental protection for structures, machinery, equipment, and dangerous chemicals;

d/ Safety regulations and safety signs for lines, machinery, equipment, supplies and chemicals and jobs subject to strict safety requirements; management and storage of documents and reports;

dd/ The system of safety organization, including the decentralization of responsibility, task performance, reporting channels; requirements on professional skills and experiences suitable to working positions;

e/ Evaluating of implementation results of the safety management program and solutions to improve the safety management quality. Contractors’ safety, health and environmental management capacity shall be kept under control in conformity with safety management systems of organizations and individuals;

g/ All changes in organization, techniques, technologies and other requirements affecting risk levels shall be updated, evaluated and controlled by organizations and individuals so as to ensure uninterrupted and uniform operation of safety management systems.

Article 42. Safety risk management

1. Contractors shall identify, analyze and assess all risks in oil and gas structures, machinery, equipment, chemicals and dangerous materials. Risk assessment results shall be used as input data for the organization of emergency responses.

2. The risk management covers:

a/ Assessment of qualitative and quantitative risks in stages of oil and gas activities for use as a basis for implementing risk control and mitigation measures and proving that risks remain at an acceptable level in accordance with national technical regulations;

b/ A risk assessment report that shall be updated once every 5 years or when there are major conversions or changes in operational technologies and organization so as to create foundations for making decisions related to safety in oil and gas activities;

c/ Contractors shall identify high-risk specific locations and conditions that require safety attention when carrying out oil and gas activities in order to implement risk mitigation measures.

Article 43. Emergency response

1. Contractors shall build and maintain their emergency response systems to effectively carry out rescue activities upon the occurrence of incidents or accidents that may harm people, the environment or assets. Depending on severity of incidents and accidents, contractors shall notify thereof to competent agencies under regulations.

2. The practice and drills for dealing with emergency circumstances at oil and gas structures shall be carried out regularly to ensure that employees clearly understand and grasp rescue processes in response to specific emergency circumstances. Risk assessment results serve as a basis for determining practice form and frequency. Practice and drill results shall be evaluated and recorded to perfect emergency response plans.

3. Persons who visit oil and gas structures for the first time shall be provided with detailed instructions on emergency response organization, safety equipment and exit routes.

Article 44. Safety in designing, fabrication, building and operation of oil and gas structures

1. Oil and gas structures shall be designed, fabricated and built under national technical regulations and national standards or widely-recognized and -used international, regional and foreign standards and in accordance with Vietnam’s law and treaties to which Vietnam is a contracting member, ensuring the following requirements:

a/ Technological safety;

b/ Construction safety;

c/ Fire prevention and fighting safety;

d/ Safety zones and corridors;

dd/ Regulations on environmental protection;

e/ Withstanding projected loads during operation and upon the occurrence of incidents;

g/ Refraining from creating a chain of incidents from a single incident.

2. The designing, fabrication, building, test-run and pre-acceptance testing of oil and gas structures shall be inspected and certified by competent agencies in accordance with law to ensure the conformity with applicable technical regulations and standards, Vietnam’s law and treaties to which Vietnam is a contracting member.

3. Before test-run, contractors shall inspect and test work items of structures and ensure that emergency response and fire prevention and fighting plans are ready for deployment under regulations. During such test-run, organizations and individuals shall apply intensified measures so that they can stay ready for prompt and effective response to incidents and accidents likely to occur.

4. Oil and gas structures may only be commissioned after results of inspection and testing of such structures and safety contents satisfy set requirements.

5. Oil and gas structures shall be operated, maintained, inspected and repaired in accordance with regulations and processes, technical regulations and standards approved for application. Contractors shall immediately stop activities that may cause uncontrollable risks for people, the environment and oil and gas structures.

Chapter VI

ORDER AND PROCEDURES FOR APPROVAL FOR IMPLEMENTATION OF OIL AND GAS ACTIVITIES

Article 45. Dossier, order and procedures for appraisal and approval of oil and gas field development projects with comprehensive chains of onshore and offshore oil and gas structures and equipment

1. Pursuant to Clause 1, Article 42 of the Law on Oil and Gas, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit 2 dossiers of request for approval for implementing an oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A written request for approval for implementing an oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment, which must clearly state the reason(s) for the request and contain evaluation of the option of implementing the oil and gas field development project with comprehensive chains and comparison of the efficiency between such option with others;

b/ Draft adjustments to the oil and gas contract in order to implement the oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment;

c/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal; and the contractor’s written explanations (if any);

d/ A proposal for repurposing of forests or land (if any), enclosed with an explanatory report, a map showing the current state of forests and land, and other dossiers and documents as prescribed by the law on forestry, land law and other relevant laws;

d/ Other relevant documents.

2. Within 5 working days after receiving valid dossiers, the Ministry of Industry and Trade shall send them to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of Construction, Ministry of Natural Resources and Environment, Ministry of Agriculture and Rural Development, Ministry of National Defense, Ministry of Foreign Affairs, Ministry of Public Security, Commission for the Management of State Capital at Enterprises (in case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor), and related ministries, sectors and localities for the latter’s opinion.

3. Within 15 days after receiving dossiers sent from the Ministry of Industry and Trade for their opinions, ministries, sectors and localities shall send to the Ministry of Industry and Trade their written opinions on issues falling under their state management; particularly, the Ministry of Natural Resources and Environment and Ministry of Agriculture and Rural Development shall give opinions on repurposing of forests or land (if any) as prescribed by the law on forestry, land law, and other relevant laws.

4. Within 45 days after receiving valid dossiers, the Ministry of Industry and Trade shall complete the appraisal of the proposal for implementing the oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment, for submission to the Prime Minister for consideration and approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval for implementing the oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment;

b/ The dossier specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors, and copies of such written opinions.

5. The dossier, order and procedures for appraisal and approval of the policy on repurposing of forests or land (if any) for oil and gas field development projects with comprehensive chains of onshore and offshore oil and gas structures and equipment must comply with the law on forestry and land law. In case the approval of the repurposing of forests or land (if any) falls within the competence of the National Assembly, the dossier must comprise:

a/ The Government’s report-cum-request to the National Assembly for approval of the repurposing of forests or land for the oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment;

b/ Dossiers and documents as prescribed by the laws on forestry and land;

c/ Other relevant documents.

6. After the repurposing of forests or land and the outline plan on oil and gas field development are approved, the dossiers, order and procedures for the provincial-level People’s Committee to decide on the recovery or repurposing of forests or land for implementation of the oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment must comply with the law on forestry, land law and other relevant laws.

7. During the recovery and repurposing of forests or land for implementation of the oil and gas field development project, the Vietnam Oil and Gas Group and contractor may conduct surveys and measurement to collect data to serve the formulation of the oil and gas field development plan.

Article 46. Dossiers, order, and procedures for appraisal and approval of the repurposing of forests or land for onshore oil and gas field development projects

1. In case an onshore oil and gas field development project requires the repurposing of forests or land under Clause 2, Article 42 of the Law on Oil and Gas, at the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to competent agencies for appraisal and approval of the repurposing of forests or land in accordance with the law on forestry and land law.

2. In case the approval of the repurposing of forests or land falls within the competence of the National Assembly as specified at Point a, Clause 2, Article 42 of the Law on Oil and Gas, the dossier to be submitted by the Government to the National Assembly for approval of the repurposing of forests or land is similar to that specified in Clause 5, Article 45 of this Decree.

3. The procedure for appraisal and approval of repurposing of forests or land for onshore oil and gas field development projects must comply with the law on forestry, land law, and other relevant laws.

4. After the repurposing of forests or land and the outline plan for oil and gas field development are approved, the dossier and procedures for the provincial-level People’s Committee to decide on the recovery and repurposing of forests or land for implementation of the onshore oil and gas field development project must comply with the law on forestry, land law, and other relevant laws.

Article 47. Dossiers, order and procedures for appraisal and approval of reports on oil and gas resources and reserves and updated reports on oil and gas resources and reserves

1. Within 120 days after completing the appraisal of an oil and gas discovery, based on a report on oil and gas resources and reserves made by the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such report, submit 2 dossiers of request for approval of the report on oil and gas resources and reserves (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A report-cum-request for approval of the report on oil and gas resources and reserves of the appraised oil and gas discovery;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal and the contractor’s written explanations (if any);

c/ The report on oil and gas resources and reserves, comprising the main contents as specified in Article 45 of the Law on Oil and Gas;

d/ A sum-up report on oil and gas resources and reserves;

d/ Other relevant documents.

2. The report on oil and gas resources and reserves shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue establishment decisions and operation regulations of the appraisal council (comprising representatives of related ministries, sectors and organizations) and its assistant team.

3. During the appraisal process, if necessary, the Ministry of Industry and Trade may request the Vietnam Oil and Gas Group to select a qualified consulting organization to verify the report on oil and gas resources and reserves. Expenses for hiring consultants shall be included in the costs of management and supervision of oil and gas contracts specified at Point c, Clause 4, Article 64 of the Law on Oil and Gas. The consulting organization in charge of verification must be legally and financially independent from the contractor. The verification period must not exceed 90 days.

4. Within 45 days after receiving a valid dossier (comprising the consulting organization’s verification report, if requested), the appraisal council shall complete the appraisal of the report on oil and gas resources and reserves for submission to the Minister of Industry and Trade for consideration and approval.

5. Within 5 working days after receiving the written appraisal from the appraisal council, the Minister of Industry and Trade shall issue a decision approving the report on oil and gas resources and reserves.

6. Dossiers, order and procedures for appraisal and approval of the updated reports on oil and gas resources and reserves specified in Clause 5, Article 45 of the Law on Oil and Gas must comply with this Article.

7. The Ministry of Industry and Trade shall provide in detail the decentralization and making of reports on oil and gas resources and reserves.

Article 48. Dossiers, order and procedures for appraisal and approval of outline plans for oil and gas field development and adjustments thereto

1. Within 12 months after the report on oil and gas resources and reserves is approved, based on an outline plan for oil and gas field development proposed by the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit 2 dossiers of request for approval of the outline plan for oil and gas field development (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) to the Ministry of Industry and Trade for appraisal. Such a dossier must comprise:

a/ A report-cum-request for approval of the outline plan for oil and gas field development;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal and the contractor’s written explanations (if any);

c/ The outline plan for oil and gas field development, comprising the main contents specified in Article 46 of the Law on Oil and Gas. In case of gas field development, the preliminary gas consumption option must comprise preliminary information about gas consumers, tentative deadline for starting selling gas, and other necessary conditions of the gas consumption option;

d/ A sum-up report of the outline plan for oil and gas field development;

dd/ The agreement-in-principle on consolidation of oil and gas discoveries and oil and gas fields (if any) between related parties on the basis of the Prime Minister’s approval of consolidation of oil and gas discoveries and oil and gas fields as specified in Article 32 of this Decree;

e/ The agreement-in-principle on joint development of oil and gas fields (if any);

g/ Other related documents.

2. The outline plan for oil and gas field development shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue establishment decisions and operation regulations of the appraisal council (comprising representatives of related ministries, sectors and organizations) and its assistant team.

3. In case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor, in addition to forming a council to appraise the outline plan for oil and gas field development, the Ministry of Industry and Trade shall consult in writing the Commission for Management of State Capital at Enterprises on the use of capital of the Vietnam Oil and Gas Group.

4. Within 45 days after receiving a valid dossier, the appraisal council shall complete the appraisal of the outline plan for oil and gas field development for submission to the Minister of Industry and Trade for consideration and approval.

5. Within 5 working days after receiving the written appraisal from the appraisal council, the Minister of Industry and Trade shall issue a decision approving the outline plan for oil and gas field development.

6. Dossiers, order and procedures for appraisal and approval of adjustments to the outline plan for oil and gas field development in case the approval of the adjustments falls within the competence of the Ministry of Industry and Trade as specified in Clause 5, Article 46 of the Law on Oil and Gas must comply with this Article.

7. Dossiers, order and procedures for appraisal and approval of adjustments to the outline plan for oil and gas field development in case the approval of the adjustments falls within the competence of the Vietnam Oil and Gas Group as specified in Clause 5, Article 46 of the Law on Oil and Gas must comply with the process issued by the Vietnam Oil and Gas Group.

Article 49. Dossiers, order and procedures for appraisal and approval of plans on early production of oil and gas fields and adjustments thereto

1. A contractor shall propose a plan on early production of an oil and gas field in cases:

a/ It is impossible to determine a reasonable production plan according to international oil and gas industry practices with available information but necessary to collect additional data on the basis of monitoring actual production of the field, aquifer and reservoir.

b/ The resource allocation ratio (oil and gas in-place) P1/2P is not lower than 40%; if this ratio is lower than 40%, the Ministry of Industry and Trade’s approval is required.

2. Within 18 months after the outline plan for oil and gas field development is approved, based on the plan on early production of an oil and gas field proposed by the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to the Ministry of Industry and Trade 2 dossiers of request for approval of the plan on early production of the oil and gas field (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A report-cum-request for approval of the plan on early production of oil and gas field;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal and the contractor’s written explanations (if any);

c/ The plan on early exploitation of oil and gas fields, comprising the main contents specified in Article 47 of the Law on Oil and Gas;

d/ A sum-up plan on early production of the oil and gas field;

dd/ The agreement on consolidation of oil and gas discoveries and oil and gas fields (if any) between related parties on the basis of the agreement-in-principle on consolidation of oil and gas discoveries and oil and gas fields approved according to Article 48 of this Decree;

e/ The agreement on joint development of the oil and gas field (if any) on the basis of the agreement-in-principle on joint development of oil and gas fields approved according to Article 48 of this Decree;

g/ Other relevant documents.

3. The plan on early production of an oil and gas field shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue establishment decisions and operation regulations of the appraisal council (comprising representatives of related ministries, sectors and organizations) and its assistant team.

4. In case the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor, in addition to forming a council to appraise the outline plan for oil and gas field development, the Ministry of Industry and Trade shall consult in writing the Commission for Management of State Capital at Enterprises on the use of capital of the Vietnam Oil and Gas Group.

5. During the appraisal process, if necessary, the Ministry of Industry and Trade may request the Vietnam Oil and Gas Group to select a qualified consulting organization to verify the plan on early production of the oil and gas field. Expenses for hiring verification consultants shall be included in the costs of management and supervision of oil and gas contracts specified at Point c, Clause 4, Article 64 of the Law on Oil and Gas. The consulting organization in charge of verification must be legally and financially independent from the contractor. The verification period must not exceed 90 days.

6. Within 45 days after receiving a valid dossier (including the consulting organization’s verification report, if requested), the appraisal council shall complete the appraisal of the report on early production of the oil and gas field for submission to the Minister of Industry and Trade for consideration and approval.

7. Within 5 working days after receiving the written appraisal from the appraisal council, the Minister of Industry and Trade shall issue a decision approving the report on early production of the oil and gas field.

8. Dossiers, order and procedures for appraisal and approval of adjustments to the plan on early production of oil and gas fields in case the approval of the adjustments falls within the competence of the Ministry of Industry and Trade as specified in Clause 6, Article 47 of the Law on Oil and Gas must comply with this Article.

9. Dossiers, order and procedures for appraisal and approval of adjustments to the plan on early production of an oil and gas field in case the approval of the adjustments falls within the competence of the Vietnam Oil and Gas Group as specified in Clause 5, Article 47 of the Law on Oil and Gas shall be determined on the total cumulative investment in the latest approval of the plan on early production of an oil and gas field and comply with the process issued by the Vietnam Oil and Gas Group.

Article 50. Dossiers, order and procedures for appraisal and approval of plans for oil and gas field development and adjustments thereto

1. Within 18 months after the outline plan for oil and gas field development is approved or within 6 months before the plan on early production of an oil and gas field is completed, based on the plan for oil and gas field development proposed by the contractor, the Vietnam Oil and Gas Group shall, if agreeing with the contractor’s proposal, submit to the Ministry of Industry and Trade 2 dossiers of request for approval of the plan for oil and gas field development (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A report-cum-request for approval of the plan for oil and gas field development;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal and the contractor’s written explanation (if any);

c/ The plan for oil and gas field development, comprising main contents specified in Article 48 of the Law on Oil and Gas;

d/ A sum-up plan for oil and gas field development;

e/ The agreement on joint development of oil and gas fields (if any) on the basis of the agreement-in-principle on joint development of oil and gas fields approved under Article 48 of this Decree;

g/ Other relevant documents.

2. The plan for oil and gas field development shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue establishment decisions and operation regulations of the appraisal council (comprising representatives of related ministries, sectors and organizations) and its assistant team.

3. In case the Vietnam Oil and Gas Group participates in an oil and gas contract as a contractor, in addition to forming a council to appraise the plan for oil and gas field development, the Ministry of Industry and Trade shall consult in writing the Commission for Management of State Capital at Enterprises on the use of capital of the Vietnam Oil and Gas Group.

4. During the appraisal process, if necessary, the Ministry of Industry and Trade may request the Vietnam Oil and Gas Group to select a qualified consulting organization to verify the plan for oil and gas field development. Expenses for hiring verification consultants shall be included in the costs of management and supervision of oil and gas contracts specified at Point c, Clause 4, Article 64 of the Law on Oil and Gas. The consulting organization in charge of verification must be legally and financially independent from the contractor. The verification period must not exceed 90 days.

5. Within 45 days after receiving a valid dossier (including the consulting organization’s verification report, if requested), the appraisal council shall complete the appraisal of the plan for oil and gas field development for submission to the Minister of Industry and Trade for consideration and approval.

6. Within 5 working days after receiving the written appraisal from the appraisal council, the Minister of Industry and Trade shall issue a decision approving the plan for oil and gas development.

7. Dossiers, order and procedures for appraisal and approval of adjustments to the plan for oil and gas development in case the approval of the adjustments falls within the competence of the Ministry of Industry and Trade as specified in Clause 6, Article 48 of the Law on Oil and Gas must comply with this Article.

8. Dossiers, order and procedures for appraisal and approval of adjustments to the plan for oil and gas field development in case the approval of the adjustments falls within the competence of the Vietnam Oil and Gas Group as specified in Clause 5, Article 48 of the Law on Oil and Gas shall be determined on the total cumulative investment in the latest approval of the plan for oil and gas field development and must comply with the process issued by the Vietnam Oil and Gas Group.

Article 51. Dossiers, order and procedures for appraisal and approval of plans on decommissioning of oil and gas structures and adjustments thereto

1. Within 1 year after the commercial production of the first flow of oil and gas from an oil and gas contract’s area, based on the plan on decommissioning of oil and gas structures proposed by the contractor, the Vietnam Oil and Gas Group shall, if agreeing with the contractor’s proposal, submit 2 dossiers of request for approval of the plan on decommissioning of oil and gas structures (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A report-cum-request for approval of the plan on decommissioning of oil and gas structures;

b/ The Vietnam Oil and Gas Group’s evaluation of the contractor’s proposal, and the contractor’s written explanations (if any);

c/ The plan on decommissioning of oil and gas structures, comprising main contents specified in Article 50 of the Law on Oil and Gas;

d/ A sum-up plan on decommissioning of oil and gas structures;

dd/ Other relevant documents.

2. The plan on decommissioning of oil and gas structures shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue establishment decisions and operation regulations of the appraisal council (comprising representatives of related ministries, sectors and organizations) and its assistant team.

3. Within 45 days after receiving a valid dossier, the appraisal council shall complete the appraisal of the plan on decommissioning of oil and gas structures for submission to the Minister of Industry and Trade for consideration and approval.

4. Within 5 working days after receiving the written appraisal from the appraisal council, the Minister of Industry and Trade shall issue a decision approving the plan on decommissioning of oil and gas structures.

5. Dossiers, order and procedures for appraisal and approval of adjustments to the plan on decommissioning of oil and gas structures in case the approval of the adjustments falls within the competence of the Ministry of Industry and Trade as specified in Clause 8, Article 50 of the Law on Oil and Gas must comply with this Article.

6. Dossiers, order and procedures for appraisal and approval of adjustments to the plan on decommissioning of oil and gas structures in case the approval of the adjustments falls within the competence of the Vietnam Oil and Gas Group as specified in Clause 6, Article 50 of the Law on Oil and Gas must comply with the process issued by the Vietnam Oil and Gas Group.

Article 52. Funds for securing the performance of the obligation of decommissioning of oil and gas structures

1. The currency used for making of allocations to funds for securing the performance of the obligation of decommissioning of oil and gas structures is US dollar.

2. The amount to be annually allocated to a fund for securing the performance of the obligation of decommissioning of oil and gas structures (inclusive of value-added tax) shall be determined according to the following formula:

E_n	=	A_n x (B_n - C_(n-1) - I_(n-1))
		D_n

In which:

E_n: The amount to be allocated to the fund in the year n, in USD;

A_n:The oil and gas production output of the year n, determined by the actual production output in such year, in barrel of oil equivalent;

B_n: The total expense for decommissioning of oil and gas structures, updated by the year n, B_n = (b₁ - b₂), in which:

b₁: The total expense for decommissioning of oil and gas structures as estimated in the last approved plan on decommissioning of oil and gas structures, in USD;

b₂: The estimated expense for decommissioning of oil and gas structures determined in the last approved plan on decommissioning of oil and gas structures corresponding to the equipment items, assets, or facilities that have been decommissioned by the year (n-1), in USD;

C_(n-1): The balance of the fund on December 31 of the year (n-1), determined by summing the balances of all accounts deposited to the fund by the Vietnam Oil and Gas Group for the corresponding oil and gas field, which are verified in writing by concerned credit institutions, in USD;

I_(n-1): The interests on bank deposits that organizations and individuals receive after the Vietnam Oil and Gas Group, on the former’s behalf, fulfills the obligations to the state budget (if any) for the year n-1;

D_n: The remaining volume of recoverable oil and gas reserves, D_n = d₁ - d₂, in which:

d₁: The volume of recoverable oil and gas reserves by the end of the year n, determined in the oil and gas field development plan or plan on early production of the oil and gas field approved by competent agencies, in barrel of oil equivalent;

d₂: The total oil and gas output which is accumulated from relevant oil and gas field(s) by the year (n-1), in barrel of oil equivalent.

3. Before terminating oil and gas production at an oil and gas field or terminating an oil and gas contract ahead of schedule, the contractor(s) shall make sufficient allocation to the fund for securing the performance of the obligation of decommissioning of oil and gas structures according to the last approved plan on decommissioning of oil and gas structures.

4. Within 1 year before an oil and gas contract terminates or the duration of oil and gas production at an oil and gas field expires according to the approved oil and gas field development plan or amended oil and gas field development plan, the contractor(s) shall update the plan on decommissioning of oil and gas structures for submission to a competent agency for approval under Article 51 of this Decree.

5. In case the balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures under an oil and gas contract is lower than the expense estimates under the last approved plan on decommissioning of oil and gas structures, within 6 months before the oil and gas contract terminates or the duration of oil and gas production expires, each of the contractors shall make an additional contribution to the fund according to their participating interests in the oil and gas contract. When necessary, the Vietnam Oil and Gas Group shall request contractors to provide bank guarantees to secure their obligations of decommissioning of oil and gas structures with the guaranteed amount equivalent to the deficit amount.

6. In case the balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures under an oil and gas contract exceeds the expense estimates under the last approved plan on decommissioning of oil and gas structures, the disparity shall be handled upon account-finalization under Article 54 of this Decree or refunded to the contractor(s) at the time the Vietnam Oil and Gas Group acquires the rights to use the fund (in case the contractor(s) is/are allowed to retain the entire or a part of the oil and gas structures) on the condition that the contractor(s) fulfill(s) all financial obligations to the host country in accordance with the terms and clauses of the oil and gas contract and relevant laws. The disparity already refunded to the contractor(s) shall be handled on the principles specified in Clause 5, Article 54 of this Decree.

7. In case the signed oil and gas contract contains an agreement on measures for securing the performance of the obligation of decommissioning of oil and gas structures which is different from those specified in this Decree, the contractor(s) shall comply with such agreement.

Article 53. Management and use of funds for securing the performance of the obligation of decommissioning of oil and gas structures

1. Funds for securing the performance of the obligation of decommissioning of oil and gas structures shall be used for decommissioning of oil and gas structures. Contractors may use fund amounts for performance of the obligation of decommissioning of oil and gas structures according to approved plans on decommissioning of oil and gas structures.

2. In case a contractor fails to decommission oil and gas structures according to the approved plan on decommissioning of oil and gas structures because the Vietnam Oil and Gas Group cannot refund the amount the contractor has allocated to the fund to the contractor, the contractor shall be relieved from the obligation of decommissioning of oil and gas structures in correspondence to the amount the Vietnam Oil and Gas Group cannot refund and the Vietnam Oil and Gas Group shall be held responsible for the decommissioning of the oil and gas structures not yet decommissioned.

3. In case a contractor is not required to decommission or only required to decommission a part of the oil and gas structures, the whole or part of the fund for securing the performance of the obligation of decommissioning of oil and gas structures corresponding to the entire or part of the retained oil and gas structures shall still be managed by the Vietnam Oil and Gas Group and directly used for decommissioning of the oil and gas structures when they are no longer needed for oil and gas activities or no longer safe for oil and gas production. In this case, the Vietnam Oil and Gas Group shall coordinate with the contractor in determining the value of the fund at the time it acquires the right to use the fund and the contractor shall make an additional allocation to make up the deficit, which shall be determined according to the procedures specified in Article 52 of this Decree. After the contractor makes additional allocation to the fund to make up the deficit and hands over the right to use the fund to the Vietnam Oil and Gas Group, the contractor shall be relieved from the obligation of decommissioning of the whole or part of the oil and gas structures not yet decommissioned, and at the same time, relieved from the obligation to make contribution to cover the deficit which might occur in the future when carrying out the decommissioning of oil and gas structures.

4. Annually, the Vietnam Oil and Gas Group shall carry out the auditing of, and certify the amounts allocated to funds for securing the performance of the obligation of decommissioning of oil and gas structures, amounts disbursed from the funds, and the actual expenses of the work performed by contractors.

Article 54. Account-finalization of funds for securing the performance of the obligation of decommissioning of oil and gas structures

1. Within 9 months after the decommissioning of the whole or part of oil and gas structures in the area under an oil and gas contract finishes, the contractor shall make a report on completion of the decommissioning of the whole or part of oil and gas structures for submission to the Vietnam Oil and Gas Group for approval and reporting to the Ministry of Industry and Trade for monitoring.

2. The principal contents of a report on completion of decommissioning of oil and gas structures include:

a/ Description of the oil and gas structures and the actual decommissioning work that have been performed;

b/ Progress of decommissioning of the oil and gas structures;

c/ Assessment of changes between the actual decommissioning work and that under the approved plan (if any);

d/ Actual decommissioning expense;

dd/ Summary of the works that have been performed to ensure environmental safety, including plans on collection, transport and treatment of wastes and discarded materials already implemented;

e/ Commitment to take responsibility for retained structures (if any).

3. The proceeds from liquidation of discarded materials collected during and after the decommissioning of oil and gas structures shall be recorded and handled when making account-finalization of the fund under Clauses 4 and 5 of this Article.

4. Within 30 days after the Vietnam Oil and Gas Group approves the report on completion of decommissioning of oil and gas structures, the contractor shall coordinate with the Vietnam Oil and Gas Group in making account-finalization of expenses for decommissioning of oil and gas structures (covering the proceeds from liquidation of discarded materials specified in Clause 3 of this Article).

5. In case a contractor decommissions oil and gas structures at the end of the oil and gas contract, after making account-finalization and fulfilling financial obligations under the oil and gas contract, the remaining balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures shall be handled as follows:

a/ In case the contractor has recovered the entire amount it/he/she has allocated to the fund, after all financial obligations under the oil and gas contract are fulfilled, the fund balance shall be divided to the contractor and the Vietnam Oil and Gas Group according to the profit oil-sharing ratio applicable to the highest production scale implemented during the term of the oil and gas contract.

b/ In case the contractor has yet to recover the entire amount it/he/she has allocated to the fund, the remainder of the fund shall be firstly refunded to the contractor for offsetting the amount not yet recovered. After all financial obligations under the oil and gas contract are fulfilled, the remainder (if any) shall be divided to the contractor and the Vietnam Oil and Gas Group according to the profit oil-sharing ratio applicable to the highest production scale implemented during the term of the oil and gas contract.

6. In case the Vietnam Oil and Gas Group receives the fund and carries out the decommissioning of the oil and gas structures by itself, after making account-finalization, the fund balance shall be remitted into the state budget.

7. Annually, the Vietnam Oil and Gas Group shall report to the Ministry of Industry and Trade and Ministry of Finance on the management, use and account-finalization of funds for securing the financial obligation for decommissioning of oil and gas structures.

Article 55. Dossiers, order and procedures for approval of the retention, postponement of decommissioning, or decommissioning of part or the whole of oil and gas structures

1. Pursuant to Clause 2, Article 52 of the Law on Oil and Gas, based on the proposal of the contractor, the Vietnam Oil and Gas Group shall, if agreeing with such proposal, submit to the Ministry of Industry and Trade 2 dossiers of request for approval of the retention, postponement of decommissioning or decommissioning of part or the whole of oil and gas structures (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). Such a dossier must comprise:

a/ A written request for retention, postponement of decommissioning or decommissioning of part or the whole of oil and gas structures;

b/ The Vietnam Oil and Gas Group’s assessment of the contractor’s proposal; and the contractor’s explanations (if any);

c/ Other relevant documents (if any);

2. Within 5 working days after receiving a valid dossier, the Ministry of Industry and Trade shall send it to the Ministry of Natural Resources and Environment, Ministry of Transport, Ministry of Planning and Investment, Ministry of National Defense, and related ministries and sectors for the latter’s opinions.

3. Within 15 days after receiving the dossier from the Ministry of Industry and Trade for their opinions, ministries and sectors shall send to the Ministry of Industry and Trade their written opinions on issues falling under their state management.

4. Within 45 days after receiving a valid dossier, the Ministry of Industry and Trade shall issue a written approval of the retention, postponement of decommissioning or decommissioning of part or the whole of oil and gas structures.

5. In case the Vietnam Oil and Gas Group proposes the retention, postponement of decommissioning or decommissioning of part or the whole of oil and gas structures, the procedures for proposal and approval must comply with Clauses 1, 2, 3 and 4 of this Article.

6. In case a competent agency requests the retention of part or the whole of oil and gas structures, the Ministry of Industry and Trade shall notify thereof in writing to the Vietnam Oil and Gas Group and contractor(s) at least 6 months before the commencement of decommissioning work according to the approved schedule.

7. The Ministry of Industry and Trade shall specify the preservation and destruction of oil and gas wells and decommissioning of oil and gas structures.

Chapter VII

INCENTIVES FOR OIL AND GAS ACTIVITIES

Article 56. Criteria for identification of oil and gas blocks in deep or offshore waters or areas with extremely difficult geographical conditions or complicated geological characteristics; marginal oil and gas fields

1. Oil and gas blocks in deep or offshore waters or areas with extremely difficult geographical conditions or complicated geological characteristics mean oil and gas blocks of which:

a/ The shallowest point is at least 150 m deep;

b/ The closest point to the shore is at least 150 km from the shore.

2. Marginal oil and gas fields are those with the internal rate of return, calculated in US dollar, for the entire project lifetime is below 10% and lower than the weighted average cost of capital.

Article 57. Dossiers, order and procedures for appraisal and approval of lists of oil and gas blocks and fields eligible for investment incentive and special investment incentive policies

1. Based on the subjects eligible for incentives specified in Article 53 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall formulate lists of oil and gas blocks and fields eligible for investment incentive and special investment incentive policies, and submit to the Ministry of Industry and Trade 2 dossiers (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post) for appraisal. Such a dossier must comprise:

a/ A report-cum-request for approval of the lists of oil and gas blocks and fields eligible for investment incentive and special investment incentive policies;

b/ Assessment of the conformity with the criteria specified in Article 53 of the Law on Oil and Gas, enclosed with the specific calculation for each of oil and gas block or field in the equivalent list (including also the assessment of the projects’ economic efficiency);

c/ Other relevant documents.

2. Within 5 working days after receiving the valid dossier, the Ministry of Industry and Trade shall send it to the Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of Natural Resources and Environment, Ministry of National Defense, Ministry of Public Security and related ministries and sectors for the latter’s opinions.

4. Within 45 days after receiving the valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the lists of oil and gas blocks and fields eligible for investment incentive and special investment incentive policies, and submit them to the Prime Minister for consideration and approval. Such a dossier must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of the lists of oil and gas blocks and fields eligible for investment incentive and special investment incentive policies;

b/ The dossier specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of such written opinions.

5. Annually, the Vietnam Oil and Gas Group shall review and evaluate the negotiation and signing of oil and gas contracts and implementation of oil and gas activities at oil and gas blocks and fields, and propose adjustments to the lists of oil and gas blocks and fields eligible for investment incentive and special investment incentive policies (when necessary) and report such to the Ministry of Industry and Trade for appraisal and submission to the Prime Minister for approval under this Article.

Chapter VIII

ENHANCED OIL RECOVERY AT OIL AND GAS FIELDS, FIELD CLUSTERS AND BLOCKS

Article 58. Principles of enhanced oil recovery at oil and gas fields, field clusters and blocks

1. The enhanced oil recovery at oil and gas fields, field clusters and blocks shall be conducted according to the mechanisms on operation of enhanced oil recovery at oil and gas fields, field clusters and blocks promulgated by the Prime Minister under Article 60 of this Decree in conformity with the characteristics of each oil and gas field, field cluster and block.

2. Oil and gas activities at oil and gas fields, field clusters and blocks opened for enhanced oil recovery must ensure safety, thrifty, efficiency, strict control of expenses based on economic and technical norms approved or promulgated by competent agencies, and conformity with relevant laws.

3. The Vietnam Oil and Gas Group shall directly manage and operate the enhanced oil recovery at oil and gas fields, field clusters and blocks; and may select and assign operation units that have sufficient financial and technical capacities and experience in oil and gas activities to operate enhanced oil recovery, ensuring the efficiency thereof.

4. The dossiers, order and procedures for appraisal and approval of additional investment must comply with Clause 5, Article 44 of the Law on Oil and Gas, and Articles 48 and 50 of this Decree.

Article 59. Major contents of the mechanism on operation of enhanced oil recovery at oil and gas fields, field clusters and blocks

1. General information on oil and gas fields, field clusters and blocks opened for enhanced oil recovery.

2. The principles of operation of oil and gas activities for oil and gas fields, field clusters and blocks opened for enhanced oil recovery specified in Article 58 of this Decree.

3. The revenue from sale of oil and gas obtained from enhanced oil recovery at an oil and gas field, field cluster or block and other revenues (if any) shall be used for the following purposes:

a/ To make payment for, and refund of, all reasonable and legitimate expenses already made during the implementation of oil and gas activities under the approved operation program and budget;

b/ To make advance payment for expenses estimated for the subsequent phase in conformity with the approved operation program and budget; to make advance payment for procurement of supplies and use of services serving oil and gas activities while products are yet to be sold and in case the revenue from sale of oil and gas is insufficient to cover reasonable and legitimate expenses of oil and gas activities or for unpredictable events or decommissioning of oil and gas structures in case the fund for securing the performance of the obligation of decommissioning of oil and gas structures is insufficient to cover expenses for the decommissioning work;

c/ To cover expenses already made for additional investment to maintain oil and gas production output; and making allocations to the fund for securing the performance of the obligation of decommissioning of oil and gas structures for additionally invested work items (if any).

4. To annually remit to the state budget the following amounts:

a/ The remainder left after all revenues are used for the purposes specified in Clause 3 of this Article;

b/ The remainder of the state budget fund (if any) in case the expenses incurred by the end of the period is lower than the approved budget fund;

c/ Generated interest amounts (if any) on the balances of provisional amounts permitted to be retained at the end of a fiscal year;

d/ The balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures left after the obligation of decommissioning of oil and gas structures is fulfilled (if any), which shall be determined based on the auditing result under regulations;

dd/ The surplus (if any) between the revenue from the liquidation of assets no longer needed for oil and gas activities, and equipment, means, supplies and discarded materials collected in the process of decommissioning of oil and gas structures and the corresponding actual reasonable and legitimate expense on a-case-by-case basis.

5. The enhanced oil recovery at an oil and gas field, field cluster or block shall be terminated in one of the following cases:

a/ The revenue is estimated to be insufficient for payment of expenses;

b/ Work items and equipment of the oil and gas field, field cluster or block are in an unsafe state;

c/ Other force majeure events that lead to impossibility to further implement oil and gas activities.

6. Responsibilities of the Vietnam Oil and Gas Group for enhanced oil recovery at oil and gas fields, field clusters and blocks

a/ To organize the enhanced oil recovery at oil and gas fields, field clusters and blocks in a safe and efficient manner;

b/ To formulate and approve annual operation programs and budgets;

c/ To formulate and approve the process for selection of contractors for services provision and goods procurement serving enhanced oil recovery at oil and gas fields, field clusters and blocks in accordance with the Law on Oil and Gas and in adherence to the principles applicable to oil and gas contracts;

d/ Quarterly, to report to the Prime Minister on enhanced oil recovery at oil and gas fields, field clusters and blocks, which must contain assessment of the profit or loss and unexpected developments in enhanced oil recovery at oil and gas fields, field clusters and blocks (if any) and handling measures;

dd/ To decide on the termination of enhanced oil recovery activities and decommissioning of oil and gas structures;

e/ To carry out financial auditing and period-end auditing (if any); based on the audit reports, to approve the account-finalization reports on the enhanced oil recovery at oil and gas fields, field clusters and blocks and approve the account-finalization of expenses for decommissioning of oil and gas structures;

g/ To decommission oil and gas structures in accordance with the Law on Oil and Gas and this Decree after enhanced oil recovery at oil and gas fields, field clusters and blocks terminates.

Article 60. Dossiers, order and procedures for appraisal and approval of mechanisms on operation of the enhanced oil recovery at oil and gas fields, field clusters and blocks

1. Pursuant to Point c, Clause 2, and Point b, Clause 3, Article 41 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall formulate a mechanism on operation of the enhanced oil recovery at each oil and gas field, field cluster or block in conformity with the nature and characteristics of the oil and gas field, field cluster or block and submit to the Ministry of Industry and Trade 2 dossiers of request for approval of the mechanism on operation of the enhanced oil recovery at an oil and gas field, field cluster or block (including one original dossier and the other comprising copies thereof, to be hand-delivered or sent by post). The dossier must comprise:

a/ A report-cum-request for approval of the mechanism on operation of the enhanced oil recovery at an oil and gas field, field cluster or block;

b/ The draft mechanism on operation of the enhanced oil recovery at the oil and gas field, field cluster or block, covering major contents specified in Article 59 of this Decree;

c/ Other relevant documents.

2. Within 5 working days after receiving the valid dossier, the Ministry of Industry and trade shall send it to the Ministry of Planning and Investment, Ministry of Justice and Ministry of Natural Resources and Environment, and the Commission for the Management of State Capital at Enterprises and related ministries and sectors for the latter’s opinions.

4. Within 45 days after receiving the complete and valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the mechanism on operation of the enhanced oil recovery at the oil and gas field, field cluster or block for submission to the Prime Minister for approval. The dossier to be submitted to the Prime Minister must comprise:

a/ A report to the Prime Minister on appraisal results and a request for approval of the mechanism on operation of the enhanced oil recovery at the oil and gas field, field cluster or block;

b/ The dossier specified in Clause 1 of this Article;

c/ A sum-up report on assimilation and explanation of opinions of ministries and sectors and copies of such written opinions.

Article 61. Mechanisms on management, accounting, and use of assets received from contractors for enhanced oil recovery at oil and gas fields, field clusters and blocks

1. In order to carry out the enhanced oil recovery at an oil and gas field, field cluster or block, the Vietnam Oil and Gas Group shall receive in status quo information, data, materials, specimens, oil and gas structures, and other assets installed and invested under the terminated oil and gas contract according to the agreement signed with the contractor; and may use free of charge such information, data, materials, specimens, oil and gas structures, and other assets.

2. The Vietnam Oil and Gas Group shall manage and make a separate report to monitor, the information, data, materials, specimens, oil and gas structures, and other assets received under Clause 1 of this Article and update additional investment value, which is specifically stipulated in the Prime Minister’s decision approving the mechanism on operation of the enhanced oil recovery at the oil and gas field, field cluster or block but must not be recorded as state capital invested at the enterprise and included in its financial statements.

3. Upon termination of enhanced oil recovery at oil and gas fields, field clusters and blocks and completion of the decommissioning of oil and gas structures, the Vietnam Oil and Gas Group shall continue managing the information, data, materials, specimens, and other assets (if any) in accordance with the Law on Oil and Gas and this Decree.

Chapter IX

ACCOUNT-FINALIZATION OF OIL AND GAS ACTIVITIES UNDER OIL AND GAS CONTRACTS

Article 62. Account-finalization of expenses for oil and gas activities under oil and gas contracts

1. The account-finalization of expenses for oil and gas activities under an oil and gas contract shall be implemented for each period or each phase of the oil and gas contract, or upon the termination of the oil and gas project or component project of the oil and gas project and when the oil and gas contract expires in accordance with the terms and clauses of the signed oil and gas contract and the Law on Oil and Gas.

2. A contractor shall make a report on the account-finalization of expenses for oil and gas activities at the end of each period or each phase of the oil and gas contract; upon termination the oil and gas project or component project of the oil and gas project; and when the oil and gas contract expires.

3. The Vietnam Oil and Gas Group shall verify and approve reports on account-finalization of expenses for oil and gas activities formulated and submitted by contractors, based on the results of the audits of expenses for oil and gas activities it carries out in conformity with signed oil and gas contracts and the Law on Oil and Gas. The Vietnam Oil and Gas Group may hire independent auditing organizations (when necessary) to audit reports on the account-finalization of expenses for oil and gas activities submitted by contractors.

Chapter X

IMPLEMENTATION PROVISIONS

Article 63. Effect

1. This Decree takes effect on July 1, 2023, and replaces the Government’s Decree No. 95/2015/ND-CP of October 16, 2015, detailing a number of articles of the Law on Oil and Gas, and the Government’s Decree No. 33/2013/ND-CP of April 22, 2013, promulgating the contract form on division of oil and gas products.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall implement this Decree.

Article 64. Transitional provisions

1. For oil and gas contracts which have been granted certificates of investment registration before the effective date of this Decree, the competence, dossiers, order, and procedures for appraisal and approval of new reports, plans and programs or amendments to existing ones after the effective date of this Decree must comply with this Decree.

2. Joint operating companies representing contractors operating oil and gas activities which are established before the effective date of this Decree may continue operating in conformity with the terms and clauses of relevant oil and gas contracts.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
TRAN HONG HA

* The Appendix to this Decree is not translated.

^{^[1]} Công Báo Nos 829-830 (17/7/2023)

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