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

DECREE

Detailing a number of articles of the Law on Oil and Gas

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

Pursuant to the Law on Oil and Gas dated June 17, 2020;

At the proposal of the Minister of Industry and Trade;

The Government hereby 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 Degree 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 to sign oil and gas contracts; oil and gas contracts; safety in oil and gas activities; dossiers, order and procedures for conducting oil and gas activities and projects; incentives for oil and gas activities; enhanced oil recovery at the oil and gas field, field cluster or 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. Bidders mean organizations and individuals registering for participation in the selection of contractors for signing oil and gas contracts.

2. Electronic dossier means one that consists of electronic files of the documents included in the original dossier, other than confidential documents as specified by the law.

3. Original dossier includes documents, papers and documents that are originals, original copies or valid photocopies. For documents, papers and documents in foreign languages, the originals must undergo consular legalization procedures, unless otherwise exempted from consular legalization in accordance with Vietnamese laws and treaties to which Vietnam is a member.

4. Minimum work commitment and minimum financial commitment means the minimum workload, along with a commensurate minimum amount of money, which the contractor commits to performing within a specific period of time specified in the oil and gas contract.

5. Valid dossier means one that consists of all the required documents as specified in the Law on Oil and Gas and this Decree.

6. Ratio of oil and gas divided as profits means a ratio that determines the products divided between stakeholders in proportion to the production output scale after being allocated to pay royalty and recover costs as agreed in the oil and gas contract.

Chapter II

BASIC OIL AND GAS INVESTIGATION

Article 3. Development and approval of the list of schemes on basic oil and gas investigation;

1. The list of schemes on basic oil and gas investigation shall be developed and approved for a period of 5 years in accordance with the strategies and master plans on energy and mineral resources, and the plans on implementation thereof; shall be reviewed and updated annually.

2. Before March 1 of the last year of each five-year socio-economic development period in accordance with the Resolution of the National Assembly, organizations that satisfy the conditions specified in Article 12 of the Law on Oil and Gas and Article 4 of this Decree shall propose schemes on basic oil and gas investigation for the next five-year socio-economic development period to the Vietnam Oil and Gas Group to review, evaluate, summarize and propose a list of schemes on basic oil and gas investigation, including the schemes of which the Vietnam Oil and Gas Group and State authorities are in charge.

3. Before May 1 of the last year of the five-year socio-economic development period in accordance with the Resolution of the National Assembly, the Vietnam Oil and Gas Group shall send 02 dossiers to the Ministry of Industry and Trade (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) proposing the list of schemes on basic oil and gas investigation. Such dossier consists of:

a) A written proposal for the list of schemes on basic oil and gas investigation, made by the Vietnam Oil and Gas Group;

b) Written proposals for the schemes on basic oil and gas investigation of the proposing entities, each of which shall contain: the main contents of the scheme as specified in Clause 1, Article 10 of the Law on Oil and Gas; documents evidencing the satisfaction of conditions for conducting the scheme as specified in Article 12 of the Law on Oil and Gas and Article 4 of this Decree; preliminary plans to coordinate with relevant organizations and individuals in the case where the basic oil and gas investigation scheme is proposed to be conducted in the area in which eligible entities have been assigned to conduct basic geological investigation of minerals or exploration and exploitation of minerals in accordance with the law on minerals;

c) Assessment of the Vietnam Oil and Gas Group on the proposal dossier of each scheme; the proposing entity’s written receipt and explanation (if any);

d) Other relevant documents.

4. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Natural Resources and Environment, the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Public Security, the Ministry of Transport, and other relevant ministries, sectors and localities to collect their opinions thereon.

5. Within 15 days from the date of receiving from the Ministry of Industry and Trade the dossier on which they are requested to give their opinions, the ministries, sectors and localities shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

6. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the assessment and the list of schemes on basic oil and gas investigation and submit them to the Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister requesting his/her approval of the list of schemes on basic oil and gas investigation;

b) Dossiers as specified in Clause 3 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

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

a) The Ministry of Industry and Trade shall notify the agencies or organizations in charge of implementing the schemes on basic oil and gas investigation to prepare and submit the detailed outlines and cost estimates for the implementation of the schemes as specified in Article 5 of this Decree, and at the same time notify the Vietnam Oil and Gas Group;

b) The Ministry of Finance shall assume the prime responsibility for summing up the budget for implementing the schemes on basic oil and gas investigation funded by the State budget into the annual State budget estimate, and report it to the Government for submission to the National Assembly in accordance with the State Budget Law.

8. On an annual basis, the Vietnam Oil and Gas Group shall review the list of schemes on basic oil and gas investigation and the implementation of each scheme, then report to the Ministry of Industry and Trade, and submit the adjusted list of schemes on basic oil and gas investigation to the Prime Minister for approval (if necessary). The dossiers, order and procedures for appraisal and approval of the adjusted list of the schemes on basic oil and gas investigation shall comply with Clauses 3, 4, 5 and 6 of this Article.

Article 4. Conditions for organizations in charge of conducting basic oil and gas investigation

Organizations in charge of conducting basic oil and gas investigation must have sufficient financial and technical capacity and experience in basic oil and gas investigation and satisfy the following conditions:

1. They have proven financial capacity to implement the schemes on basic oil and gas investigation by one or concurrently a number of the following:

a) Self-funding by their resources or their holding companies’ guarantees;

b) Guarantees or capital sponsorship/loan commitments of credit institutions and financial institutions.

2. They have plan to mobilize machinery, equipment and human resources to meet the technical requirements for implementing the schemes.

3. They have participated in at least 01 scheme on basic oil and gas investigation or 01 scheme on basic geological investigation of minerals or 01 oil and gas contract.

4. They commit to complying with the requirements for national defense and security as specified by the law and are not currently banned from engaging in basic oil and gas investigation and oil and gas activities.

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

1. A detailed outline and cost estimate for the implementation of a scheme on basic oil and gas investigation shall contain the following main contents:

a) Legal basis and scientific justification for the formulation of the scheme;

b) Area where the investigation is conducted (geographical location, coordinates, land area thereof);

c) Geographical and socio-economic characteristics of the area where the investigation is conducted;

d) Technical documents serving as the basis for the formulation of the scheme;

dd) Subject, objectives and tasks of the scheme;

e) Technical methods and expected workload; standards, technical regulations, economic and technical norms (if any) to be applied in the implementation of the scheme;

g) Expected outcomes and products after the end of the scheme;

h) Implementation plan and schedule;

i) Sources and estimates of funds;

k) Plan to coordinate with relevant organizations and individuals in the case where the basic oil and gas investigation scheme is proposed to be conducted in the area in which eligible entities have been assigned to conduct basic geological investigation of minerals or exploration and exploitation of minerals in accordance with the law on minerals.

l) Other contents (if any).

2. Within 60 days from the date of receiving the notice from the Ministry of Industry and Trade as specified at Point a, Clause 7, Article 3 of this Decree, based on the detailed outline and cost estimate of the scheme on basic oil and gas investigation prepared by the organization in charge of implementing such scheme and consulted by the Vietnam Oil and Gas Group, the organization in charge of implementing such schemes on basic oil and gas investigation shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the detailed outline and cost estimate of the scheme. Such dossier consists of:

a) A written request for approval of the detailed outline and cost estimate for the implementation of the scheme on basic oil and gas investigation;

b) The detailed outline and cost estimate of the scheme as specified in Clause 1 of this Article; appendices, drawings, other documents attached thereto (if any);

c) A written notice of the Ministry of Industry and Trade to the organization in charge of implementing the scheme on basic oil and gas investigation;

d) A document identifying the sources of funds for the scheme in the case where the scheme on basic oil and gas investigation is funded by the State budget in accordance with the allocation principles, criteria and norms in each period approved by the competent authority;

dd) Opinions of the Vietnam Oil and Gas Group on the detailed outline and cost estimate of the scheme on basic oil and gas investigation prepared by the organization in charge of implementing such scheme; written receipt and explanation of the organization in charge of implementing the scheme (if any);

e) The draft agreement between the Vietnam Oil and Gas Group and the organization other than the State agency or State-owned enterprise in charge of implementing the scheme on basic oil and gas investigation in the case specified at Point b, Clause 3, Article 10 of the Law on Oil and Gas, which contains the following main contents: area where the investigation is conducted; rights and obligations of the Vietnam Oil and Gas Group and such organization during the implementation of the scheme; the organization's commitment to retaining and preserving specimens, documents, information and data during the implementation of the scheme; general terms of the agreement;

g) Other relevant documents.

3. The detailed outlines and cost estimates of the schemes on basic oil and gas investigation shall be appraised by appraisal councils. The Minister of Industry and Trade shall issue a decision to establish such an appraisal council (composed of representatives of relevant ministries and sectors) as well as the operational regulations for the appraisal council and its teams of specialist assistants.

4. Within 45 days from the date of receiving a valid dossier, the appraisal council shall complete the appraisal of the detailed outline and cost estimate of the scheme on basic oil and gas investigation and submit it to the Minister of Industry and Trade for consideration and approval.

5. Within 05 working days from the date of receiving the appraised documents from the appraisal council, the Minister of Industry and Trade shall issue a decision to approve such detailed outline and cost estimate of the scheme on basic oil and gas investigation.

Article 6. Implementation of schemes on basic oil and gas investigation

1. The organization in charge of implementing a scheme on basic oil and gas investigation shall:

a) Properly implement the approved scheme;

b) Notify in writing to the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment, the Ministry of Transport, the Ministry of National Defense, the Ministry of Public Security, the Ministry of Foreign Affairs, the relevant provincial-level People's Committee and the Vietnam Oil and Gas Group at least 15 days before commencing on-site work.

2. While conducting basic oil and gas investigation, if other natural resources and minerals are discovered, organizations and individuals must immediately report in writing to the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment, the provincial-level People's Committee of the locality where the work is conducted, and the Vietnam Oil and Gas Group; protect unexploited minerals in accordance with the law on minerals, refrain from taking advantage of the basic oil and gas investigation to exploit minerals.

3. During the implementation of the scheme on basic oil and gas investigation, the organization in charge of implementing such scheme may request for permission to adjust the detailed outline and cost estimate of the scheme depending on the actual situation when implementing the scheme on site. The organization in charge of implementing the scheme shall send a written request for adjustment of the detailed outline and cost estimate of the scheme, which clearly states the progress and workload that have been done, the reasons for adjustment and the proposed adjustments to the scheme, to the Vietnam Oil and Gas Group for consideration, assessment and further report to the Ministry of Industry and Trade for approval in accordance following the same process as specified in Clauses 3, 4 and 5, Article 5 of this Decree.

Article 7. Inspection and supervision of the implementation of the schemes on basic oil and gas investigation

1. On a quarterly basis (before the last working day of the last month of the quarter) or ad-hoc basis upon request of the Ministry of Industry and Trade, the organization in charge of implementing the scheme on basic oil and gas investigation shall send a written report on the actual implementation of the scheme to the Ministry of Industry and Trade and the Vietnam Oil and Gas Group for supervision.

2. The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with relevant 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, inspecting the implementation of the schemes on basic oil and gas investigation under the inspection plans and contents of inspection approved by the Minister of Industry and Trade.

3. The Vietnam Oil and Gas Group shall coordinate with functional agencies and units of relevant ministries, sectors and localities in implementing field supervision of the basic oil and gas investigation scheme.

Article 8. Pre-acceptance tests and approval of the outcomes of schemes on basic oil and gas investigation

1. A pre-acceptance test of the outcomes of a scheme on basic oil and gas investigation shall cover the following main issues:

a) Assessment of the workload, quality and progress of the work items following the approved detailed outline;

b) Assessment of the compliance with technical regulations, the truthfulness in the collection and preparation of documents; the correctness and scientificity of data analysis, processing and aggregation;

c) Assessment of the reliability of the investigation results; new discoveries in oil and gas geology (if any); conclusions on geological, geophysical and other technical characteristics of the subject of investigation;

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

dd) Appraisal of expenditures funded by the State budget (if any) and expenditures of the Vietnam Oil and Gas Group (if any);

e) Assessment of the implementation of the agreement between the Vietnam Oil and Gas Group and the organization other than the State agency or State-owned enterprise in charge of implementing the scheme on basic oil and gas investigation in the case specified at Point b, Clause 3, Article 10 of the Law on Oil and Gas.

2. The pre-acceptance test of outcomes of the scheme on basic oil and gas investigation shall be classified into two levels, including the pre-acceptance test at the grassroots level and the pre-acceptance test at the ministerial level as follows:

a) Pre-acceptance test at the grassroots level, which shall be conducted by the organization in charge of implementing the scheme on basic oil and gas investigation;

b) Pre-acceptance test at the ministerial level, which shall be conducted by the Ministry of Industry and Trade after the results of the grassroots-level pre-acceptance test are available. The ministerial-level pre-acceptance test council shall be established under the decision of the Minister of Industry and Trade. The results of the ministerial-level pre-acceptance test shall serve as the basis for approving the outcomes of the scheme on basic oil and gas investigation.

3. Within 30 days from the date of completing the scheme on basic oil and gas investigation, the organization in charge of implementing the scheme shall organize the pre-acceptance test at the grassroots level.

4. Within 45 days from the date of completing the pre-acceptance test at the grassroots level, after consulting the Vietnam Oil and Gas Group on the outcomes of the scheme on basic oil and gas investigation, the organization in charge of implementing such scheme on basic oil and gas investigation shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting the ministerial-level pre-acceptance test and approval of outcomes of the scheme on basic oil and gas investigation. Such dossier consists of:

a) A written request for ministerial-level pre-acceptance tests and approval of outcomes of the scheme on basic oil and gas investigation;

b) A report on the scheme’s outcomes; appendices, drawings and other documents attached thereto.

c) A summary report on the scheme’s outcomes;

d) A verification report of the consultant hired by the organization in charge (if necessary);

dd) The record of the grassroots-level pre-acceptance test;

e) Opinions of the Vietnam Oil and Gas Group on the outcomes of the scheme on basic oil and gas investigation; written receipt and explanation of the organization in charge of implementing such scheme (if any);

g) A competent agency's decision on approval of or approved adjustments to the scheme;

h) Other relevant documents.

5. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the ministerial-level pre-acceptance test and approve the outcomes of the scheme on basic oil and gas investigation.

6. Within 180 days from the date of receiving the written approval of the outcomes of the scheme on basic oil and gas investigation, the organization in charge of implementing such scheme shall complete the account-finalization of costs for implementing the scheme in accordance with the regulations; send the Ministry of Industry and Trade the results of account-finalization of expenditures from the State budget (if any) and expenditures of the Vietnam Oil and Gas Group (if any) for consideration and approval.

Article 9. Handover of basic oil and gas investigation outcomes

1. Within 60 days from the date of receiving the written approval of the outcomes of the scheme on basic oil and gas investigation, the organization in charge of implementing such scheme shall hand over the specimens (if any) to the Vietnam Oil and Gas Group for retention and preservation, and at the same time, submit 01 paper-based dossier and 01 electronic record (which shall not consist of confidential documents as specified by the regulations, if any) reporting the outcomes of the basic oil and gas investigation to the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment and the Vietnam Oil and Gas Group, including synthesized and source documents as follows:

a) Synthesized documents, including: data sheets and synthesized documents presented as appendices, maps, illustrations that fully show the outcomes of the scheme;

b) Source documents, which are materials collected from fieldwork, including: logs, field books, maps, diagrams, photographs, seismic data tapes, disks; measurements.

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

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

1. The period of time during which the specimens, documents, information and data shall be retained and reserved shall be defined for each type thereof in accordance with the applicable regulations: permanent or time-limited retention period. The body in charge of retention and preservation shall inventory all types of specimens, documents, information and data that are expired and submit the list thereof to the competent authorities for approval of destruction in order to optimize management costs.

2. Specimens, documents, information and data shall be classified into different confidentiality levels (if required) and each type thereof shall be subject to a respective data protection policy as specified in the law.

3. The Vietnam Oil and Gas Group shall be responsible for receiving and managing the specimens and documents submitted by the organizations in charge of implementing the schemes on basic oil and gas investigation as specified in Clause 1, Article 14 of the Law on Oil and Gas and operating the system to be able to exploit such information and documents in accordance with the law regulations.

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

1. Organizations and individuals shall be entitled to access, reference, exploit and use specimens, documents, information, data and reports on outcomes of basic oil and gas investigation as public services and pay charges for exploitation and use of oil and gas documents in accordance with the law on charges and fees, unless otherwise specified in Clause 2 of this Article.

2. Organizations in charge of implementing the schemes on basic oil and gas investigation through an agreement signed with the Vietnam Oil and Gas Group are allowed to use and exploit specimens, documents, information, data and reports on outcomes of basic oil and gas investigation in accordance with the signed agreements; may propose cost recovery when participating in bidding for, and signing oil and gas contracts for oil and gas blocks in areas for which basic oil and gas investigation has been conducted under the schemes.

Chapter III

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

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

1. Pursuant to Article 7 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall make a list of new oil and gas blocks or an adjusted list of oil and gas blocks, and submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) for appraisal. Such dossier consists of:

a) A submittal requesting approval of the list of new oil and gas blocks or the adjusted list of oil and gas blocks;

b) Information about newly formed oil and gas blocks or about the adjustment of the list of oil and gas blocks, including the names, coordinates, area thereof;

c) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Natural Resources and Environment, the Ministry of Planning and Investment, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Public Security, the Ministry of Transport, the Ministry of Construction, and other relevant ministries, sectors and localities to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries, sectors and localities shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal and the list of new oil and gas blocks or the adjusted list of oil and gas blocks and submit them to the Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding appraisal results and requesting his/her approval of the list of new oil and gas blocks or the adjusted list of oil and gas blocks;

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of their written opinions.

Article 13. Dossiers, order and procedures for appraisal and approval of the plan to select contractors to sign oil and gas contracts

1. Pursuant to Point a, Clause 1, Article 24 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall formulate a plan to select contractors to sign oil and gas contracts, and submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) for appraisal. Such dossier consists of:

a) A submittal requesting approval of the plan on selection of contractors to sign oil and gas contracts;

b) The plan to select contractors to sign oil and gas contracts, including the main contents specified in Clause 2, Article 17 of the Law on Oil and Gas and the reasons for proposing the respective contractor selection form for each available oil and gas block; the list of contractors proposed to be invited to participate in the restricted bidding or competitive offer; the applicable type of oil and gas contracts and the reasons for proposing such type; conditions on financial and technical capacity, and experience to be eligible for participating in the bid; draft bidding dossiers, dossiers of invitation for making competitive offers or dossiers of request for contractor appointment 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 the plan to select contractors to sign oil and gas contracts covers the examination and evaluation of the main contents of the contractor selection plan as specified in Clause 2, Article 17 of the Law on Oil and Gas.

3. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Public Security, and other relevant ministries, sectors, and localities to collect their opinions thereon.

4. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

5. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the plan to select contractors to sign oil and gas contracts, and submit it to Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding appraisal results and requesting his/her approval of the plan on selection of contractors to sign oil and gas contracts;

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

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

Article 14. Announcement of the invitation for bid or competitive offer

1. The announcement of the invitation for bid shall be published on 05 daily newspapers and 05 reputable information websites in 05 consecutive days, of which there must be at least 01 English newspaper published on Vietnamese-English domestic or foreign information networks. The announcement of the invitation for bid can also be sent directly to organizations and individuals interested in the oil and gas blocks listed in the invitation for bid or on websites specializing in providing information about oil and gas events in the world.

2. The announcement of the invitation for competitive offer shall be sent directly to organizations and individuals interested in the oil and gas blocks subject to competitive offer.

3. An announcement of the invitation for bid or competitive offer shall contain the following contents:

a) Information about the available oil and gas blocks listed for invitation for bid or competitive offer;

b) List of accessible documents and other relevant information;

c) Time allowed to use the documents as references;

d) Relevant documents and forms (if any).

Article 15. Registration for participation in the bidding

1. Bidders shall send their applications for registering for participation in the bidding to the Vietnam Oil and Gas Group. The time limit for registration shall not exceed 45 days from the last day the announcement of invitation for bid or competitive offer.

2. When registering for participation in the bidding, bidders must provide summary information on financial capacity, technical capacity, expected formation of partnership (if any) and other information as required in the announcement of the invitation for bid or competitive offer.

3. After receiving the applications for registering for participation in the bidding, the bidders may, if they satisfy the requirements specified in Article 16 of the Law on Oil and Gas, receive the bidding dossiers or dossiers of invitation for making competitive offers and access the documents listed in the announcement of the invitation for bid or competitive offer.

Article 16. Issuance of bidding dossiers, dossiers of invitation for making competitive offers, and dossiers of request

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

2. Contents of a bidding document include:

a) Basic economic and technical criteria of the oil and gas contract, including: ratio of oil and gas divided as profits; minimum work commitment and minimum financial commitment; proportion of participating interests of the Vietnam Oil and Gas Group or its subsidiary designated to participate as a contractor; participation right of the host country (via the Vietnam Oil and Gas Group) upon the first commercial discovery in the oil and gas contract area (if applicable); cost recovery rate; commitments to other financial obligations (commissions, training costs, contributions to the oil and gas scientific research and technology development fund); royalty, corporate income tax, crude oil (including condensate) and natural gas export duty, other payable taxes, fees and charges in accordance with the law regulations on taxes, fees and charges;

b) Requirements on financial and technical capacity, experience in implementing oil and gas activities and documents on formation of partnership (if any);

c) Criteria for selection of contractors and methods of evaluating bid dossiers as specified in Article 18 of this Decree;

d) The duration of the contractor selection process and other details on the contractor selection procedures;

dd) Documents and basic information about the oil and gas block;

e) Request for legal documents of bidders: certificate of operation registration, operational charter, financial statements of 03 immediately preceding years or guarantees of holding companies, as for corporate bidders; citizen identity cards or passports, as for individual bidders, and other relevant documents of the bidders or each member of the partnership participating in the bidding (unless otherwise specified in Article 40 of the Law on Oil and Gas);

g) Instructions for bidders;

h) The oil and gas contract form, which is applicable or proposed to be applied;

i) Requirements on bid security (if necessary) according to a form, including contents on the type, value and duration of bid security;

k) Initial evaluation of oil and gas potential of the relevant oil and gas block;

l) Other relevant documents.

3. Contents of a dossier of invitation for making competitive offers include the contents specified at Points a, b, c, dd, e, g, h, i, k, and l, Clause 2 of this Article.

4. Contents of a dossier of request for contractor appointment include the contents specified at Points a, b, c, dd, e, g, h, i, k, and l, Clause 2 of this Article and the transitional contents from the ongoing oil and gas contract to a new oil and gas contract (if any) in the case of contractor appointment specified at Point c, Clause 1, Article 21 of the Law on Oil and Gas.

Article 17. Receipt of bid dossiers, competitive offer dossiers or dossiers of proposals

1. Bidders shall send their bid dossiers for open bidding or restricted bidding, or competitive offer dossiers for competitive offer or dossiers of proposals for the form of contractor appointment to the Vietnam Oil and Gas Group within the time limit specified in bidding dossier or dossier of invitation for making competitive offers or dossier of request. The Vietnam Oil and Gas Group shall decide the time limit for submission of bid dossiers or competitive offer dossiers or dossiers of proposals and specify it in the notice of invitation for participation in the bidding, but it shall not exceed 120 days from the date of issuing the bidding dossier or dossier of invitation for making competitive offers or dossier of request.

2. Requirements for bid dossiers, competitive offer dossiers, or dossiers of proposals

a) Be made in accordance with the regulations in the bidding dossier or dossier of invitation for making competitive offers or dossier of request;

b) Be considered valid when they fully satisfy the respective requirements specified in the bidding dossier or dossier of invitation for making competitive offers or dossier of request, and are submitted on time and in the specified manner.

3. Bid opening and management of bid dossiers or competitive offer dossiers or dossiers of proposals

a) The organization of bid opening must comply with the time and manner specified in the bidding dossier or dossier of invitation for making competitive offers or dossier of request;

b) Participants in the bid opening include representatives of the Vietnam Oil and Gas Group, the Ministry of Industry and Trade, the Ministry of Public Security and relevant ministries and sectors (if necessary), and representatives of the bidders;

c) Bid dossiers, competitive offer dossiers, or dossiers of proposals, after being opened, must be managed in confidence in accordance with the law regulations on protection of State secrets during the contractor selection;

d) After the bid opening, the bidders’ addition of documents to the bid dossiers or competitive offer dossiers, or dossiers of proposals has no legal validity, unless such additional documents are specified in Clause 3, Article 19 of this Decree.

Article 18. Criteria for selection of contractors and methods of evaluating bid dossiers, competitive offer dossiers and dossiers of proposals

1. Contractor selection criteria include:

a) 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 (in case of partnership, the contractor's capacity and experience shall be determined as the aggregated capacity and experience of the partners); related contracts and agreements that have been implemented (if any);

b) Criteria on technical conditions suitable to each oil and gas block, including: minimum work commitment (new explosion, reprocessing seismic data, number of wells); commitment to field development and exploitation; deployment plans and optimal technology for oil and gas activities, which satisfy the requirements of environmental protection and minimize carbon dioxide emissions;

c) Criteria on economic conditions suitable for each oil and gas block, including: Suitable tax rates in accordance with the law on taxes, and surcharges when oil prices rise; the ratio of oil and gas divided as profits to the host country; proportion of participating interests of the host country (via the Vietnam Oil and Gas Group) upon the first commercial discovery in the oil and gas contract area (if applicable); proportion of participating interests of the Vietnam Oil and Gas Group or its subsidiary designated to participate as a contractor; cost recovery rate; financial commitment in proportion to  the minimum work commitment; commitments to other financial obligations (commissions, training costs, contributions to the oil and gas scientific research and technology development fund).

2. Methods of evaluation of bid dossiers, competitive offer dossiers or dossiers of proposals include:

a) For criteria of capacity and experience: “Qualified” or “unqualified”;

b) For criteria on technical conditions suitable for each oil and gas block: Satisfactory or not, and graded on a 100-point scale;

c) For criteria on economic conditions suitable for each oil and gas block: graded on a 100-point scale;

d) Sum up of results: The total score will be calculated as follows: Total score = Total score of criteria on technical conditions multiplied (x) by weight of criteria on technical conditions plus (+) Total score of criteria on economic conditions multiplied (x) by weight of criteria on economic conditions. In which, the weight of criteria on technical conditions shall be at least 0.3 depending on the characteristics of each oil and gas block; the weight of technical conditions plus (+) the weight of economic conditions = 1;

dd) A winning bidder is the one that satisfies all the following criteria: He/she/it is “qualified” in terms of capacity and experience; satisfies the requirement of minimum work commitment; has at least the minimum total scores of the criteria on technical conditions and the criteria on economic conditions as specified in the bidding dossier; and has the highest total score as specified at Point d, Clause 2 of this Article.

3. When preparing bidding dossiers, dossiers of invitation for making competitive offer, and dossiers of request, the Vietnam Oil and Gas Group must develop and approve the criteria for selection of contractors and methods of evaluating bid dossiers, competitive offer dossiers and dossiers of proposals, which shall be suitable to the characteristics of each oil and gas block.

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

1. The Vietnam Oil and Gas Group shall establish an expert group to evaluate bid dossiers, competitive offer dossiers or dossiers of proposals. The expert group shall be composed of individuals who are qualified and experienced and have training certificates in bidding in accordance with the law regulations on bidding. It shall operate in accordance with the regulations issued by the Vietnam Oil and Gas Group.

2. The evaluation of bids or dossiers of invitation for making competitive offer or dossier of request shall be based on the approved criteria for selection of contractors and methods of evaluating bid dossiers, competitive offer dossiers and dossiers of proposals.

3. The Vietnam Oil and Gas Group may request the bidders to clarify their respective bid dossiers, competitive offer dossiers or dossiers of proposals in writing. Within 05 days from the date of receiving the request of the Vietnam Oil and Gas Group, the bidders must reply in writing. Clarification of a bid dossier or a competitive offer dossier or a dossier of proposals means provision of information explaining contents upon request, without changing the main contents of such bid dossier or competitive offer dossier or dossier of proposals.

4. Bid evaluation shall be conducted within 30 days from the date of bid opening.

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

1. Within 15 days from the date of completing evaluation of the results of selection of contractors to sign oil and gas contracts, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting the approval of such results for them to conduct the appraisal. Such dossier consists of:

a) A submittal of bid evaluation results and proposed selection of the contractors to sign oil and gas contracts, enclosed with the respective sets of economic and technical conditions of the oil and gas contracts;

b) The bidding dossier, dossier of invitation for making competitive offers, or dossier of request;

c) The bid dossiers, competitive offer dossiers, or dossiers of proposals;

d) The record of bid opening;

dd) The record of bid evaluation, scorecards of bid evaluation;

e) A written request of the Vietnam Oil and Gas Group for clarification of the bid dossiers, competitive offer dossiers, or dossiers of proposals and the bidders’ written replies (if any);

g) Other relevant documents.

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

a) Evaluation of the basis for the organization of contractor selection;

b) Assessment of the compliance with time regulations during contractor selection;

c) Assessment of the suitability of evaluation methods and contractor selection criteria;

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

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

e) Other relevant contents.

3. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

4. Within 15 days from the date of receiving from the Ministry of Industry and Trade the dossier on which they are requested to give their opinions, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

5. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the results of selecting contractors to sign oil and gas contracts, and submit them to the Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding appraisal results and requesting his/her approval of the results of selecting contractors to sign oil and gas contracts;

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

6. Within 15 days from the date of receiving the Prime Minister's written approval of contractor selection results, the Vietnam Oil and Gas Group shall notify the selected bidder of the contractor selection results, the economic and technical conditions of the oil and gas contract, and the plan to negotiate such oil and gas contract.

7. Within 90 days from the date of receiving the notice of contractor selection results from the Vietnam Oil and Gas Group, the contractor and the Vietnam Oil and Gas Group shall complete the negotiation of the oil and gas contract. If the above period of time has passed but the agreement on the contents of the draft oil and gas contract cannot be reached, the Vietnam Oil and Gas Group shall report to the Ministry of Industry and Trade the reasons and propose an extension of the negotiation period for the Ministry of Industry and Trade for consideration and decision.

Chapter IV
OIL AND GAS CONTRACTS

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

1. Within 30 days from the date of completing oil and gas contract negotiation, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting the approval of the contents of such contract for appraisal. Such dossier consists of:

a) A submittal requesting approval of the contents of the oil and gas contract;

b) The draft oil and gas contract which has been agreed upon by the Vietnam Oil and Gas Group and the contractor; written explanation of the differences between the draft oil and gas contract in the bidding dossier or the dossier of invitation for making competitive offer or the dossier of request and the draft oil and gas contract that has been agreed upon;

c) A certified copy of the operation registration certificate, if the contractor is an organization; or a certified copy of the people’s identity card or citizen identity card or passport for the contractor participating in the oil and gas contract is an individual;

d) A letter of guarantee for fulfillment of contractual obligations of the contractor or each contractor in the partnership, which is issued by a credit institution, a foreign bank branch or the holding company of the contractor or each contractor in the partnership upon request of the Vietnam Oil and Gas Group depending on the evaluation results of the contractor's financial statements;

dd) Documents of the contractor or each contractor in the partnership, including: the company's charter, financial statements in 03 immediately preceding years and other relevant legal documents which served as the basis for negotiating the oil and gas contract, and a photocopy of the tax declaration of the latest year if he/she/it is subject to the tax law of Vietnam.

e) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of contents of the oil and gas contract, and submit it to Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding appraisal results and requesting his/her approval of the contents of the oil and gas contract;

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

5. Within 05 working days from the date of receiving the Prime Minister's written approval of the contents of the oil and gas contract, the Vietnam Oil and Gas Group and the contractor shall sign such oil and gas contract.

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

1. Within 05 working days from the date of completing the signing of the oil and gas contract, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 01 original dossier requesting the issuance of the investment registration certificate to the contractor conducting oil and gas activities. Such dossier consists of:

a) A written request for issuance of an investment registration certificate for the signed oil and gas contract to the contractor conducting oil and gas activities;

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

2. Within 15 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall issue the investment registration certificate to the contractor and the Vietnam Oil and Gas Group, and at the same time send the original copies thereof to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Justice and tax offices.

3. Within 30 days from the date on which the contractor fulfills the obligations of the oil and gas contract or the oil and gas contract is invalidated in accordance with Article 35 of the Law on Oil and Gas, whichever is later, the contractor shall return the original investment registration certificate and modified investment registration certificates (if any) and their original copies to the Vietnam Oil and Gas Group for further submission to the Ministry of Industry and Trade.

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

1. Pursuant to Clause 1, Article 28 of the Law on Oil and Gas and at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of modification of the oil and gas contract and issuance of modified investment registration certificate. Such dossier consists of:

a) A written request for approval of modification of the oil and gas contract and issuance of a modified investment registration certificate, which clearly states the reasons therefor; explanation of the modified contents of the oil and gas contract; assessment of the Vietnam Oil and Gas Group on the contractor's proposal;

b) Additional agreement on modification of the oil and gas contract between the Vietnam Oil and Gas Group and the contractor;

c) Other relevant documents.

2. The order of appraisal and approval of modification of the oil and gas contract shall comply with Clauses 2, 3 and 4, Article 21 of this Decree.

3. Within 05 working days from the date of receiving the Prime Minister's written approval of modification of the oil and gas contract, the Ministry of Industry and Trade shall issue the modified investment registration certificate to the contractor and the Vietnam Oil and Gas Group, and at the same time send the original copies thereof to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Justice and the tax offices.

Article 24. Oil and gas production sharing contracts

1. An oil and gas product sharing contract must be made using the model contract provided in the Appendix to this Decree.

2. The Vietnam Oil and Gas Group and the contractor only negotiate the contents “depending on the 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 component stages.

2. At least 60 days before the end of each component stage or the oil and gas prospecting period, at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of extension of the oil and gas prospecting period. Such dossier consists of:

a) A written request for approval of extension of the oil and gas prospecting period, which clearly states the reasons therefor; the plan to conduct oil and gas activities in the extended period; additional work commitments and the respective financial commitments, and other proposals to be implemented during the extended period (if any);

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

3. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

4. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

5. Within 45 days from the date of 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 of extension of the oil and gas contract term

1. At least 01 year before the termination of the oil and gas contract, at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of extension of the oil and gas contract term. Such dossier consists of:

a) A written request for approval of extension of the oil and gas contract term, which clearly states the reasons therefor; the plan to conduct oil and gas activities in the extended period; minimum work commitments and minimum financial commitments during the extended period (if any);

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall issue a written approval of the 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 the oil and gas contract term in special cases

1. At least 60 days before the end of the oil and gas prospecting period or 01 year before the termination of the oil and gas contract, at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of extension of the oil and gas prospecting period or the oil and gas contract term in special cases for appraisal. Such dossier consists of:

a) A written request for approval of extension of the oil and gas prospecting period or the oil and gas contract term, which clearly states the reasons therefor and the satisfaction of the conditions specified in Clause 4, Article 31 of the Law on Oil and Gas; the plan to conduct oil and gas activities in the extended period; additional work commitments and the respective financial commitments, and other proposals to be implemented during the extended period (if any);

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of 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 oil and gas contract term in special cases and submit it to the Prime Minister for consideration and approval. Such dossier consists of:

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

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

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

1. Within 90 days from the date of announcing the commercial discovery, at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of retaining the discovered gas area for a period of no more than 5 years. Such dossier consists of:

a) A written request for approval of retaining the discovered gas area, which clearly states the reasons therefor and the satisfaction of the conditions specified in Clause 5, Article 31 of the Law on Oil and Gas; plan on gas discovery development; additional work commitments and respective financial commitments to be performed during the period of retaining the discovered gas area (if any);

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall issue a written approval of retaining the discovered gas area for a period of no more than 5 years.

5. At least 90 days before the end of the period of retaining the discovered gas area approved by the Ministry of Industry and Trade, if there is a request to continue to retain the gas discovered area for a period of no more than 02 years as specified in Clause 5, Article 31 of the Law on Oil and Gas, at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting the approval of extension of the period of retaining the discovered gas area for appraisal. Such dossier consists of:

a) A written request for approval of extension of the period of retaining the discovered gas area, which clearly states the reasons therefor and the satisfaction of the conditions specified in Clause 5, Article 31 of the Law on Oil and Gas; plan on gas discovery development; additional work commitments and respective financial commitments to be performed during the period of retaining the discovered gas area (if any);

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

6. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

7. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

8. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the request for extension of the period of retaining the discovered gas area, and submit it to Prime Minister for consideration obtain written. Such dossier consists of:

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

b) Dossiers as specified in Clause 5 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

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

1. In a force majeure case, the Vietnam Oil and Gas Group and the contractor may agree on suspending the exercise of a number of rights and performance of a number of obligations under the oil and gas contract.

2. Within 30 days from the date of reaching agreement with the contractor, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract in the force majeure case for consideration and approval. Such dossier consists of:

a) A written request for approval of suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract in the force majeure case;

b) The contractor's written proposal (if any);

c) Other relevant documents.

3. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

4. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

5. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall issue a written approval of suspension of the exercise of a number of rights and performance of a number of obligations under the oil and gas contract in the force majeure case.

Article 30. Dossiers, order and procedures for appraisal and approval of 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. Depending on the actual situation and reports of competent authorities in charge of national defense and security, in order to ensure the peace and socio-political stability as well as the national and ethnic interests, the Prime Minister may decide to suspend 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 as specified in Clause 7 Article 31 of the Law on Oil and Gas and assign the Vietnam Oil and Gas Group to notify the contractors.

2. Based on the negotiation with the contractor, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of 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 and security reasons for appraisal. Such dossier consists of:

a) A written report on results of the negotiation 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 and security reasons, which clearly states information about the oil and gas contract; assessment of the causes; proposed period of suspending 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 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

4. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

5. Within 45 days from the date of receiving a valid dossier, 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 and security reasons and submit it to the Prime Minister for consideration and approval. Such dossier consists of:

a) A written report to the Prime Minister on the appraisal results and request for approval of 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 and security reasons;

b) Dossiers as specified in Clause 2 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

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

1. 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 in accordance with Clause 3, Article 32 of the Law on Oil and Gas.

2. The contractor has the right to return the oil and gas contract area at any time during the oil and gas prospecting period. The voluntarily-returned area shall be released from the obligation to return areas in the relevant period. Voluntary return of the oil and gas contract area shall not reduce the obligations committed for the relevant period as well as such returned area.

3. The returned oil and gas contract area must be favorable for subsequent oil and gas activities.

4. On an annual basis, the Vietnam Oil and Gas Group shall summarize the return of oil and gas contract areas by contractors and report the summary to the Ministry of Industry and Trade for monitoring; propose an adjusted list of oil and gas blocks (if necessary) in accordance with Article 12 of this Decree.

5. In case there is a request for the retention of the whole area of the oil and gas contract or suspension of the performance of the obligation to return the oil and gas contract area, at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the retention of the whole area of the oil and gas contract or suspension of the performance of the obligation to return the oil and gas contract area for consideration and approval. Such dossier consists of:

a) A written request for approval of the retention of the whole area of the oil and gas contract or suspension of the performance of the obligation to return the oil and gas contract area, which clearly states the reasons therefor and the period of retention of the whole area of the oil and gas contract or suspension of the performance of the obligation to return the oil and gas contract area; the plan to deploy oil and gas activities during the retention period; additional work commitments and the respective financial commitments expected to be performed during the period of retention of the whole area of the oil and gas contract or suspension of the performance of the obligation to return the oil and gas contract area;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

6. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

7. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

8. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall issue a written approval of the retention of the whole area of the oil and gas contract or suspension 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 expansion of oil and gas contract areas, 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 and at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of expansion of the oil and gas contract area or consolidation of oil and gas discoveries and oil and gas fields for appraisal. Such dossier consists of:

a) A written request for approval of expansion of the oil and gas contract area or consolidation of oil and gas discoveries and oil and gas fields, which clearly states the reasons therefor and results of research and evaluation of the area proposed to be expanded or the plan on consolidation of oil and gas discoveries and oil and gas fields;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade , the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the request for expansion of the oil and gas contract area or consolidation of oil and gas discoveries and oil and gas fields, and submit it to the Prime Minister for consideration and approval. Such dossier consists of:

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

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

5. The in-principle agreement on consolidation of oil and gas discoveries and oil and gas fields will 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 will be submitted by the contractor together with the plan on early production of oil and gas fields and the plan on oil and gas field development.

Article 33. Dossiers, order and procedures for appraisal and approval of 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 contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the transfer of rights and obligations under the oil and gas contract for appraisal. Such dossier consists of:

a) A written request for approval of the transfer of rights and obligations under the oil and gas contract and issuance of a modified investment registration certificate, which clearly states the reasons therefor and the satisfaction of the requirements specified in Clause 1, Article 36 of the Law on Oil and Gas. gas;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) A certified true copy of the certificate of operation registration, the company's charter and financial statements of 03 immediately preceding years, if the institutional transferee; a certified true copy of the people’s identity card or citizen identity card or passport and documents proving the financial ability of the individual transferee;

d) The contract or agreement on transfer of rights and obligations under the oil and gas contract, which specifies the responsibility to perform the transferred tax obligations of related parties and other financial obligations as specified in the law of Vietnam;

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

e) Guarantee for fulfillment of contractual obligations of the transferee of participating interests under the oil and gas contract issued by a commercial bank or the transferee’s holding company or any other form of guarantee specified by the law upon request of the Vietnam Oil and Gas Group (if necessary, depending on the assessment of financial statements);

g) A tax declaration and explanation of transferred tax amount (if any) as specified by the tax law; a notice of the tax office on receipt of the tax declaration dossier, as specified by the tax law;

h) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission 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 relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the request for transfer of rights and obligations under the oil and gas contract and submit it to the Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding appraisal results and requesting his/her approval of the transfer of rights and obligations under the oil and gas contract;

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

5. Within 05 working days after of receiving the Prime Minister's approval on the transfer of rights and obligations under the oil and gas contract, the Ministry of Industry and Trade shall issue the modified investment registration certificate to the contractor and the Vietnam Oil and Gas Group, and at the same time send the original copies thereof to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Justice and the tax offices.

6. In case of changing the owner of the contractor holding the participating interests under the oil and gas contract, such contractor shall declare and pay taxes on behalf of the owner for the income related to the oil and gas contract in Vietnam (if any) or report it to the tax office in the case where it is not subject to taxes in accordance with the law of Vietnam. The tax declaration or report sent to the tax office and the tax office's notice of receipt of documents sent by the contractor are required documents to be attached to the report to the competent authority on the change of the owner. In the case where the transfer takes place outside of Vietnam, the dossier must contain the following information: The country/territory and time of completion of the transfer; whether the performance of tax obligations for the transfer includes the value of assets and participating interests under any oil and gas contract in Vietnam; if so, the basis and method of determining such value of assets and interests should be clearly stated. In the case where the holding company or the direct owner of the contractor has issued a letter of guarantee for the fulfillment of the previous oil and gas contract, the contractor must provide a letter of guarantee from the new owner, which must be approved by the Vietnam Oil and Gas Group.

7. In the case where the contractor conduct a merger, consolidation, slip-up, separation, renaming, change of the company’s nationality, or any other form that changes the contractor's basic information recorded in the investment registration certificate or the oil and gas contract, unless otherwise specified in Clause 6 of this Article, the contractor must carry out procedures for modifying the investment registration certificate and must declare and pay taxes if any taxable revenue is generated in accordance with the law of Vietnam and the treaties to which Vietnam is a contracting party.

8. Within 15 days from the date on which the contractor changes its address or legal representative, such contractor must send a written notice to the Ministry of Industry and Trade, the Vietnam Oil and Gas Group and relevant contractors under the oil and gas contract.

9. The contractors shall take accountability for the truthfulness and accuracy of the tax declarations and payments (if any) or the reports to the tax offices in the case where they are not subject to taxes as specified by the law; and shall be handled in accordance with the law regulations if they make untruthful declarations and reports.

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

1. Pursuant to Clauses 1 and 2, Article 39 of the Law on Oil and Gas, based on the conditions agreed upon between the contractor and the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of exercise of the right to participate in the oil and gas contract or the preemptive right to buy participating interests under a signed oil and gas contract in the case where the contractor intends to transfer his/her/its participating interests or taking over all interests of the contractor in the case where the latter decide to withdraw from the oil and gas contract due to special reasons for appraisal. Such dossier consists of:

a) A written request for approval of the exercise of the right to participate in, or preemptive right to buy participating interests, or taking over of participating interests under, the oil and gas contract and issuance of a modified investment registration certificate, including an investment opportunity assessment report;

b) A notice of the Vietnam Oil and Gas Group on the exercise of the right to participate in, or preemptive right to buy participating interests, or taking over of participating interests under, the oil and gas contract; the Prime Minister's written request to the Vietnam Oil and Gas Group for taking over all interests of the contractor in the case where the latter decide to withdraw from the oil and gas contract due to 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 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission for Management of State Capital at Enterprises, and other relevant ministries, sectors, and localities to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the request for exercise of the right to participate in, or preemptive right to buy participating interests, or taking over of participating interests under, the oil and gas contract of the Vietnam Oil and Gas Group, and submit it to the Prime Minister for consideration and approval. Such dossier consists of:

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

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

5. Within 05 working days from the date of receiving of the Prime Minister's written approval of the exercise of the right to participate in, or preemptive right to buy participating interests, or taking over of participating interests under, the oil and gas contract of the Vietnam Oil and Gas Group, the Ministry of Industry and Trade shall issue the modified investment registration certificate to the contractor and the Vietnam Oil and Gas Group, and at the same time send the original copies thereof to the Ministry of Finance, the Ministry of Planning and Investment, the Ministry of Justice and the tax offices.

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

1. Within 60 days from the effective date of an investment registration certificate, an operator shall submit 01 original dossier of registration for the establishment of an operating office to the provincial-level Department of Planning and Investment of the locality where the operating office is located. Such dossier consists of:

a) A written registration for the establishment of an operating office signed by an authorized representative of the operator;

b) A certified true copy of the investment registration certificate;

c) An appointment decision or employment contract of the head of the operator’s operating office;

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

2. Within 15 days from the date of receiving a valid dossier, the provincial-level Department of Planning and Investment shall issue an operation registration certificate of the operating office.

3. The operation term of the operating office shall comply with the validity of the investment registration certificate or the adjusted investment registration certificate, unless it is extended to fulfill obligations to the host country after the end of the oil and gas contract.

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

5. In case of changing the address or the head of an operating office or taking over an operating office due to the change of operator and other information on its granted operation registration certificate, within 15 days from the date of change, the operator shall carry out the procedures to adjust the information on the granted operation registration certificate according to the procedures specified at Clause 1 of this Article and notify the tax office of changes.

6. In case of terminating the operation of an operating office, the operator shall send 01 original dossier of request for termination of the operating office to the provincial-level Department of Planning and Investment of the locality where the operating office is located. Such dossier consists of:

a) Notification of termination of the operation of the operating office signed by an authorized representative of the operator;

b) The list of employees and their current corresponding benefits;

c) Seal and seal sample certificate (if any);

d) A certification issued by the tax office that the operating office has fulfilled its tax obligations and closed the tax identification number in the case where the oil and gas contract is terminated;

dd) The original of the registration certificate for establishment of the operating office.

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

8. The operating office shall be responsible for fulfilling its obligations under Vietnamese 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 or blocks when oil and gas contracts expire

1. In case where contractors performing an oil and gas contract propose to sign a new oil and gas contract when the existing contract expires as specified in Clause 2, Article 40 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall implement the process of contractor appointment in accordance with Article 21 of the Law on Oil and Gas and this Decree. The Vietnam Oil and Gas Group shall approve and issue the dossier of request for contractor appointment.

2. In the case where contractors performing an oil and gas contract propose to sign 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 approving the application of competitive offer to the above-mentioned contractors in accordance with this Decree.

3. In the case where contractors performing an oil and gas contract do not propose to sign a new oil and gas contract, at least 06 months before the existing oil and gas contract expires, the Vietnam Oil and Gas Group shall submit 02 dossiers to the Ministry of Industry and Trade (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the plan on subsequent handling of oil and gas fields, field clusters or blocks when oil and gas contracts expire for appraisal. Such dossier consists of:

a) A written request for approval of the plan on subsequent handling of oil and gas fields, field clusters or blocks when oil and gas contracts expire, in which it shall assess the condition of oil and gas fields, field clusters or blocks; and estimate remaining oil and gas resources and reserves;

b) The proposed implementation plan when the oil and gas contract expires according to one of the following options: Stopping production activities at the oil and gas fields, field clusters or blocks; or continuing to conduct production activities at the oil and gas fields, field clusters or blocks under a new oil and gas contract with suitable economic and technical conditions; or assigning the Vietnam Oil and Gas Group to conduct enhanced oil recovery at the oil and gas fields, field clusters or blocks;

c) Draft financial mechanism to operate oil and gas activities in the period from the time of taking over oil and gas fields, field clusters or blocks until the new oil and gas contract is signed;

d) Other relevant documents.

4. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of National Defense, the Ministry of Foreign Affairs, the Ministry of Public Security, the Commission for Management of State Capital at Enterprises and relevant ministries and sectors to collect their opinions thereon.

5. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

6. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the plan on subsequent handling of oil and gas fields, field clusters or blocks when the oil and gas contract expires and submit it to the Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding appraisal results and requesting his/her approval of the plan on subsequent handling of oil and gas fields, field clusters or blocks when the oil and gas contract expires;

b) Dossier as specified in Clause 3 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

7. Pursuant to the Prime Minister's decision approving the plan on subsequent handling of oil and gas fields, field clusters or blocks when the oil and gas contract expires:

a) In case of stopping production activities at the oil and gas fields, field clusters or blocks, 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 conduct production activities at the oil and gas fields, field clusters or blocks, the Vietnam Oil and Gas Group shall take over the oil and gas fields, field clusters or blocks in status quo from the contractor and operate oil and gas activities under the financial mechanism stated in Article 37 of this Decree until a new oil and gas contract is signed but for at most 2 years; select and appoint a unit to operate oil and gas activities during this period (if necessary). After 2 years from the time of taking over the oil and gas field, field cluster or blocks, if there is no contractor expressing interest or when it is unable to select a contractor to sign a 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 of the plan on subsequent handling of the oil and gas fields, field clusters or blocks according to one of the two options specified in Clause 3, Article 41 of the Law on Oil and Gas. Dossiers, order and procedures for appraisal and approval of the plan on subsequent handling of the oil and gas fields, field clusters or blocks shall comply with Clauses 3, 4, 5 and 6 of this Article;

c) In case of conducting enhanced oil recovery at the oil and gas fields, field clusters or blocks, the Vietnam Oil and Gas Group shall conduct oil and gas activities in accordance with Chapter VIII of this Decree.

Article 37. Financial mechanism to operate oil and gas activities in the period from the time of taking over oil and gas fields, field clusters or blocks until the new oil and gas contract is signed

The financial mechanism to operate oil and gas activities in the period from the time of taking over oil and gas fields, field clusters or blocks until the new oil and gas contract is signed as specified in 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 and costs of conducting oil and gas activities (including the allocations to a fund for securing the performance of the obligation of decommissioning oil and gas structures) shall be remitted to the state budget on the principle of ensuring the efficiency and strictly controlling costs of oil and gas activities. Costs of oil and gas activities therein are deductible expenses when determining income subject to corporate income tax in accordance with the law on corporate income tax, the law on oil and gas, other relevant legal documents and international treaties to which Vietnam is a contracting party. The financial mechanism to operate oil and gas activities pending the signing of a new oil and gas contract shall include the following main contents:

1. Oil and gas sales from oil and gas activities and other revenues (if any) are used for the following purposes:

a) Paying and refunding all reasonable and valid expenses made during the implementation of oil and gas activities according to the approved operation program and budget;

b) Advancing estimated expenses to be incurred for the next period according to the approved operation program and budget;

c) Covering expenses for making additional investments in order to increase reserves and maintain oil and gas exploitation output; value of allocation of funds for securing the performance of the obligation of decommissioning oil and gas structures for additional investment works (if any).

2. Making annual payment to the state budget for the following amounts:

a) The entire revenues after being used for the purposes specified in Clause 1 of this Article;

b) The remaining budget balance (if any) in the case where the final implementation cost is less than the approved actual budget;

c) Interests arising (if any) on the balance of allowances allowed to be left at the end of the fiscal year;

d) Remaining value (if any) of the funds for securing the performance of the obligation of decommissioning oil and gas structures after completing the decommission, determined on the basis of audit results as prescribed;

dd) The difference (if any) between revenues from the liquidation of assets that are no longer needed for oil and gas activities; equipment, vehicles, materials and waste collected during the decommission of oil and gas structures; reasonable and valid actual expenses in each case.

3. Responsibilities of the Vietnam Oil and Gas Group

a) Formulating and approving the annual operation program and budget;

b) Formulating and approving the process of selecting contractors to provide services and purchase goods in enhanced oil recovery at the oil and gas fields, field clusters or blocks in accordance with the Law on Oil and Gas and the principles applicable to oil and gas contracts;

c) On a quarterly basis, reporting to the Ministry of Industry and Trade on the implementation of oil and gas activities;

d) Proposing the plan on subsequent handling in accordance with Clause 3, Article 41 of Law on Oil and Gas.

Article 38. Mechanism for asset management, accounting and use and receipt of all participating interests from contractors in special cases

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

2. The value of state assets received and managed by the Vietnam Oil and Gas Group as specified in Clause 1 of this Article is the value paid by the Vietnam Oil and Gas Group on behalf of the State to the contractor from the state budget under the agreement signed between the Vietnam Oil and Gas Group and the contractor.

3. The Vietnam Oil and Gas Group shall organize management and make separate reports to monitor the participating interests received from the contractor and information, data, documents, samples, oil and gas structures and other assets (if any) specified in Clause 1 of this Article and specified in the Prime Minister's Decision assigning the Vietnam Oil and Gas Group to receive all participating interests from the contractor in special cases, not included in the state capital invested in enterprises and the financial statements of the Vietnam Oil and Gas Group.

4. On an annual basis, the Vietnam Oil and Gas Group shall build the plan on costs for management and monitoring of assets and costs for arising issues related to maintaining the oil and gas contract, which are handled in accordance with Point d, Clause 4, Article 64 of the Law on Oil and Gas and the 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 Management of State Capital at Enterprises in, guiding and supervising the management of assets specified in Clause 1 of this Article of the Vietnam Oil and Gas Group.

Chapter V

SAFETY IN OIL AND GAS ACTIVITIES

Article 39. Documents on safety management

1. When conducting oil and gas activities, a contractor shall be responsible for developing safety management documents as specified at 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. The safety management program shall include the following main contents:

a) Safety policies and objectives;

b) Organization of safety work and assignment of responsibility for safety work;

c) Safety training program; requirements on capacity, qualifications and experience of employees;

d) A list of legal documents, national technical regulations, national standards, safety regulations, international treaties to which Vietnam is a contracting party or other standards in line with international oil and gas industry practices;

dd) Assessment of legal compliance, including requirements to comply with regulations on permits, certificates of quality, technical safety and environmental protection;

e) Safety management of service contractors, organizations and individuals.

3. The risk assessment report shall include the following main contents:

a) Purpose and objectives of the risk assessment;

b) Description of oil and gas activities and works;

c) Identification, analysis, qualitative and quantitative risk assessment;

d) Measures to reduce risks.

4. The emergency response plan must be based on the results of the risk assessment report, including the following main contents:

a) Description and classification of possible emergency situations;

b) Organization chart, responsibility assignment, individual responsibilities, and reporting system when incidents, accidents or dangerous situations appear;

c) Procedures for responding to situations;

d) Description of internal and external resources available or to be mobilized for effective response to emergency situations;

dd) Contact address and information in emergency response with internal departments and reporting to relevant authorities;

e) Emergency response training and drills;

g) The plan to restore the operation of oil and gas structures, including the investigation and assessment of causes and consequences in order to re-establish and improve the safety of structures;

h) The emergency response plan must be compatible with the emergency response system of the National Committee for Incident and Disaster Response, Search and Rescue, the locality and the Vietnam Oil and Gas Group (for units under the Vietnam Oil and Gas Group, oil and gas joint ventures and contractors);

i) Organizations and individuals engaged in oil and gas activities may cooperate to develop a joint emergency response plan.

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

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

1. Before conducting oil and gas prospecting, building or converting oil and gas structures, decommissioning oil and gas structures at the end of oil and gas activities, on the basis of documents on safety management specified in Article 39 of this Decree that are made by the contractor and approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 01 original dossier for approval of safety management documents. Such dossier consists of:

a) A submittal requesting approval of safety management documents;

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

c) The Vietnam Oil and Gas Group’s assessment on the contractor's proposal; the contractor's written receipt and explanation (if any);

d) Other relevant documents.

2. Contents of appraisal of safety management documents include:

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

b) Assessment of conformity and accuracy of contents included in the documents;

c) Actual inspection at oil and gas structures (if necessary).

3. The safety management documents shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue a decision to establish such appraisal council (composed of representatives of relevant ministries, sectors and organizations).

4. Within 30 days from the date of receiving a valid dossier, the appraisal council shall complete the appraisal of the safety management documents and submit them to the Minister of Industry and Trade for consideration and approval.

5. Within 05 working days from the date of receiving the appraisal council's written appraisal, the Minister of Industry and Trade shall issue a decision approving the safety management documents.

Article 41. Safety management system

1. A contractor must establish, maintain and update a safety management system to ensure the safety of all oil and gas activities from the beginning of the oil and gas prospecting period to the end of the oil and gas structure decommission period.

2. The main contents of a safety management system include:

a) Policies and objectives on safety and working environment, and programs and plans for the implementation of those objectives;

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

c) Procedures for operation, troubleshooting and maintenance of works, machines and equipment; regulations on management, examination, inspection, certification of quality, technical safety and environmental protection for works, machines, equipment and hazardous chemicals;

d) Safety regulations; safety signs for lines, machines, equipment, supplies, chemicals, jobs with strict safety requirements; management of document and report archive;

dd) System of organization of safety work: decentralization of responsibilities, task performance, reporting channels; requirements on professional skills and experience relevant to the job position;

e) Assessment of the performance of the safety management program and solutions to complete and improve the quality of safety management. The contractor's ability to manage safety, health and environment must be controlled to ensure the compliance with the safety management system of organizations and individuals;

g) Any changes in organization, technique, technology and other requirements that affect the level of risks must be updated, evaluated and controlled by organizations and individuals in order to ensure that the safety management system is operated continuously and consistently.

Article 42. Safety-related risk management

1. A contractor must ensure that all risks must be identified, analyzed and assessed for all oil and gas structures, machines, equipment, chemicals and hazardous materials. The risk assessment results are used as input data for the organization of emergency response.

2. The risk management includes:

a) Qualitative and quantitative risk assessment for the stages of oil and gas activities as a basis for implementing measures to control and minimize risks and prove that risks are within acceptable levels in accordance with national technical regulations;

b) The risk assessment report must be updated every 5 years or when there is a major conversion or change in operation technology and organization, in order to create a basis for making safety-related decisions in oil and gas activities;

c) The contractor must identify specific locations and conditions with high risks that need to be considered in terms of safety when conducting operations in order to take mitigation measures.

Article 43. Emergency response

1. A contractor must establish and maintain an emergency response system to effectively conduct rescue operations upon occurrence of incidents or accidents causing harms to humans, the environment or property. Depending on the severity of the incidents or accidents, the contractor must notify the competent authority according to regulations.

2. Emergency response training and drills at oil and gas structures must be conducted regularly to ensure that employees understand and master the procedures for responding to specific emergency situations. Based on the risk assessment results to determine the form and frequency of training. The results of training and drills must be evaluated and recorded to complete the emergency response plan.

3. Persons present at oil and gas structures for the first time must be guided in detail on the organization of emergency response, safety equipment and escape routes.

Article 44. Safety in design, manufacture, construction and operation of oil and gas structures

1. Oil and gas structures must be designed, manufactured and constructed according to national technical regulations and standards or international standards, regional standards and foreign standards that are widely accepted and applied in accordance with Vietnamese laws and international treaties to which Vietnam is a contracting party, ensuring the following requirements:

a) Ensuring technology safety;

b) Ensuring construction safety;

c) Ensuring safety on fire and explosion prevention;

d) Meeting requirements on safe zones and corridors;

dd) Complying with regulations on environmental protection;

e) Being able to withstand the expected loads during operation and in the event of a fault;

g) Not causing a chain reaction from a single incident.

2. The design, manufacture, construction, trial operation and acceptance test of oil and gas structures must be inspected and certified by competent authorities in accordance with the law to ensure the conformity with technical regulations and announced applicable standards, and the compliance with Vietnamese laws and international treaties to which Vietnam is a contracting party.

3. Before the trial operation, the contractor must conduct the inspection, verification and testing for each work item and must ensure that the emergency response plan and fire prevention and fighting work are ready to be implemented according to regulations. During the trial operation, organizations and individuals must apply enhanced measures to be ready to respond promptly and effectively to possible incidents and accidents.

4. Oil and gas structures shall only be put into operation after the results of inspection, verification and testing and safety contents satisfy the set requirements.

5. Oil and gas structures must be operated, maintained, inspected and repaired in accordance with regulations, approved processes, technical regulations and applicable standards. The contractor must immediately stop activities if such activities may cause danger to humans, the environment and oil and gas structures beyond his/her/its control.

Chapter VI

ORDER AND PROCEDURES FOR APPROVAL OF CONDUCTING OIL AND GAS ACTIVITIES

Article 45. Dossiers, 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 request of a contractor approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit 02 dossiers to the Ministry of Industry and Trade (including 01 original dossiers and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of implementation of an oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment. Such dossier consists of:

a) A written request for approval of implementation of the oil and gas field development project with comprehensive chains of onshore and offshore structures and equipment, clearly stating the reasons and evaluating and comparing the economic efficiency of such project with other options;

b) Draft adjustments of the oil and gas contract for implementation of the oil and gas field development project with comprehensive chains of onshore and offshore structures and equipment;

c) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

d) Proposal of the need to change the use purpose of forests and land (if any), enclosed with an explanatory report, a map of the current status of forests and land, and other documents and dossiers as required by the law on forestry; land and relevant laws;

dd) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send a dossier 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 Management of State Capital at Enterprises (in the case where the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor) and relevant ministries, sectors and localities to collect their opinions.

3. Within 15 days from the date of receiving a dossier for collect opinions from the Ministry of Industry and Trade, ministries, sectors and localities must give their opinions in writing on the contents under their state management and send them to the Ministry of Industry and Trade, in which the Ministry of Natural Resources and Environment and the Ministry of Agriculture and Rural Development shall give opinions on the change of forest and land use purposes (if any) in accordance with the law on forestry and land and other relevant laws.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall appraise the proposal for implementation of the oil and gas field development project with comprehensive chains of onshore and offshore oil and gas structures and equipment, and submit them to the Prime Minister for consideration and approval of the policy. Such dossier consists of:

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

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

5. With regard to the change of forest and land use purposes (if any) of the oil and gas field development project with comprehensive chains of onshore and offshore structures and equipment, the dossiers, order, procedures for appraisal and approval of the policy are carried out in accordance with the law on forestry and land. In the case where the approval of the policy on change of forest and land use purposes (if any) falls under the competence of the National Assembly, the dossier shall comprise:

a) The Government's submittal to the Prime Minister to the National Assembly requesting approval of the policy on change of forest and land use purposes of the oil and gas field development project with comprehensive chains of onshore and offshore structures and equipment;

b) Dossiers and documents as prescribed by the law on forestry and land;

c) Other relevant documents and documents.

6. After the policy on change of forest and land use purposes and the outline plan for oil and gas field development is approved, the dossiers, order and procedures for deciding on the recovery and change of forest and land use purposes by the provincial-level People's Committee to implement 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 and relevant laws.

7. During the recovery and change of forest and land use purposes for implementation of the oil and gas field development project, the Vietnam Oil and Gas Group and the contractor are allowed to conduct surveys and measurements to collect data in service of planning oil and gas field development.

Article 46. Dossiers, order and procedures for appraisal and approval of policies on change of forest and land use purposes of onshore oil and gas field development projects

1. In the case where an onshore oil and gas field development project requires the change of forest or land use purposes as specified in Clause 2, Article 42 of the Law on Oil and Gas, on the basis of the contractor's proposal, the Vietnam Oil and Gas Group shall submit to competent agencies for appraisal and approval of the policy on changing forest and land use purposes in accordance with the law on forestry and land.

2. In the case where the approval of the policy on change of forest and land use purposes falls under the competence of the National Assembly as specified at Point a, Clause 2, Article 42 of the Law on Oil and Gas, the Government's dossier shall be submitted to the National Assembly for approval of the policy on change of forest and land use purposes in accordance with Clause 5, Article 45 of this Decree.

3. The order of appraisal and approval of the policy on change of forest and land use purposes of the onshore oil and gas field development project shall comply with the laws on forestry, land and other relevant laws.

4. After the policy on change of forest and land use purposes and the outline plan for oil and gas field development are approved, the dossier and process for deciding on the recovery and change of forest and land use purposes shall be made by the provincial-level People's Committees to implement the onshore oil and gas field development project in accordance with the law on forestry, land 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 from the date of completing the oil and gas appraisal, based on the report on oil and gas resources and reserves made by the contractor and approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group Nam shall submit 02 dossiers to the Ministry of Industry and Trade (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting for approval of the report on oil and gas resources and reserves. Such dossier consists of:

a) A submittal requesting approval of the report on oil and gas resources and reserves for appraised oil and gas discovery;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) A report on oil and gas resources and reserves including the main contents specified in Article 45 of the Law on Oil and Gas;

d) A summary report on oil and gas resources and reserves;

dd) 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 a decision to establish such appraisal council (composed of representatives of relevant ministries, sectors and organizations) as well as the operational regulations for the appraisal council and its teams of specialist assistants.

3. During the appraisal, if necessary, the Ministry of Industry and Trade may request the Vietnam Oil and Gas Group to select a qualified consultation organization to verify the report on oil and gas resources and reserves. Funding for hiring verification consultants is allocated from the cost 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 verification consultation organization must be legally and financially independent from the contractor. The verification period shall not exceed 90 days.

4. Within 45 days from the date of receiving a valid dossier (including verification reports from consultation organizations, if required), the appraisal council shall complete the appraisal of the report on oil and gas resources and reserves, and submit it to the Minister of Industry and Trade for consideration and approval.

5. Within 05 working days from the date of receiving the appraised documents from the appraisal council, the Minister of Industry and Trade shall issue a decision to approve the report on oil and gas resources and reserves.

6. Dossiers, order and procedures for appraisal and approval of an updated report on oil and gas resources and reserves specified in Clause 5, Article 45 of the Petroleum Law shall comply with the provisions of this Article.

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

Article 48. Dossiers, order and procedures for appraisal and approval of the outline plan for oil and gas field development, adjustment of the outline plan for oil and gas field development

1. Within 12 months from the date on which a report on oil and gas resources and reserves is approved, based on the outline plan for oil and gas field development made by the contractor and approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit 02 dossiers to the Ministry of Industry and Trade (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the outline plan for oil and gas field development. Such dossier consists of:

a) A submittal requesting approval of the outline plan for oil and gas field development;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) The outline plan for oil and gas field development, including the main contents specified in Article 46 of the Law on Oil and Gas. In case of gas field development, the preliminary gas consumption plan shall contain preliminary information on gas consumers, expected gas sale period and other necessary conditions of the gas consumption plan;

d) A summary of the outline plan for oil and gas field development;

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

d) The agreement on principles of joint development of oil and gas fields (if any);

g) Other relevant 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 a decision to establish such appraisal council (composed of representatives of relevant ministries, sectors and organizations) as well as the operational regulations for the appraisal council and its teams of specialist assistants.

3. In the case where the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor, in addition to appraising the outline plan for oil and gas field development in the form of an appraisal council, the Ministry of Industry and Trade shall collect written opinions from 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 from the date of receiving a valid dossier, the appraisal council shall complete the appraisal of the outline plan for oil and gas field development and submit it to the Minister of Industry and Trade for consideration and approval.

5. Within 05 working days from the date of receiving the appraised documents from the appraisal council, the Minister of Industry and Trade shall issue a decision to approve the outline plan for oil and gas field development.

6. Dossiers, order and procedures for appraisal and approval for adjustment of the outline plan for oil and gas field development for the cases falling under the approving competence of the Ministry of Industry and Trade specified in Clause 5, Article 46 of the Law on Oil and Gas shall comply with the provisions of this Article.

7. Dossiers, order and procedures for appraisal and approval for adjustment of the outline plan for oil and gas field development for the cases falling under the approving competence of the Vietnam Oil and Gas Group specified in Clause 5 Article 46 of the Law on Oil and Gas shall comply with the process promulgated by the Vietnam Oil and Gas Group.

Article 49. Dossiers, order and procedures for appraisal and approval of the plan on early production of oil and gas fields, adjustment of the plan on early production of oil and gas fields

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

a) The reasonable exploitation plan according to international oil and gas industry practices cannot be determined on the basis of available information, but it is necessary to collect additional data on the basis of monitoring the actual exploitation of fields, product floors and seams;

b) Ratio of P1/2P resources (on-site oil and gas) is not lower than 40%; if this ratio is lower than 40%, it must be approved by the Ministry of Industry and Trade.

2. Within 18 months from the date on which the outline plan for oil and gas field development is approved, based on the plan on early production of an oil and gas field submitted by the contractor and approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit 02 dossiers to the Ministry of Industry and Trade (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval for the plan on early production of the oil and gas field. Such dossier consists of:

a) A written request for approval of the plan on early production of the oil and gas field;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) The plan on early production of the oil and gas field, including the main contents specified in Article 47 of the Law on Oil and Gas;

d) A summary of the 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 among related parties (if any) on the basis of the approved in-principle agreement on consolidation of oil and gas discoveries and oil and gas fields as specified in Article 48 of this Decree;

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

g) Other relevant documents.

3. The plan on early production of the oil and gas field shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue a decision to establish such appraisal council (composed of representatives of relevant ministries, sectors and organizations) as well as the operational regulations for the appraisal council and its teams of specialist assistants.

4. In the case where the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor, in addition to appraising the outline plan for oil and gas field development in the form of an appraisal council, the Ministry of Industry and Trade shall collect written opinions from 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, if necessary, the Ministry of Industry and Trade may request the Vietnam Oil and Gas Group to select a qualified consultation organization to verify the plan on early production of the oil and gas field. Funding for hiring verification consultants is allocated from the cost 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 verification consultation organization must be legally and financially independent from the contractor. The verification period shall not exceed 90 days.

6. Within 45 days from the date of receiving a valid dossier (including verification reports from consultation organizations, if required), the appraisal council shall complete the appraisal of the plan on early production of the oil and gas field, and submit it to the Minister of Industry and Trade for consideration and approval.

7. Within 05 working days from the date of receiving the appraised documents from the appraisal council, the Minister of Industry and Trade shall issue a decision to approve the plan on early production of the oil and gas field.

8. Dossiers, order and procedures for appraisal and approval for adjustment of the plan on early production of the oil and gas field for the cases falling under the approving competence of the Ministry of Industry and Trade specified in Clause 6, Article 47 of the Law on Oil and Gas shall comply with the provisions of this Article.

9. Dossiers, order and procedures for appraisal and approval for adjustment of the plan on early production of the oil and gas field for the cases falling under the approving competence of the Vietnam Oil and Gas Group specified in Clause 5 Article 47 of the Law on Oil and Gas shall be determined on the total accumulated investment in the nearest approval of the plan on early production of the oil and gas field and comply with the process promulgated by the Vietnam Oil and Gas Group.

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

1. Within 18 months from the date on which the outline plan for oil and gas field development is approved or within 6 months before the end of the plan on early production of the oil and gas field, on the basis of the plan on oil and gas field development prepared by the contractor and approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the plan on oil and gas field development. Such dossier consists of:

a) A submittal requesting approval of the plan on oil and gas field development;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) The plan on oil and gas field development, which contains the main contents as specified in Article 48 of the Law on Oil and Gas.

d) A brief description of the plan on oil and gas field development;

dd) Agreement on agreement on consolidation of oil and gas discoveries and oil and gas fields of related parties (if any) based on the in-principle agreement on consolidation of oil and gas discoveries and oil and gas fields approved in accordance with Article 48 of this Decree;

e) Agreement on oil and gas field joint development (if any) based on the in-principle agreement on oil and gas field joint development approved in accordance with Article 48 of this Decree;

g) Other relevant documents.

2. The plan on oil and gas field development shall be appraised by an appraisal council. The Minister of Industry and Trade shall issue a decision to establish such an appraisal council (composed of representatives of relevant ministries, sectors, and organizations) as well as the operational regulations for the appraisal council and its teams of specialist assistants.

3. In the case where the Vietnam Oil and Gas Group participates in the oil and gas contract as a contractor, in addition to appraising the plan on oil and gas field development by an appraisal council, the Ministry of Industry and Trade may collect written opinions from 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, if necessary, the Ministry of Industry and Trade may request the Vietnam Oil and Gas Group to select a qualified consultation organization to verify the plan on oil and gas field development. Funds for hiring the consultation organization to conduct the verification shall be covered by 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 consultation organization conducting the verification shall be legally and financially independent from the contractor. The verification period shall not exceed 90 days.

5. Within 45 days from the date of receiving a valid dossier (including the report on verification of the consultation organization, if required), the appraisal council shall complete the appraisal of the plan on oil and gas field development and submit it to the Minister of Industry and Trade for consideration and approval.

6. Within 05 working days from the date of receiving the appraised documents from the appraisal council, the Minister of Industry and Trade shall issue a decision to approve the plan on oil and gas development.

7. Dossiers, order and procedures for appraisal and approval of modification of the plan on oil and gas field development in the cases that require the approval of the Ministry of Industry and Trade as specified in Clause 6, Article 48 of the Law on Oil and Gas shall comply with this Article.

8. Dossiers, order and procedures for appraisal and approval of modification of the plan on oil and gas field development in the cases that require the approval 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 investment accumulated in the latest approval of a plan oil and gas field development and follow 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 the oil and gas structures and modification of plans on decommissioning of the oil and gas structures

1. Within 01 year from the date of production of the first flow of commercial oil and gas from the oil and gas contract area, on the basis of the plan on decommissioning of oil and gas structures prepared by the contractor and approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the plan on decommissioning of oil and gas structures. Such dossier consists of:

a) A submittal requesting approval of the plan on decommissioning of oil and gas structures;

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) The plan on decommissioning of oil and gas structures, which contains the main contents as specified in Article 50 of the Law on Oil and Gas.

d) A brief description of the 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 a decision to establish such an appraisal council (composed of representatives of relevant ministries, sectors, and organizations) as well as the operational regulations for the appraisal council and its teams of specialist assistants.

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

4. Within 05 working days from the date of receiving the appraised documents from the appraisal council, the Minister of Industry and Trade shall issue a decision to approve the plan on decommissioning of oil and gas structures.

5. Dossiers, order and procedures for appraisal and approval of modification of the plan on decommissioning of oil and gas structures in the cases that require the approval of the Ministry of Industry and Trade as specified in Clause 8, Article 50 of the Law on Oil and Gas shall comply with this Article.

6. Dossiers, order and procedures for appraisal and approval of modification of the plan on decommissioning of oil and gas structures in the cases that require the approval of the of the Vietnam Oil and Gas Group and Trade as specified in Clause 6, Article 50 of the Law on Oil and Gas shall comply with this Article.

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

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

2. The amount to be set aside as a fund for securing the performance of the obligation of decommissioning of oil and gas structures shall be calculated using the following formula:

Where:

E_n: Amount to be set aside as the fund in year n, unit: USD;

A_n: Oil and gas production output in year n, equal to the actual oil and gas production output in such year, unit: barrel of oil equivalent;

B_n: Total cost for decommissioning of oil and gas structures updated in year n, B_n = (b₁ - b₂), where:

b₁: Total cost for decommissioning of oil and gas structures estimated in the plan on decommissioning of oil and gas structures (most recently approved), unit: USD;

b₂: Cost estimate calculated in the plan on decommissioning of oil and gas structures (most recently approved) corresponding to the items of equipment, properties or structures that have been decommissioned up to year (n-1), unit: USD;

C_(n-1): Balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures as of December 31 of year (n-1), equal to the total balance of all accounts to which the Vietnam Oil and Gas Group deposits the funds for the respective oil and gas fields, certified in writing by the relevant credit institutions, unit: USD;

I_(n-1): Interests on bank deposits that organizations and individuals receive after the Vietnam Oil and Gas Group perform its obligations to the State budget (if any) for year n-1;

D_n: Remaining recoverable oil and gas reserves, D_n = d₁-d₂, where:

d₁: Recoverable oil and gas reserves that are determined in the plan on oil and gas field development or the plan on early production of oil and gas fields approved by the competent authorities by the end of year n, unit: barrel of oil equivalent;

d₂: Total cumulative oil and gas production output of the relevant oil and gas field(s) as of year (n-1), unit: barrel of oil equivalent.

3. Before terminating the oil and gas field production or prematurely terminating the oil and gas contract, the contractor shall set aside a sufficient fund for securing the performance of the obligation of decommissioning of oil and gas structures under the final plan on decommissioning of oil and gas structures approved by the competent authority.

4. Within 01 year before the termination of the oil and gas contract or the expiration of the oil and gas production period under the approved plan on oil and gas field development or modified plan on oil and gas field development, the contractor shall update the plan on decommissioning of oil and gas structures, and submit it to the competent authority for approval as specified in Article 51 of this Decree.

5. In the case where the balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures is lower than the cost estimate under the approved final plan on decommissioning of oil and gas structures, within 06 months before the termination of the oil and gas contract or the expiration of the oil and gas production period, each contractor shall make an additional contribution to the fund according to the proportion of participating interests under the oil and gas contract. In case of necessity, the Vietnam Oil and Gas Group shall request the contractors to open bank guarantees to ensure their performance of the obligation of decommissioning of oil and gas structures with the guarantee amount equivalent to the deficiency.

6. In the case where the balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures is greater than the cost estimate under the approved final plan on decommissioning of oil and gas structures, the difference will be settled upon account-finalization as specified in Article 54 of this Decree or returned to the contractor when the Vietnam Oil and Gas Group receives the right to use the fund for securing the performance of the obligation of decommissioning of oil and gas structures (in the case where the contractor is allowed to retain part or the whole of the oil and gas structures) provided that the contractor shall perform the financial obligations to the host country in accordance with the oil and gas contract and relevant laws. The difference returned to the contractor will be settled according to the principles specified in Clause 5, Article 54 of this Decree.

7. If otherwise agreed in the signed oil and gas contract on measures to secure the obligation of decommissioning of oil and gas structures other than those specified in this Decree, the contractor shall comply with such agreement in the oil and gas contract.

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 oil and gas structures. Contractors may use the funds to perform their obligations for decommissioning oil and gas structures under approved plans on decommissioning of oil and gas structures.

2. In case the contractor is unable to decommission the oil and gas structures under the approved plan on decommissioning of the oil and gas structures because the Vietnam Oil and Gas Group cannot fully refund the value of the fund for securing the performance of the obligation of decommissioning of oil and gas structures that has been set aside, the contractor is released from the obligation for decommissioning of the oil and gas structures commensurate with the nonrefundable proportion and the Vietnam Oil and Gas Group shall be responsible for decommissioning such oil and gas structures.

3. In the case where the contractor shall not decommission, or decommission only 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 commensurate with the whole or part of the retained oil and gas structures shall be maintained by the Vietnam Oil and Gas Group and used directly for decommissioning when such oil and gas structures are no longer needed for oil and gas activities or cannot continue to operate safely. In this case, the Vietnam Oil and Gas Group shall coordinate with the contractor to determine the value of the fund for securing the performance of the obligation of decommissioning of oil and gas structures at the time of receiving the right to use the fund and the contractor shall be responsible for making up for the deficiency in value thereof, which is calculated according to the process specified in Article 52 of this Decree. After the contractor makes up the deficiency in value of the fund for securing the performance of the obligation of decommissioning of oil and gas structures and hands over the right to use the fund to the Vietnam Oil and Gas Group, the contractor is released from all obligations to the whole or part of the oil and gas structures that have not been decommissioned, and at the same time are released from the obligation for making up other deficiency that may be incurred during the actual decommissioning of the oil and gas structures (if any).

4. On an annual basis, the Vietnam Oil and Gas Group shall audit and confirm the amount set aside as the fund for securing the performance of the obligation of decommissioning of oil and gas structures, the disbursement from the fund, and the costs actually incurred by the contractor.

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

1. Within 9 months from the date of completing the decommissioning of the whole or part of the oil and gas structures in the oil and gas contract area, the contractor shall make a report on completion thereof and submit it to the Vietnam Oil and Gas Group for approval and acceleration to the Ministry of Industry and Trade for monitoring.

2. Main contents of a report on completion of the decommissioning of oil and gas structures include:

a) Descriptions of the oil and gas structures and decommissioning activities actually performed;

b) The progress of the decommissioning;

c) Evaluation of changes between actual decommissioning activities and the approved plan (if any);

d) Actual costs of the decommissioning;

dd) Summary of the environmental protection and safety actually conducted, including: the plan on collection, transportation and treatment of wastes and scraps that has been implemented;

e) Commitment to responsibility for the structures left behind (if any).

3. The proceeds from disposition of scraps collected during and after the decommissioning of oil and gas structures shall be recorded and settled upon account-finalization of funds for securing the performance of the obligation of decommissioning of oil and gas structures as specified in Clauses 4 and 5 of this Article.

4. Within 30 days from the date on which the Vietnam Oil and Gas Group approves the report on completion of the decommissioning of the oil and gas structures, the contractor shall coordinate with the Vietnam Oil and Gas Group to conduct the account-finalization of costs of decommissioning of oil and gas structures (including the proceeds from the disposition of scraps as specified in Clause 3 of this Article).

5. In the case where the contractor decommissions the oil and gas structures at the end of the oil and gas contract term, after conducting the account-finalization and performing the financial obligations of the oil and gas contract, the balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures shall be treated as follows:

a) If the contractor has recovered in full the amount set aside as the fund for securing the performance of the obligation of decommissioning of oil and gas structures, the balance of the fund, after the financial obligations under the provisions of the oil and gas contract are performed, shall be divided between the contractor and the Vietnam Oil and Gas Group at the ratio of oil and gas divided as profits applicable to the highest production output that has been reached during the term of the oil and gas contract;

b) If the contractor has not yet recovered in full the amount set aside as the fund for securing the performance of the obligation of decommissioning of oil and gas structures, the remaining amount in the fund shall be first refunded to the contractor to offset such unrecovered amount. Then, the remaining balance of the fund for securing the performance of the obligation of decommissioning of oil and gas structures after this offset (if any) is made and the financial obligations as specified in the oil and gas contract are performed, shall be divided between the contractor and the Vietnam Oil and Gas Group at the ratio of oil and gas divided as profits applicable to the highest production output that has been reached during the term of the oil and gas contract.

6. In the case where the Vietnam Oil and Gas Group receives the fund for securing the performance of the obligation of decommissioning of oil and gas structures and directly performs the decommissioning of the oil and gas structures, after the account-finalization, the remaining balance shall be remitted into the state budget.

7. On an annual basis, the Vietnam Oil and Gas Group reports to the Ministry of Industry and Trade and the Ministry of Finance on the management, use and account-finalization of funds for securing the performance of the obligation of 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 and at the contractor's proposal approved by the Vietnam Oil and Gas Group, the Vietnam Oil and Gas Group shall submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of the retention, postponement of decommissioning, or decommissioning of part or the whole, of oil and gas structures. Such dossier consists of:

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

b) Assessment of the Vietnam Oil and Gas Group on the contractor's proposal; the contractor's written receipt and explanation (if any);

c) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to Ministry of Natural Resources and Environment, the Ministry of Transport, the Ministry of Planning and Investment, the Ministry of National Defense, and other relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

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

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

6. In the case where a competent authority requests the retention of part or the whole of oil and gas structures, the Ministry of Industry and Trade shall send a written notice to the Vietnam Oil and Gas Group and the contractor at least 06 months before conducting decommissioning activities according to the approved schedule.

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

Chapter VII

INCENTIVES IN OIL AND GAS ACTIVITIES

Article 56. Criteria for determining oil and gas blocks located in deep-water and offshore areas, areas with extremely difficult geographical conditions or complicated geological conditions; marginal oil and gas fields

1. Oil and gas blocks located in deep-water and offshore areas, areas with extremely difficult geographical conditions or complicated geological conditions are those that:

a) Have shallowest depth of 150 m or more;

b) Are located 150 km or more from the shore.

2. A marginal oil and gas field is the one with an intrinsic rate of return for the life of the project approaching 10% in USD and less than the average cost of capital.

Article 57. Dossiers, order and procedures for appraisal and approval of the list of oil and gas blocks and fields eligible for investment incentives and special investment incentives

1. Depending on the subjects eligible for incentives specified in Article 53 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall make the list of oil and gas blocks and fields eligible for investment incentives and special investment incentives and submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) for appraisal. Such dossier consists of:

a) A submittal requesting approval of the list of oil and gas blocks and fields eligible for investment incentives and special investment incentives.

b) Assessment of conformity to the criteria specified in Article 53 of the Law on oil and gas, enclosed with specific calculations for each oil and gas block and field in the respective lists (including assessment of economic efficiency of each project);

c) Other relevant documents.

2. Within 05 working days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of Natural Resources and Environment, the Ministry of Defense, the Ministry of Public Security, and other relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the dossier for comments from the Ministry of Industry and Trade, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the list of oil and gas blocks and fields eligible for investment incentives or special investment incentives, and submit it to the Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding the appraisal results and requesting his/her approval of the list of oil and gas blocks and fields eligible for investment incentives and special investment incentives.

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

5. On an annual basis, the Vietnam Oil and Gas Group shall review and assess the negotiation and signing of oil and gas contracts and implementation of oil and gas activities in oil and gas blocks and fields, and propose the modification of the list of oil and gas blocks and fields eligible for investment incentives and special investment incentives (if necessary), report it to the Ministry of Industry and Trade for appraisal and acceleration to the Prime Minister for approval in accordance with this Article.

Chapter VIII

ENHANCED RECOVERY OF OIL AND GAS AT THE OIL AND GAS FIELD, FIELD CLUSTER OR BLOCKS

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

1. The enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks shall be conducted according to the mechanisms for enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks promulgated by the Prime Minister as specified in Article 60 of this Decree, which shall be suitable to the characteristics of each oil and gas field, field cluster, and block.

2. Oil and gas activities for oil and gas fields, field clusters and blocks where the enhanced recovery of oil and gas is conducted shall ensure safety, thriftiness, efficiency, strict control of costs, and be based on the economic and technical norms approved or promulgated by the competent authorities, and comply with relevant laws.

3. The Vietnam Oil and Gas Group shall directly manage and operate the enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks; select and appoint operating units that have financial and technical capacity and experience in oil and gas activities to ensure the efficient enhanced oil and gas recovery.

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

Article 59. Main contents of the mechanisms for enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks

1. General information about oil and gas fields, field clusters and blocks where the enhanced recovery of oil and gas is conducted.

2. Principles of operating oil and gas activities for oil and gas fields, field clusters and blocks where the enhanced recovery of oil and gas is conducted, are specified in Article 58 of this Decree.

3. Revenues from selling oil and gas obtained from the enhanced recovery at oil and gas fields, field clusters and blocks, and other revenues (if any) shall be used for the following purposes:

a) Pay and refund all reasonable and valid expenses made during the implementation of oil and gas activities according to the approved operational program and budget;

b) Make advances to cover the estimated costs to be incurred for the next period in accordance with the approved operating program and budget; advances to cover the costs of purchasing supplies and using services for oil and gas activities during the time when the products cannot be sold and in the case where the revenues from selling oil and gas are not enough to cover reasonable and valid expenses for oil and gas activities or unforeseen occurrences or for decommissioning of oil and gas structures in case the fund for securing the obligation of decommissioning of oil and gas structures is not enough to cover the expenses for the decommissioning of oil and gas structures;

c) Cover expenses for making additional investments in order to maintain oil and gas production output; amount set aside as the fund for securing the obligation of decommissioning of oil and gas structures for additionally invested work items (if any).

4. The following amounts shall be remitted to the State budget:

a) All revenues remaining after being used for the purposes specified in Clause 3 of this Article;

b) Remaining balance of the budget (if any) in the case where the ending balance of the costs incurred is less than the approved actual budget;

c) Interests (if any) on the balance of the provisions to be retained at the end of the fiscal year;

d) Residual value of the fund for securing the performance of the obligation of decommissioning of oil and gas structures after the obligation of decommissioning of oil and gas structures (if any) is performed, which is determined on the basis of the audit results as specified;

dd) The difference (if any) between the proceeds from the disposition of assets that are no longer needed for oil and gas activities; equipment, vehicles, materials and scraps collected during the decommissioning of oil and gas structures; respective reasonable and valid expenses actually incurred in each case.

5. The enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks shall be terminated in any of the following cases:

a) The revenue is, as foretasted, not enough to cover the expenses;

b) The structures and equipment of the oil and gas fields, field clusters, and blocks are in unsafe conditions;

c) Force majeure cases leading to the inability to continue oil and gas production activities.

6. With respect to the enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks, the Vietnam Oil and Gas Group shall:

a) Organize the enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks in a safe and efficient manner;

b) Formulate and approve the annual operating program and budget;

c) Formulate and approve the process of selecting contractors to provide services and procure goods for the enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks in accordance with the Law on Oil and Gas and the principles applicable to oil and gas contracts;

d) Make quarterly reports to the Prime Minister on the situation of enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks, which include the assessment of profits or losses, sudden fluctuations of the enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks (if any) and follow-up solutions;

dd) Decide to terminate the enhanced recovery of oil and gas and decommissioning of oil and gas structures;

e) Carry out financial audits and stage-ending audits (if any); on the basis of the above-mentioned audit reports, approve the account-finalization report on the enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks; approve the account-finalization of costs of decommissioning of oil and gas structures;

g) Decommission the oil and gas structures in accordance with the Law on Oil and Gas and this Decree after the end of enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks.

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

1. Pursuant to Point c, Clause 2, Point b, Clause 3, Article 41 of the Law on Oil and Gas, the Vietnam Oil and Gas Group shall develop mechanisms for enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks suitable to the characteristics of each oil and gas field, field cluster, and block, and submit to the Ministry of Industry and Trade 02 dossiers (including 01 original dossier and 01 photocopy dossier, which shall be sent in person or by post) requesting approval of such mechanisms for enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks for appraisal. Such dossier consists of:

a) A submittal requesting approval of the mechanisms for enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks;

b) Draft mechanisms for enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks, which cover the main contents as specified in Article 59 of this Decree;

c) Other relevant documents.

2. Within 05 working days from the date of fully receiving a valid dossier, the Ministry of Industry and Trade shall send the dossier to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Justice, the Ministry of Natural Resources and Environment, the Commission for Management of State Capital at Enterprises, and other relevant ministries and sectors to collect their opinions thereon.

3. Within 15 days from the date of receiving the Ministry of Industry and Trade’s written request for opinions enclosed with the respective dossier, the ministries and sectors shall send their written opinions on the contents falling within their scope of State governance to the Ministry of Industry and Trade.

4. Within 45 days from the date of fully receiving a valid dossier, the Ministry of Industry and Trade shall complete the appraisal of the mechanisms for enhanced recovery of oil and gas at the oil and gas fields, field clusters or blocks and submit them to the Prime Minister for consideration and approval. Such dossier consists of:

a) A submittal to the Prime Minister regarding the appraisal results and requesting his/her approval of the mechanisms for enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks;

b) Dossiers as specified in Clause 1 of this Article;

c) A summary report on receipt and explanation of opinions from ministries and sectors, enclosed with photocopies of written opinions of the ministries and sectors.

Article 61. Mechanisms for management, accounting and use of assets taken over from contractors to conduct enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks

1. In order to conduct enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks, the Vietnam Oil and Gas Group shall receive information, data, documents, specimens, oil and gas structures and other assets that have been installed and invested in under the terminated oil and gas contract in accordance with the agreement signed with the contractor; may use such information, data, documents, specimens, oil and gas structures and other assets free of charge.

2. The Vietnam Oil and Gas Group shall organize the management and make separate reports to monitor the information, data, documents, specimens, oil and gas structures and other assets received in accordance with Clause 1 of this Article and update the added investment value, as specified in the Prime Minister's decision approving the mechanisms for enhanced recovery of oil and gas at oil and gas fields, field clusters and blocks, and shall not recorded in the state capital invested in enterprises and the financial statements of the Vietnam Oil and Gas Group.

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

Chapter IX
ACCOUNT-FINALIZATION OF COSTS OF OIL AND GAS ACTIVITIES UNDER OIL AND GAS CONTRACTS

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

1. The account-finalization of costs of oil and gas activities under oil and gas contracts shall be conducted in the periods or the component stages of the respective oil and gas contracts or upon the end of the respective oil and gas projects or component projects and the termination of such oil and gas contracts in accordance with the provisions of the signed oil and gas contracts and the Law on Oil and Gas.

2. Contractors shall be responsible for account-finalization of costs of oil and gas activities under oil and gas contracts upon the end of the periods or the component stages of their respective oil and gas contracts; upon the end of the respective oil and gas projects or component projects and upon the termination of such oil and gas contracts.

3. The Vietnam Oil and Gas Group shall be responsible for organizing the verification and approval of the reports on account-finalization of costs of oil and gas activities under oil and gas contracts made and submitted by the contractors, on the basis of the results of the audit of costs of oil and gas activities conduct by the Vietnam Oil and Gas Group in accordance with the signed oil and gas contracts and the Law on Oil and Gas. The Vietnam Oil and Gas Group is allowed to hire independent auditors (if necessary) to audit the reports on account-finalization of costs of oil and gas activities under oil and gas contracts submitted by the contractors.

Chapter X
IMPLEMENTATION PROVISIONS

Article 63. Effect

1. This Decree takes effect from July 1, 2023 and replaces Decree No. 95/2015/ND-CP dated October 16, 2015, of the Government, detailing a number of articles of the Law on Oil and Gas and Decree No. 33/2013/ND-CP dated April 22, 2013, of the Government, promulgating the model oil and gas product sharing contract.

2. Ministers, heads of ministerial-level agencies, heads of governmental agencies, chairpersons of People’s Committees of provinces and centrally-run cities shall be responsible for the implementation of this Decree.

Article 64. Transitional provisions

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

2. The joint operating companies representing the contractors operating oil and gas activities established before the effective date of this Decree may continue to operate in accordance with the provisions of the respective oil and gas contracts.

APPENDIX

 MODEL OIL AND GAS PRODUCTION SHARING CONTRACT

(Attached to the Government’s Decree No. 45/2023/ND-CP dated July 1, 2023)

________

OIL AND GAS PRODUCTION SHARING CONTRACT

BETWEEN

VIETNAM OIL AND GAS GROUP

WITH

……..

AND

…………..

FOR BLOCK ……….

THE SOCIALIST REPUBLIC OF VIETNAM

Hanoi, 20….

TABLE OF CONTENTS

Chapter I DEFINITIONS, EXHIBITS AND SCOPE OF CONTRACT

Article 1.1. Definitions

Article 1.2. Basic principles of the contract

Article 1.3. Participating Interest

Chapter II TERM, MINIMUM WORK COMMITMENTS AND SURRENDER OF CONTRACT AREA

Article 2.1. Term

Article 2.2. Minimum work and financial commitments

Article 2.3. Surrender of areas

Chapter III MANAGEMENT COMMITTEE

Article 3.1. Establishment of the Management Committee

Article 3.2. Rights and obligations of the Management Committee

Article 3.3. Operating mechanisms of the Management Committee

Chapter IV Work Program and Budget

Article 4.1. Oil and gas prospecting and exploration program

Article 4.2. Appraisal and Reporting on oil and gas resources and reserves

Article 4.3. Outline Development Plan for the oil and gas field and Development Plan for the oil and gas field

Article 4.4. Early Production Plan for the oil and gas field

Article 4.5. Further discoveries

Article 4.6. Annual Work Program and Budget

Article 4.7. Potential gas discovery

Article 4.8. Guidelines of PETROVIETNAM

Chapter V RIGHTS AND OBLIGATIONS OF THE PARTIES

Article 5.1. Contractor

Article 5.2. PETROVIETNAM

Chapter VI ALLOCATION OF OIL AND GAS

Article 6.1. Crude oil allocation

Article 6.2. Natural gas allocation

Chapter VII TAXES, FEES AND CHARGES

Article 7.1. Taxes, charges and fees

Article 7.2. Royalties

Article 7.3. Corporate income tax

Article 7.4. Export duty

Article 7.5. Capital gains tax

Article 7.6. Value-added tax

Article 7.7. Environmental protection fee

Article 7.8. Windfall tax on profit oil

Article 7.9. Other taxes, charges and fees

Article 7.10. Applicable benefits upon legal changes

Chapter VIII VALUATION, MEASUREMENT AND HANDLING OF OIL AND GAS

Article 8.1. Valuation of Crude Oil

Article 8.2. Valuation of natural gas and associated gas

Article 8.3. Measurement of oil and gas

Article 8.4. Production schedules

Article 8.5. Oil lifting and gas consumption

Chapter IX BONUSES AND DATA FEES

Article 9.1. Bonuses

Article 9.2. Data fees

Chapter X TRAINING, EMPLOYMENT AND SERVICES

Article 10.1. Training

Article 10.2. Employment and Services

Chapter XI ACCOUNTING, AUDITS AND ACCOUNT-FINALIZATION

Article 11.1. Accounting

Article 11.2. Audits

Article 11.3. Account-finalization of Oil and Gas Operation Costs

Chapter XII PARTICIPATION OF PETROVIETNAM AND ASSIGNMENT

Article 12.1. Participation of PETROVIETNAM

Article 12.2. Assignment

Chapter XIII PAYMENTS, CURRENCY AND EXCHANGE

Article 13.1. Payments

Article 13.2. Currency and exchange

Chapter XIV TITLE TO ASSETS, LEASED ASSETS AND ABANDONMENT

Article 14.1. Ownership of assets

Article 14.2. Leased assets

Article 14.3. Decommissioning

Chapter XV ARBITRATION, SOVEREIGN IMMUNITY AND EXPERT DETERMINATION

Article 15.1. Arbitration

Article 15.2. Sovereign immunity

Article 15.3. Expert determination

Chapter XVI TERMINATION AND DEFAULT

Article 16.1. Termination

Article 16.2. Default

Chapter XVII DOMESTIC CONSUMPTION

Article 17.1. Domestic sale of crude oil

Article 17.2. Obligation to sell Natural Gas

Chapter XVIII STABILIZATION AND UNITIZATION

Article 18.1. Stabilization

Article 18.2. Unitization and expansion

Chapter XIX FORCE MAJEURE

Article 19.1. Events of Force Majeure

Article 19.2. Effect and notice

Chapter XX MISCELLANEOUS

Article 20.1. Notices

Article 20.2. Applicable law

Article 20.3. Insurance

Article 20.4. Operator

Article 20.5. Relationship and liabilities

Article 20.6. Confidentiality

Article 20.7. Other agreements

Chapter XXI IMPLEMENTATION PROVISIONS

Article 21.1. Entry into force

Article 21.2. Integration

Article 21.3. Amendments and supplements

Article 21.4. Conflict

Article 21.5. Waiver

Article 21.6. Severance of provisions

Article 21.7. Publicity

Article 21.8. Originals and Languages

Annexes

[As agreed by Parties]

Annex A: Map and Co-ordinate of Contract Area;

Annex B: Accounting Procedure;

Annex C: Basic information for issuance of Investment Registration Certificate.

THIS OIL AND GAS PRODUCTION SHARING CONTRACT is made and entered into on ...dd ...mm ...yy, by and between:

VIETNAM OIL AND GAS GROUP, a single-member limited liability company incorporated and operating under the laws of the Socialist Republic of Vietnam, having its registered office at No. 18 Lang Ha, Ba Dinh District, Hanoi, the Socialist Republic of Vietnam (hereinafter referred to as “PETROVIETNAM”), on the first part, and

[.............................. ], a [ ] incorporated and operating under the laws of [ ] and having its registered address at [...... ] [hereinafter referred to as “...”]. [...] and [...] hereinafter referred to collectively as the “CONTRACTOR” and individually as the “Contractor Party” on the second part.

The parties of both first and second parts are hereinafter referred to individually as “Party” and collectively as “Parties” as the context may require.

WITNESSETH

Whereas, PETROVIETNAM with authority as prescribed in Article 61 of the Oil and Gas Law and CONTRACTOR desire to enter into the Oil and Gas Production Sharing Contract in order to undertake oil and gas exploration, appraisal, development and production operations in the Contract Area.

Whereas, the Parties desire to set forth the terms and conditions of this Contract in accordance with the Law on Oil and Gas to achieve the purposes and goals expressed hereunder.

Now, therefore, the Parties hereby agree as follows:

Chapter I

DEFINITIONS, EXHIBITS AND SCOPE OF CONTRACT

Article 1.1. Definitions

The terms used in this Contract and its Annexes in accordance with the Law on Oil and Gas shall have the meanings set forth below:

1.1.1. “Force Majeure” has the meaning ascribed to it in Chapter XIX.

1.1.2. “Party” has the meaning ascribed to it in the first part of this Contract and/or such party's lawful successors and/or assignees.

1.1.3. “Foreign Party” means any individual and/or legal entity established and registered under foreign law constituting CONTRACTOR and/or its lawful successors and/or assignees, excluding PETROVIETNAM, its Affiliates or other companies incorporated under the laws of Vietnam.

1.1.4. “Parties” has the meaning ascribed to it in the first part of this Contract and/or their lawful successors and/or assignees.

1.1.5. “Affiliate” of either Party to this Contract means an organization or other individual (i) which controls the respective Party or (ii) which is controlled by the respective Party to this Contract or (iii) which is controlled by an organization or individual which controls the respective Party. Control mentioned herein means ownership of more than fifty percent (50%) of the voting rights of such organization, individual or the direct or indirect right to appoint the majority or all members of the executive board of such Affiliate.

1.1.6. “Oil and Gas Operation Costs” means all expenditures made and incurred by CONTRACTOR to carry out oil and gas operations hereunder, including but not limited to the operations listed in Articles 1.1.30 thru 1.1.33, determined in accordance with the Accounting Procedure in Annex B and recovered in accordance with Article 6.1.2, Article 6.2.2 and Article 11.2.2.

1.1.7. “Government” means the Government of the Socialist Republic of Vietnam.

1.1.8. “Vietnam Accounting Standard” (VAS) means the accounting principles generally used and accepted in accounting practice in Vietnam.

1.1.9. “Expert” means an expert appointed in conformity with Article 15.3.

1.1.10. “Chapter” means a chapter of this Contract.

1.1.11. “Work Program and Budget” means a program itemizing the oil and gas operations established under this Contract for each Year with respective estimated budget therefor as prescribed in Chapter IV.

1.1.12. “Willful Misconduct” means any act or omission to act by any personnel of CONTRACTOR which was intended to cause, or which was in reckless disregard of or wanton indifference to, harmful consequences which such CONTRACTOR knew, or should have known, would have on the safety and property of another person or entity in connection with oil and gas operations carried out, or to be carried out, under this Contract.

1.1.13. "Profit Oil” means the portion of Crude Oil remaining after deducting Royalty Oil and Cost Recovery Oil from Net Oil Production in accordance with Article 6.1.

1.1.14. “Cost Recovery Oil” and “Cost Recovery Gas” mean the portion of Net Oil Production or Net Gas Production, as the case may be, from which costs recovery is to be made by CONTRACTOR in accordance with Articles 6.1.2 and 6.2.2.

1.1.15. “Royalty Oil” and “Royalty Gas” mean the portion of Net Oil Production or Net Gas Production, as the case may be, allocated for the satisfaction of Royalty obligations in accordance with Articles 6.1.1 and 6.1.2, respectively.

1.1.16. “Contract Area” means the initial area, the coordinates of which are set out and outlined in Annex A and as such will be amended from time to time in accordance with Article 2.3.

1.1.17. “Development Area” means that portion of the Contract Area duly retained for the development of a Commercial Discovery as further defined in Articles 2.1.3 and 2.3.4.

1.1.18. “Point of Delivery” means the point at which Oil and Gas reaches the outlet of the loading flange of the oil tanker or storage facility used to lift or offtake Oil and Gas or such other points as may be agreed by the Parties.

1.1.19. “Article” means an article in this Contract.

1.1.20. “US Dollar” or “USD” means the lawful currency of the United States of America.

1.1.21. “Dong” or “VND” means the lawful currency of the Socialist Republic of Vietnam.

1.1.22. “Market Price” means the price for crude oil lifted or consumed by the Contractor Parties at the Point of Delivery as determined for all purposes hereunder in accordance with Article 8.1.

1.1.23. “Exploration Period” means the period during which Exploration Operations are conducted in component phases in accordance with Article 2.1.1.

1.1.24. “Investment Registration Certificate” means the investment registration certificate issued by the Ministry of Industry and Trade in respect of this Contract, and its amendments (if any).

1.1.25. “Well” means a hole drilled into the earth for the purpose of exploration, appraisal and production of oil and gas.

1.1.26. “Development Well” means a Well that is drilled in a reservoir, product layer or field for the purpose of conducting the following activities: production of hydrocarbons or fluids; observation, monitoring of the changes of a reservoir; injection of fluids into the reservoir or product layer; and injection of fluids into the well.

1.1.27. “Exploration Well” means either Wildcat Well or Appraisal Well.

1.1.28. “Appraisal Well” means a Well that is drilled for the purpose of obtaining information on the scale of reserves and characteristics of a product reservoir, product layer or field.

1.1.29. “Wildcat Well” means a Well (whether a dry well or a well where there is a discovery) drilled in the Contract Area for the purpose of finding an oil and gas accumulation in a prospect or prospects other than any which have been previously drilled by CONTRACTOR.

1.1.30. “Oil and Gas Production Operations” mean operations conducted by the contractor for the purpose of recovering oil and gas from the oil and gas field in the Contract Area, including: the operation and maintenance of the necessary facilities and equipment; scheduling, controlling, measuring, testing and carrying out the flow; and gathering, treating, storing and dispatching crude oil, associated gas and natural gas from the Oil and Gas reservoir to the Point of Delivery.

1.1.31. "Oil and Gas Field Development Operations" mean operations conducted by the Contractor, including planning, designing, procuring, creating, building, and installing oil and gas structures to produce oil and gas with a view to the development of oil and gas accumulations underlying Development Areas. Oil and Gas Field Development Operations include, but are not limited to, reservoir, geological and geophysical studies and surveys; drilling, testing, completing, recompleting and reworking of Development Wells, the drilling and completion of Production Wells; planning, design, construction and contracting in order to transport and install product-gathering lines, onshore and offshore platform facilities, equipment installations, separators, tankage, pumps, artificial lifts and other producing, gathering and injection facilities and related activities required in order to produce, process, treat, transport, store and deliver oil and gas, and other operations as required for the safe and efficient development of the oil and gas accumulation.

1.1.32. “Decommissioning of Oil and Gas Structures” means an activity conducted for the purpose of demolition, dismantlement, destruction, conversion, and temporary or permanent preservation or other technical measures conformable to law and International Oil and Gas Industry Practices with regard to oil and gas structures that are no longer necessary for oil and gas operations, which are constructed by CONTRACTOR with respect to oil and gas operations in accordance with Article 14.3.

1.1.33. “Oil and Gas Exploration Operations” means operations conducted in accordance with this Contract with a view to the discovery of oil and gas accumulations, and to the appraisal of such oil and gas accumulations, the characteristics of the relevant reservoir(s) and their likely behavior when produced. Oil and Gas Exploration Operations may include, but are not limited to: geological, geophysical, geochemical, aerial and other surveys, analysis and studies; drilling, deepening, sidetracking, plugging back, testing, completing, recompleting, redrilling and abandonment of Exploration Wells, taking samples and stratigraphic tests and testing of such Wells; and all activities related to such operations.

1.1.34. “Contract” means this Oil and Gas Production Sharing Contract and the Annexes attached hereto, together with any amendments hereto in accordance with the laws of Vietnam and this Contract.

1.1.35. “Commercial Production” means the production of oil and gas from a Commercial Discovery and delivery of the same at the Point of Delivery under a program of regular production and sale after the Oil and Gas Field Development Plan has been approved for such Commercial Discovery.

1.1.36. “Profit Gas” means the portion of Net Gas Production remaining after deducting Royalty Gas and Cost Recovery Gas in accordance with Article 6.2.

1.1.37. “SOFR” means Secured Overnight Financing Rate collateralized by U.S. Treasury securities. Three (3)-month SOFR is calculated based on the SOFR futures market published by CME Group - a registered Benchmark Administrator, authorized and supervised by the UK Financial Conduct Authority (FCA).

1.1.38. “Production Schedule” means the summarized profile of crude oil output in Barrels per day or Natural Gas output in Cubic Meters per day as prepared by CONTRACTOR and approved by the Management Committee and approved by PETROVIETNAM, in accordance with the Work Program and Budget for Development Operations and Production Operations in each Development Area.

1.1.39. “Law on Oil and Gas” means the Law on Oil and Gas No. 12/2022/QH15, which was passed by the National Assembly of the Socialist Republic of Vietnam on November 14, 2022, and took effect on July 1, 2023 and its subsequent amendments and supplements.

1.1.40. “Law on Investment” means the Law on Investment passed by the National Assembly of the Socialist of Vietnam on June 17, 2020, and took effect on January 1, 2021 and its subsequent amendments and supplements.

1.1.41. “Cubic Meter” means one cubic meter of Natural Gas at atmospheric pressure of one hundred and one point three two five (101.325) kilopascals and at a temperature of 15 degrees Celsius (15°C).

1.1.42. “Cubic Meters per Day” means the volume of natural gas in cubic meters that is produced in the Contract Area or the Oil and Gas Field each day.

1.1.43. “Year” means a period of twelve (12) consecutive months commencing on January 1 and ending on December 31 in accordance with the Gregorian calendar.

1.1.44. “Contract Year” means a period of twelve (12) consecutive months in accordance with the Gregorian calendar commencing on the Effective Date of this Contract.

1.1.45. “Effective Date” means the date of issuance of the Investment Registration Certificate in respect of this Contract by the Ministry of Industry and Trade.

1.1.46. “First Commercial Production Date” means the day following the thirtieth (30th) day of continuous oil and gas production from the Contract Area via a production system including but not limited to one or more Development Wells connected to a floating production storage offload vessel or via pipelines to an onshore storage and export terminal, but excludes any long-term well tests.

1.1.47. “Business Day” means any day on which commercial banks in Vietnam are customarily open for full business.

1.1.48. “Budget” means the total estimated costs required to carry out oil and gas operations pursuant to a specific Work Program.

1.1.49. “Operator” means the entity appointed under Article 20.4 to represent the Contractor Party to the Contract in order to operate the oil and gas operations and to perform several obligations and responsibilities within the scope of authorization under this Contract.

1.1.50. “CONTRACTOR” or “Contractor Party/Parties” has the meaning ascribed to it in the first part of this Contract and/or its lawful successors and/or assignees, and in accordance with Chapter XII, which may include an Affiliate designated by PETROVIETNAM.

1.1.51. “Senior Supervisory Personnel” means any supervisory employee of CONTRACTOR who functions as officer, designated manager or supervisor responsible for, or in charge of on-site drilling, construction or production and related operations, or any other field operations and any employee of CONTRACTOR who functions at a management level equivalent to or superior to the aforementioned manager or supervisor.

1.1.52. “Oil and Gas Discovery” means an accumulation of oil and gas discovered by well drilling.

1.1.53. “Commercial Discovery” means an Oil and Gas Discovery which, in the sole opinion of CONTRACTOR, can be exploited economically.

1.1.54. “Quarter” means a period of three (3) consecutive calendar months commencing on January 1, April 1, July 1 and October 1.

1.1.55. “Participating interests” means the rights, interests, obligations and responsibilities of CONTRACTOR under this Contract. Participating interests of each contractor at each time is expressed in percentage, and recorded in this Contract and the Investment Registration Certificate.

1.1.56. “Net Oil Production” means Crude Oil produced and saved from the Contract Area, not include Crude Oil used for the purpose of oil and gas operations or normal waste during oil and gas operations in the Contract Area.

1.1.57. “Net Gas Production” means Natural Gas, Coal Gas, Shale Gas or Argillite Gas produced and saved from the Contract Area, not include any Natural Gas returned to the field or used or flared for the purpose of oil and gas operations or normal waste during oil and gas operations in the Contract Area.

1.1.58. “Barrels per Day” means the quantity of barrels of crude oil that is produced in the Contract Area or the Oil and Gas Field each day.

1.1.59. “Accounting Procedure” means the document describing the methods of making accounting book entries and conducting cost accounting during the conduct of oil and gas operations for the purpose of this Contract, in accordance with the laws of Vietnam and in conformity to the Vietnam Accounting Standards (VAS) and the International Financial Reporting Standards (IFRS).

1.1.60. “Gas Purchase and Sale Agreement” means the agreement providing for consumption of Natural Gas produced in accordance with each Development Plan for oil and gas fields, as prescribed in Article 8.5.

1.1.61. “Joint Operating Agreement” means the agreement regulating the management of CONTRACTOR's operations and which sets out the rights and obligations corresponding to the Participating Interest of each Contractor Party during the conduct of oil and gas operations.

1.1.62. “Oil Lifting Agreement” means the agreement providing for the lifting and delivery of Crude Oil produced in accordance with the Development Plan for the oil and gas field, as prescribed in Article 8.5.

1.1.63. “Confidential Information” means all technical, technological and commercial data and information which may be owned by CONTRACTOR after the Effective Date including, but not limited to, all patents, intellectual property, technical know-how, designs, concepts, work programs and budgets, financial statements, invoices, sales and pricing information, and data related to production, marketing and service capability which CONTRACTOR develops after the Effective Date and which relates to oil and gas operations and the terms and conditions of this Contract.

1.1.64. “Royalty” means the money collected in cash or in kind, at the option of the Government, for the right to produce Oil and Gas from the Contract Area, payable by the Contractor Parties in accordance with Articles 6.1.1 and 6.2.1.

1.1.65. “Barrel” means a unit of Crude Oil consisting of one hundred and fifty-eight point nine eight seven (158.987) liters at atmospheric pressure of one hundred and one point three two five (101.325) kilopascals and a temperature of 15 degrees Celsius (15ºC).

1.1.66. “Management Committee” means a committee established in accordance with Chapter III.

Article 1.2. Basic principles of the contract

1.2.1. This Contract is an Oil and Gas Production Sharing Contract in accordance with the Law on Oil and Gas and other relevant law regulations in Vietnam.

1.2.2. This Contract establishes the principles, terms and conditions under which CONTRACTOR is granted the exclusive right to conduct oil and gas operations aimed at exploring, appraising, developing and producing Oil and Gas in the Contract Area and other related activities including rights to export, sell or dispose oil and gas under the Contract.

1.2.3. CONTRACTOR has the obligation to carry out oil and gas operations at its own expense in a safe and efficient manner and at its own risk in accordance with the provisions in this Contract, the laws of Vietnam and International Oil and Gas Industry Practices.

1.2.4. Oil and Gas Operation Costs shall be borne and recovered by CONTRACTOR in accordance with the Contract.

Article 1.3. Participating Interest

Participating Interests of the Contractor Parties on the Effective Date are as follows:

- [….]: [….]%

- [….]: [….]%

Chapter II

TERM, MINIMUM WORK COMMITMENTS AND SURRENDER OF CONTRACT AREA

Article 2.1. Term

2.1.1. The term of this Contract is [...](...) Contract Years from the Effective Date and may be extended up to five (5) years if mutually agreed by the Parties and approved by the Ministry of Industry and Trade. Subject to Articles 2.1.4 and 2.1.5 hereunder, the Exploration Period of this Contract shall be […](…) Contract Years from the Effective Date, may be extended but not to exceed […](…) years and will be divided into component phases: […] (...) Contract Year(s) for the first phase (“Phase One”) and […](…) (...) Year(s) for the second phase (“Phase Two”), and […](…) Year(s) for the third phase (“Phase Three”). Decision to enter into Phase Two or Phase Three shall be at the option of CONTRACTOR and such decision shall be notified to PETROVIETNAM no later than fifteen (15) days prior to the end of Phase One or Phase Two, respectively.

2.1.2. Subject to the provisions of Articles 2.1.4, 2.1.5 and 2.3.4.1, this Contract shall terminate if at the end of the Exploration Period (including extension thereof, if any) no Commercial Discovery in the Contract Area has been declared.

2.1.3. Immediately upon determination of a Commercial Discovery in any portion of the Contract Area, the development of such Commercial Discovery shall be commenced in accordance with Chapter IV. In other portions of the Contract Area outside a Development Area or Development Areas, exploration may continue concurrently subject to the provisions of Articles 2.1.4, 2.1.5 and 2.3.

2.1.4. At least ninety (90) days prior to the end of any phases of the Exploration Period as prescribed in Article 2.1.1:

2.1.4.1. If CONTRACTOR has made an Oil and Gas Discovery in the Contract Area, where the term of any phase concerned is insufficient for CONTRACTOR to appraise such Oil and Gas Discovery, then the term of this phase shall be reasonably extended with the consent of PETROVIETNAM and the approval of the competent authority to enable CONTRACTOR to make an appraisal of such Oil and Gas Discovery.

2.1.4.2. If one or more Exploration Wells have been scheduled or are in the course of being drilled, then the term of any phase concerned shall be reasonably extended with the consent of PETROVIETNAM and the approval of the Ministry of Industry and Trade to allow CONTRACTOR to complete the drilling and appraise the results thereof.

The foregoing extension shall not exceed five (05) years [or ten (10) years for oil and gas blocks subject to preferential investment policies or special investment incentives].

2.1.5. Subject to the consent of PETROVIETNAM and the approval of the competent authorities upon the proposal submitted by CONTRACTOR for an additional work program for Oil and Gas Exploration Operations in the Contract Area, at the end of the Exploration Period, such Exploration Period shall be extended for a reasonable period to allow CONTRACTOR to carry out such additional work program.

2.1.6. In the case where the Exploration Period is extended for the purpose of appraisal operations in accordance with Article 2.1.4 or in the circumstances set out in Article 2.1.5, such period of extension shall be included in the maximum extension of the Exploration Period as regulated in Article 2.1.1 and the Contract term shall be extended for a period equivalent to the period for which the Exploration Period was extended.

2.1.7. In case of Force Majeure, the Parties may agree on the suspension method for the implementation of certain rights and obligations under the Contract and such method is subject to the approval of the competent authority prescribed in the Law on Oil and Gas. The duration of suspension of the exercise of a number of rights and performance of a number of obligations under the Contract due to a Force Majeure reason shall be counted from the time the Force Majeure event is declared till the time the Force Majeure event ends.

Article 2.2. Minimum work and financial commitments

2.2.1. CONTRACTOR shall commence oil and gas operations hereunder not later than thirty (30) days after PETROVIETNAM’s approval of the Work Program and Budget.

2.2.2. CONTRACTOR shall carry out the following minimum work commitment and minimum financial commitment:

[In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

Phase One:

Phase Two:

Phase Three:

In the case where CONTRACTOR has exceeded the minimum work commitment for each phase, such excess work shall be allowed to be credited against the minimum work of a similar nature for the following phase if and when CONTRACTOR decides to opt into the subsequent phase.

2.2.3. Minimum financial commitments referred in Article 2.2.2 are only for the purpose of guidance with respect to the carrying out of the exploration program in any phase concerned. However, in the event that CONTRACTOR does not complete the minimum work commitment in any phase concerned, CONTRACTOR must pay to PETROVIETNAM a sum equivalent to the value of any outstanding minimum work commitment that has not been fulfilled within ninety (90) days from the end of such phase.

2.2.4. If CONTRACTOR has completed the minimum work commitments at a cost less than the minimum financial commitments set out in Article 2.2.2 hereto, CONTRACTOR shall be deemed to have satisfied its financial obligations and shall have no obligation to pay PETROVIETNAM all or any portion of the amount by which such minimum financial commitments exceed actual expenditure made in carrying out such minimum work commitments.

2.2.5. For the avoidance of doubt, additional work programs during the period of extension of the Exploration Period as specified in Article 2.1.5 or in the period in which it is permitted to retain a part of the Contract Area as specified in Article 2.3.4.1.2 or in the period of temporary suspension of the obligation to surrender the area, shall be deemed the minimum work commitment for the period of extension or retention or suspension of the obligation to surrender the area. In the case where CONTRACTOR fails to complete the amount of the work commitment corresponding to the period of the permitted extension, retention or suspension of the obligation to surrender the area, Article 2.2.3 shall apply mutatis mutandis.

2.2.6. CONTRACTOR may propose to modify the committed work identified in the Contract for the purpose of improving efficiency or facilitating the performance of oil and gas operations as prescribed in the Contract. CONTRACTOR shall submit a written request for modification of the committed work to PETROVIETNAM, specifying the committed work to be modified, the reasons for requesting the modification, the justification for the modification, and the plan for performing the committed work after modification. PETROVIETNAM shall report to the Ministry of Industry and Trade for evaluation and escalation to the Prime Minister for approval. The modified committed work and the respective minimum financial commitment shall be deemed CONTRACTOR's minimum work commitment and minimum financial commitment under the Contract.

Article 2.3. Surrender of areas

2.3.1. If CONTRACTOR elects to enter Phase Two, before or by the end of Phase One plus any extension thereof, CONTRACTOR shall surrender no less than twenty percent (20%) of the Contract Area. If CONTRACTOR elects to enter Phase Three, if applicable, before or by the end of Phase Two plus any extension thereof, CONTRACTOR shall surrender no less than an additional twenty percent (20%) of the Contract Area.

In the case where CONTRACTOR elects not to enter Phase Two before or by the end of Phase One or elects not to enter Phase Three, if applicable, before or by the end of Phase Two, CONTRACTOR shall be relieved of its work commitment defined respectively for the next phase.

2.3.2. Any parts of the Contract Area to be surrendered under Article 2.3.1 hereof shall not cover any Development Area, Gas Discovery Area that has been made by CONTRACTOR.

2.3.3. At any time earlier than the time provided in Article 2.3.1, with thirty (30) day prior written notice to PETROVIETNAM, CONTRACTOR has the right to surrender an acceptable portion of the Contract Area, in accordance with Article 2.3.5, and such portion shall then be credited against that portion of the Contract Area which CONTRACTOR is next required to surrender under the provisions of Articles 2.3.1 and 2.3.4. Such surrender ahead of schedule shall not relieve CONTRACTOR of any outstanding obligations and/or liabilities arising from oil and gas operations pertaining to the portion of the relevant Contract Area to be surrendered.

2.3.4.

2.3.4.1. Without prejudice to the provisions of Articles 2.1.4 and 2.1.5 hereof, notwithstanding Article 3.1, before or by the end of the Exploration Period plus any extension thereof, CONTRACTOR shall surrender all remaining parts of the Contract Area excluding the following as CONTRACTOR may determine:

2.3.4.1.1. All Development Areas and all Gas Discovery Areas as designated in Article 4.7; or

2.3.4.1.2. In the case where CONTRACTOR wishes to reclaim any portion of the Contract Area outside a Development Area or Gas Discovery Area which has previously been surrendered or cannot be retained by the CONTRACTOR under Article 2.3.4.1.1, CONTRACTOR shall submit to PETROVIETNAM an additional Work Program and Budget for oil and gas operations setting forth: the portion of the area which it wishes to reclaim belonging to the initial Contract Area or the portion of the area which it wishes to expand belonging to the area previously surrendered; and additional Oil and Gas Exploration Operations which the CONTRACTOR proposes to carry out in respect of such portion to be reclaimed and the Budget estimated by the CONTRACTOR within which such operations will be completed. PETROVIETNAM shall submit to the competent authority for consideration the request to allow the CONTRACTOR to reclaim the desired area in each specific case following the process and procedures for expanding the oil and gas contract area as prescribed in Clause 6, Article 32 of the Law on Oil and Gas, together with the additional Work Program and Budget commitment.

2.3.4.2. CONTRACTOR shall carry out Oil and Gas Exploration Operations in accordance with such additional Work Program and Budget approved in accordance with Article 2.3.4.1.2, including the amendments thereof (if any) agreed upon by CONTRACTOR and PETROVIETNAM.

2.3.4.3. In the case where, as a result of the Oil and Gas Exploration Operations prescribed in Article 2.3.4.2:

2.3.4.3.1. Any new Commercial Discovery is made, a Development Area for such Commercial Discovery shall be justifiably established for the purposes of this Contract;

2.3.4.3.2. Any existing Commercial Discovery in the Contract Area is determined to extend beyond the Development Area originally established in respect thereof, such initial Development Area shall be justifiably adjusted by the mutual agreement of the Parties;

2.3.4.3.3. any new Discovery of Natural Gas is made, the Development Area for such Discovery may in accordance with Article 4.7 be designated as a Gas Discovery Area.

CONTRACTOR shall, upon completion of the evaluation of the results of the work program and the establishment of any new Development Area or the adjustment of any existing Development Area resulting therefrom or the establishment of any new Gas Discovery Area, relinquish all remaining parts of the Contract Area not within the new or adjusted Development Area(s) or new Gas Discovery Area(s).

2.3.5. CONTRACTOR shall notify PETROVIETNAM in advance of the date of surrender of the portion(s) to be surrendered. CONTRACTOR and PETROVIETNAM shall consult with each other regarding the shape and size of each individual portion of the Contract Area being surrendered. Before any surrender or prior to the termination of this Contract, CONTRACTOR shall, at PETROVIETNAM’s request, remove from the Contract Area being surrendered all equipment or facilities installed or constructed by CONTRACTOR which is no longer necessary for the conduct of oil and gas operations.

Chapter III
MANAGEMENT COMMITTEE

Article 3.1. Establishment of the Management Committee

Within thirty (30) days from the Effective Date, the Parties shall set up a Management Committee under this Contract. The Management Committee shall be responsible for assisting PETROVIETNAM and CONTRACTOR to supervise and monitor oil and gas operations in the Contract Area pursuant to approved Work Programs and Budgets and in accordance with this Contract.

The Management Committee shall consist of [...](...) members, [...] (...) of whom shall be designated by PETROVIETNAM and the other [...] (...) by the CONTRACTOR. The number of members comprising the Management Committee may be increased or decreased from time to time as mutually agreed by the Parties. CONTRACTOR shall designate one of its members as Chairman for the meetings before declaration of the first Commercial Discovery and PETROVIETNAM shall designate one of its members as Chairman for the meetings of the Management Committee thereafter. Each member shall have one (1) vote. Meetings of the Management Committee shall require a quorum of [...](...) members, at least [...] (...) of whom shall be the representatives of each Party. Any member who is unable to attend a meeting of the Management Committee may be represented and voted for by another member or other person pursuant to a written and signed proxy from such absent member.

Article 3.2. Rights and obligations of the Management Committee

The Management Committee shall have the rights and obligations as follows:

- To approve and confirm the implementation of the Annual Work Program and Budget, including amendments and supplements (if any);

- To approve the procurement process for selecting goods and service providers to serve oil and gas operations;

- To approve oil and gas prospecting and exploration programs and appraisal plans proposed by CONTRACTOR;

- To approve Reports on oil and gas resources and reserves of the Oil and Gas Discovery and adjusted reports made by CONTRACTOR;

- To approve the Outline Development Plan for the oil and gas field and adjusted plans (if any) during the period of time prescribed in the Contract;

- To approve the Early Production Plan for the oil and gas field and adjusted plans (if any) during the period of time prescribed in the Contract;

- To approve the Oil and Gas Field Development Plan and adjusted plans (if any) during the period of time prescribed in the Contract;

- To approve the Plan on Decommissioning of Oil and Gas Structures and adjusted plans (if any) during the period of time prescribed in the Contract;

- To approve the Annual Production Schedule and adjustments/modifications during the period of time prescribed in the Contract;

- To approve proposals for surrender or suspension of surrender obligations, retention, reclamation, expansion of Contract Area, unitization of oil and gas fields, proposals for extension of the component phases of the Exploration Phase, additional work commitments or modifications during the Operator's extension period;

- To establish necessary sub-committees upon requests and in accordance with this Contract;

- The Management Committee shall supervise and monitor the accounting for costs, expenses and expenditure and maintenance of books for the oil and gas operations in accordance with the provisions of this Contract and the Accounting Procedure;

- To decide other issues under the authority of Management Committee in accordance with this Contract.

Article 3.3. Operating mechanisms of the Management Committee

3.3.1. The Management Committee shall meet at least once a Year unless otherwise agreed. Either Party may convene the Management Committee by sending a written notice to the Chairperson specifying the purpose of the meeting. The Chairperson shall then convene the meeting within thirty (30) days from the date of receiving the aforementioned notice or within a shorter period but not less than seven (7) days upon the request of the Party proposing the convening of the meeting, if the thirty (30) day period could significantly prejudice the matter to be discussed.

3.3.2. In the case where the Management Committee agrees that any matter may be decided without holding a meeting, Management Committee members may at any time cast their respective vote on the matter by any means agreed upon by members of the Management Committee, which should be sent to the Operator. Upon receiving all votes, the Operator shall inform the Parties of the decision reached. Such decision shall bind the Parties as if voted upon in a meeting. The Operator shall keep a written record of each such vote. Upon the expiration of such time limit, if any member of Management Committee does not give written notice of its decision on the concerned matter, such matter shall be deemed to be approved by such member.

3.3.3. Representatives of each Party attending a Management Committee meeting may be accompanied by a reasonable number of advisors. Such advisors shall not be entitled to vote at the meeting. All reasonable per diem expenses incurred by each member and his/her advisor(s) in attending Management Committee meetings shall be borne by CONTRACTOR and be deemed recoverable Oil and Gas Operation Cost.

3.3.4. The decisions of the Management Committee shall be based on the consensus voting of the present members and their authorized representatives except for exploration and appraisal matters before declaration of the first Commercial Discovery, which shall be decided by the Management Committee on the basis of a majority vote or as the Parties may otherwise agree.

Chapter IV
WORK PROGRAM AND BUDGET

Article 4.1. Oil and gas prospecting and exploration program

4.1.1. Within six (06) months from the Effective Date, CONTRACTOR shall formulate an Oil and Gas Exploration Program as guidance for the oil and gas exploration operations in the Contract Area in each component phase, including but not limited to the main details prescribed in Clause 2, Article 44 of the Law on Oil and Gas.

4.1.2. Within thirty (30) days from the date of receiving the Oil and Gas Exploration Program or the updated Oil and Gas Exploration Program (subject to any amendments thereto which the Management Committee may require), the Management Committee shall consider approving such Oil and Gas Exploration Program. If the Management Committee does not provide a written document adopting the Oil and Gas Exploration Program within the aforementioned thirty (30) days, such Oil and Gas Exploration Program shall be deemed to have been approved by the Management Committee.

4.1.3. Within ten (10) days after the Management Committee has approved the plan, CONTRACTOR must put forward the Oil and Gas Exploration Program to PETROVIETNAM for review and approval.

4.1.4. In case of any amendment to the main details of the Oil and Gas Exploration Program prescribed in Article 4.1.1, CONTRACTOR shall follow the procedures for seeking approval of the amended Oil and Gas Exploration Program similar to the procedures and process for approval of the Oil and Gas Exploration Program as prescribed herein.

4.1.5. During the development and production of the oil and gas field, CONTRACTOR may propose to conduct additional oil and gas exploration operations and formulate additional Oil and Gas Exploration Programs with the main details as prescribed in Article 4.1.1 and mutatis mutandis. CONTRACTOR shall follow the procedures for seeking approval of the additional Oil and Gas Exploration Program similar to the procedures and process for approval of the Oil and Gas Exploration Program as prescribed herein.

Article 4.2. Appraisal and Reporting on oil and gas resources and reserves

If CONTRACTOR determines that an Oil and Gas Discovery has been made, CONTRACTOR shall notify the Management Committee and PETROVIETNAM as soon as practicable.

Within ninety (90) Days after such notice, CONTRACTOR shall submit to the Management Committee an appraisal plan for the relevant Oil and Gas Discovery, then the Management Committee shall review and adopt the proposed appraisal plan submitted by CONTRACTOR within thirty (30) days after the date of receiving such plan. Within ten (10) days after the Management Committee's adoption of the appraisal plan, CONTRACTOR shall submit such appraisal plan to PETROVIETNAM for the final approval. PETROVIETNAM shall review and approve the appraisal plan submitted by CONTRACTOR within thirty (30) days from the date of receiving it.

CONTRACTOR shall immediately implement the appraisal plan approved by PETROVIETNAM. Within ninety (90) days after completion of such appraisal plan, or another period of time as approved by PETROVIETNAM, CONTRACTOR shall submit to the Management Committee and PETROVIETNAM the appraised Report on oil and gas resources and reserves of the Oil and Gas Discovery which must contain the details required by the law regulations on oil and gas.

In the case where the appraisal, to the sole satisfaction of CONTRACTOR, shows:

4.2.1. a commercial oil discovery, CONTRACTOR shall notify the Management Committee and PETROVIETNAM of such Commercial Discovery, and at the same time proposing the determination of the Development Area for the declared Commercial Discovery in accordance with this Contract and International Oil and Gas Industry Practices. The date of notice shall be the date on which such Commercial Discovery is declared.

4.2.2. a potentially commercial gas discovery, CONTRACTOR shall comply with Article 4.7 of this Contract.

The Management Committee shall consider and approve the Report on Oil and Gas Resources and Reserves of the Commercial Discovery submitted by CONTRACTOR within thirty (30) days from the date of receiving such report. Within ten (10) days after the Management Committee has approved the report, CONTRACTOR shall put forward such Report on Oil and Gas Resources and Reserves to PETROVIETNAM for the latter to consider and escalate to the Ministry of Industry and Trade for approval in accordance with applicable law regulations on management of oil and gas resources and reserves.

Article 4.3. Outline Development Plan for the oil and gas field and Development Plan for the oil and gas field

Within nine (09) months from the date of approval of the Report on oil and gas resources and reserves with respect to any Commercial Discovery within the Contract Area, CONTRACTOR must submit an official and complete Outline Development Plan for such Commercial Discovery to the Management Committee.

Within thirty (30) days from the date of receiving the Outline Development Plan for the oil and gas field, the Management Committee shall consider (or subject to any amendments thereto which the Management Committee may require) to adopt such Outline Development Plan for the oil and gas field. If the Management Committee does not provide a written document adopting the Outline Development Plan for the oil and gas field within the aforementioned thirty (30) days, such Outline Development Plan for the oil and gas field shall be deemed to have been approved by the Management Committee.

Within ten (10) days after the Management Committee's approval, CONTRACTOR shall put forward the Outline Development Plan for the oil and gas field to PETROVIETNAM for review and approval, and then escalation to the Ministry of Industry and Trade for final approval, subject to any amendments thereto which PETROVIETNAM may require. Within forty-five (45) days from the date on which CONTRACTOR submitted the plan or forty-five (45) days from the date of receiving the plan as amended at the request of PETROVIETNAM or competent authority (if any), as the case may be, PETROVIETNAM shall put forward such Outline Development Plan for the oil and gas field to the Ministry of Industry and Trade for its final approval.

In case of any amendment to the main details of the Outline Oil and Gas Field Development Plan, CONTRACTOR shall follow the procedures for seeking approval of the adjusted Outline Oil and Gas Field Development Plan similar to the procedures and process for approval of the Outline Oil and Gas Field Development Plan as prescribed herein and in Clause 5, Article 46 of the Law on Oil and Gas.

Within eighteen (18) months from the date the Outline Oil and Gas Field Development Plan or the adjusted Outline Oil and Gas Field Development Plan is approved, CONTRACTOR shall submit to the Management Committee the Oil and Gas Field Development Plan for the related Commercial Discovery. The Oil and Gas Field Development Plan shall be based on the selected option of the Outline Oil and Gas Field Development Plan or the adjusted Outline Oil and Gas Field Development Plan approved for the purpose of optimal development and production, including but not limited to the main details prescribed in Clause 2, Article 48 of the Law on Oil and Gas and other information as requested by the Management Committee.

Within thirty (30) days from the date on which CONTRACTOR submits it or thirty (30) days from the date of receiving the Oil and Gas Field Development Plan with adjustments upon request of the Management Committee, as the case may be, the Management Committee shall consider approving such Oil and Gas Field Development Plan. If CONTRACTOR does not receive any response from the Management Committee within the aforementioned thirty (30) days then the Oil and Gas Field Development Plan shall be deemed to have been approved by the Management Committee.

Within ten (10) days after the Management Committee has approved the plan, CONTRACTOR must put forward the Oil and Gas Field Development Plan to PETROVIETNAM for review and approval. Within six (06) months after CONTRACTOR has put forward the plan to PETROVIETNAM, subject to any amendments or supplements as requested, CONTRACTOR shall, together with PETROVIETNAM, attempt to complete the Oil and Gas Field Development Plan for escalation to the Ministry of Industry and Trade for consideration and final approval.

In case of any amendment to the main details of the Oil and Gas Field Development Plan, CONTRACTOR shall follow the procedures for seeking approval of the adjusted Oil and Gas Field Development Plan similar to the procedures and process for approval of the Outline Oil and Gas Field Development Plan as prescribed herein and in accordance with Clause 5 and Clause 6, Article 48 of the Law on Oil and Gas.

Article 4.4. Early Production Plan for the oil and gas field

In the case where CONTRACTOR wishes to proceed with early production of the oil and gas field, on the basis of the approved Outline Development Plan for the oil and gas field, CONTRACTOR shall prepare an Early Production Plan for the oil and gas field and submit it to PETROVIETNAM for review and escalation to Ministry of Industry and Trade for final approval in accordance with Article 47 of the Law on Oil and Gas, following the same procedures as for the Oil and Gas Field Development Plan as prescribed in this Contract.

Article 4.5. Further discoveries

In respect of further discoveries, CONTRACTOR shall comply mutatis mutandis with Articles 4.2, 4.3, and 4.4.

Article 4.6. Annual Work Program and Budget

4.6.1. Within sixty (60) days of the Effective Date in the first year and thereafter at least ninety (90) days prior to the beginning of each Year or at such other times as may otherwise be mutually agreed by the Parties, CONTRACTOR shall prepare and submit an annual Work Program and Budget for the Contract Area in the immediately subsequent Year in accordance with the Contract and the approved programs, reports, and plans (if any) for PETROVIETNAM to consider and approve them.

4.6.2. Within sixty (60) days prior to the production of the first oil, gas flow or ninety (90) days prior to the beginning of each subsequent Year, CONTRACTOR shall submit to the Management Committee for adoption and PETROVIETNAM for approval an annual Production Schedule in the Work Programs and Budgets (in subsequent Years), which is based on the production plan proposed in the Oil and Gas Field Development Plan or the adjusted Oil and Gas Field Development Plan that has been approved, and updated information obtained during the conduct of Oil and Gas Field Development Operations and Oil and Gas Production Operations and which shall be in accordance with International Oil and Gas Industry Practices.

4.6.3. Annual Work Programs and Budgets as prescribed in Articles 4.6.1 and 4.6.2 shall be approved by the Management Committee within thirty (30) days from the date on which CONTRACTOR submits them. Within ten (10) days after the Management Committee's adoption, CONTRACTOR shall submit the same to PETROVIETNAM for its approval. PETROVIETNAM shall consider and approve within thirty (30) days from the date of receiving additional amended information pursuant to a request for amendment. CONTRACTOR shall carry out the approved Work Programs and Budgets and is not obliged to obtain any further consents or approvals for amounts additional to that already approved by the Management Committee and PETROVIETNAM for the relevant Year which do not exceed 10% of any budgeted item in the relevant Budget, always provided that the total additional amounts so expended do not exceed 5% of the total Budget approved for the relevant year.

4.6.4. The process for approval of amended Work Programs and Budgets shall be applied similarly as prescribed in Articles 4.6.1, 4.6.2, and 4.6.3 mutatis mutandis.

Article 4.7. Potential gas discovery

In the case where CONTRACTOR identifies a quantity of Natural Gas [Argillite Gas, Coal Methane, Shale Gas] with commercial potential in the Contract Area:

4.7.1. If there is an existing consumption market and available conditions in terms of pipelines and appropriate processing facilities, CONTRACTOR shall commit to early production of the potential Gas Discovery. The Parties shall use their best endeavors to find gas markets. CONTRACTOR must develop such Gas Discovery in accordance with Articles 4.3 and 4.4 in order to meet the demand of the relevant commercial agreements; or

4.7.2. If there is an existing consumption market but no available conditions in terms of pipelines and appropriate processing facilities, in accordance with Clause 5, Article 31 of the Law on Oil and Gas, CONTRACTOR may retain the respective Gas Discovery Area with commercial potential pursuant to the approval of the competent authority. During the period of retaining the Gas Discovery Area with commercial potential, CONTRACTOR shall perform committed work within the respective period to affirm the commercial potential of such potential Gas Discovery.

Article 4.8. Guidelines of PETROVIETNAM

PETROVIETNAM may, from time to time, issue detailed procedures and guidelines for the purpose of implementing provisions of this Chapter.

Chapter V
RIGHTS AND OBLIGATIONS OF THE PARTIES

Article 5.1. Contractor

5.1.1. Rights of CONTRACTOR

5.1.1.1. For the purpose of oil and gas operations, to enjoy all incentives, with their investments encouraged and guaranteed, as prescribed in this Contract, the Investment Registration Certificate, the Law on Investment, the Law on Oil and Gas and relevant legal documents of Vietnam.

5.1.1.2. To use collected specimens, information and data for conducting oil and gas activities.

5.1.1.3. To recruit employees, with priority given to Vietnamese employees.

5.1.1.4. To hire organizations and individuals to provide oil and gas services and goods serving oil and gas activities in accordance with the Law on Oil and Gas and in conformity with international oil and gas industry practices.

5.1.1.5. To be entitled to exemption from import duty and export duty to serve oil and gas activities in accordance with the law on import duty and export duty.

5.1.1.6. To own oil and gas products and other products produced under oil and gas contracts after fulfilling financial obligations in accordance with law; to sell these products together by installments and at different times without being regarded as violating the competition law.

5.1.1.7. To export and sell in Vietnam’s market oil and gas products under its/his/her ownership as agreed upon in the oil and gas contract, unless the contractor is obliged to sell such products in Vietnam’s market as specified in Clause 8, Article 59 of the Law on Oil and Gas. The contractor is not required to apply for an export license when exporting products under its/his/her ownership.

5.1.1.8. To recover costs of oil and gas activities as agreed upon in the oil and gas contract.

5.1.1.9. To access and use existing traffic systems, infrastructure facilities and oil and gas structures in accordance with law; to access and use existing infrastructure facilities and oil and gas structures to conduct oil and gas activities under a contract or an agreement signed with a unit acting as the owner or managing the operation of infrastructure facilities and oil and gas structures on the basis of ensuring the interests of the parties in accordance with law.

5.1.1.10. To purchase foreign currencies at commercial banks to contribute capital to oil and gas contracts and perform the obligation toward the State Budget in accordance with the law regulations on management of foreign exchange.

5.1.1.11. To use US Dollars to fulfill financial obligations under this Contract to ensure compliance with applicable regulations on management of foreign exchange and relevant laws.

5.1.1.12. To exercise other rights in accordance with the Law on Oil and Gas.

5.1.2. Obligations of CONTRACTOR

5.1.2.1. To comply with the laws of Vietnam.

5.1.2.2. To submit the accounting and auditing procedures for the Management Committee's consideration and escalation thereof to PETROVIETNAM for approval prior to the Management Committee’s first meeting.

5.1.2.3. To conduct oil and gas operations and other activities associated therewith, and furnish all technical aid and personnel and to advance all expenditure and committed financial commitment required for the performance of such oil and gas operations and other activities under the approved Work Programs and Budgets.

5.1.2.4. To prepare and submit to the Management Committee and PETROVIETNAM the annual Work Programs and Budgets; and execute them diligently in accordance with International Oil and Gas Industry Practice once such Work Programs and Budgets are approved.

5.1.2.5. To be held accountable for ordering, procuring, or outsourcing services, purchasing various materials, equipment, and goods; signing necessary commercial contracts for the implementation of oil and gas operations under the approved Work Program and Budget in compliance with Article 4.6 and the following principles:

5.1.2.5.1. CONTRACTOR must establish a procurement selection mechanism for service providers and procurement of goods serving oil and gas operations and put forward it to the Management Committee for review and to PETROVIETNAM for final approval. The mechanism must ensure competition, fairness, transparency, and efficiency.

5.1.2.5.2. Annually, CONTRACTOR must prepare an overall tendering plan on purchase and/or lease of services and goods and submit the same to PETROVIETNAM for approval. Division into tender packages (if any) must be based on the technical nature, ensuring completeness and an appropriate size of tender packages.

5.1.2.5.3. In respect of a contract the value of which CONTRACTOR estimates to be less than [...] US Dollar (USD...) for Oil and Gas Exploration and Appraisal Operations, and less than [...] US Dollar (USD...) for Oil and Gas Field Development, Production Operations and Decommissioning of Oil and Gas Structures [as negotiated], CONTRACTOR may award such contract, provided that the related operations are within the approved Work Program and Budget.

5.1.2.5.4. In respect of a contract the value of which CONTRACTOR estimates to be equal to or in excess of the value provided in Article 5.1.2.5.3, CONTRACTOR shall either hold tender or provide reasonable grounds proving that tendering would be disadvantageous for practical operations or for progress reasons or would adversely impact on commercial interests and approved by PETROVIETNAM. PETROVIETNAM shall consider and approve within ten (10) business days from the date of receiving the request of CONTRACTOR, or a shorter period depending on work requirements, and shall not reject unreasonably. In the case of selecting suppliers through tendering, CONTRACTOR must:

5.1.2.5.4.1. Submit to PETROVIETNAM:

5.1.2.5.4.1.1. a tendering plan (including but not limited to the name of the tender package and its price, items and budgetary value, form of contractor selection, tendering method, time‐limit for selection of contractor, form of contract, term for contract performance, list of tenderers to be invited in case of restricted tendering) for PETROVIETNAM's approval. In case of restricted tendering, CONTRACTOR shall comply with PETROVIETNAM’s request for addition or deletion of one or more individuals and/or organizations to the bidding invitation list, provided that PETROVIETNAM shall provide reasonable justification for such addition or deletion.

5.1.2.5.4.1.2. tender invitation documents (including but not limited to technical, financial, commercial requirements, and criteria for tendering assessments) for PETROVIETNAM's consideration and comments thereon (if any) prior to inviting tenders.

5.1.2.5.4.1.3. an Assessment and Proposed Tender Award Report indicating the selected person or organization (together with the tenders received) for PETROVIETNAM's consideration and approval. CONTRACTOR shall be responsible to explain or clarify any matters (if any) as requested by PETROVIETNAM in the data submitted by CONTRACTOR.

5.1.2.5.4.2. PETROVIETNAM must notify CONTRACTOR of its approval or other opinion about the overall tendering plan, the tendering plan and the tender invitation documents of CONTRACTOR, and the Assessment and Proposed Tender Award Report within fourteen (14) days from the date PETROVIETNAM receives a valid dossier, which shall not be rejected unreasonably. If CONTRACTOR does not receive PETROVIETNAM's written opinion within the aforementioned fourteen (14) days, CONTRACTOR's proposal shall be deemed to be approved by PETROVIETNAM.

5.1.2.5.5. Preferentially use Vietnamese materials, equipment and services based on a competitive basis regarding price, quality and time of delivery; CONTRACTOR must provide details of the criteria for using Vietnamese services in its tender invitation documents.

5.1.2.5.6. Provide PETROVIETNAM with a copy of the commercial contract signed in compliance with Article 5.1.2.4 within ten (10) days from the date of signing the relevant contract.

5.1.2.5.7. The aforementioned process shall be applied mutatis mutandis to supplier selection process in other cases.

5.1.2.6. To submit to the competent authority and to PETROVIETNAM an environmental impact assessment report on oil and gas operations in accordance with the laws of Vietnam.

To provide essential solutions for protection of navigation, fishing and the environment; on prevention and proper control of environmental pollution of the sea, rivers and streams and land consistent with the insurance program and the environmental, safety and occupational health operational plan approved by the Management Committee; and to advise PETROVIETNAM and other agencies concerned in accordance with instructions from PETROVIETNAM of such solutions. In the case where the necessary solutions have in fact been implemented as advised but environmental pollution nevertheless occurs, then CONTRACTOR is obliged to take all effective measures for minimizing the effect of pollution, remedy the consequences and pay appropriate compensation for such consequences in accordance with the laws of Vietnam, CONTRACTOR may use the services and resources of local, regional and international oil spill response centers in this regard.

5.1.2.7. To have title to all assets acquired for and used in oil and gas operations until such assets become the property of PETROVIETNAM in accordance with the procedure set out in Article 14.1; to retain control of all leased property brought into Vietnam in accordance with Article 14.2 and to freely remove, free of taxes, such leased property from Vietnam in accordance with Vietnamese regulations and procedures for import and export.

5.1.2.8. CONTRACTOR and suppliers of services and goods serving oil and gas operations under the Contract shall have the right to import into Vietnam in accordance with the laws of Vietnam all materials, equipment and services required for the oil and gas operations and to re-export the same or any unused portion thereof excluding materials and equipment charged to Oil and Gas Operation Costs, in accordance with the laws of Vietnam.

5.1.2.9. To have, at any time, the right of ingress to and egress from the Contract Area and to access the equipment and facilities used for the purpose of oil and gas operations, wherever located within the Contract Area.

5.1.2.10. To have access to and the right to use all available geological, geophysical, well, production, environmental and other data and information about the Contract Area held by PETROVIETNAM, except for data and information in the category of the State’s secrets which must be approved by the competent authorities.

5.1.2.11. Subject to reasonable approval from PETROVIETNAM, to have access to and the right to refer to all available geological, geophysical, well, production, environmental and other data and information held by PETROVIETNAM now or in the future relating to the areas adjacent to the Contract Area, on condition that such areas are not the subject of a contractual arrangement by PETROVIETNAM with third parties. In relation to documents of adjacent areas for which PETROVIETNAM has contractual arrangements with third parties, PETROVIETNAM will use its best endeavors to obtain such third party's consent for disclosure of the relevant data and information where possible.

5.1.2.12. To submit to PETROVIETNAM data and study reports on processing results, tests and data analyses, and original samples from the Contract Area, including but not limited to analysis documents being geological, geophysical, geochemical, drilling, Well, production, and technical design performed by CONTRACTOR or its suppliers. Within forty five (45) days from completion of each aforementioned process, test or analysis, CONTRACTOR shall deliver to PETROVIETNAM a set of original data and at least fifty percent (50%) of the original data obtained from such activities in accordance with International Oil and Gas Industry Practices and a maximum fifty percent (50%) of the remaining original data may be performed, as applicable, by CONTRACTOR outside of Vietnam, and provided further that CONTRACTOR may retain copies of such original data and possession of a maximum fifty percent (50%) of the samples as required for operational purposes and in such case PETROVIETNAM shall at all times have access to such data and samples retained by CONTRACTOR. CONTRACTOR shall provide copies of data on request by PETROVIETNAM and the cost of such copying shall be deemed recoverable Oil and Gas Operation Costs. CONTRACTOR shall deliver to PETROVIETNAM all data and samples promptly after such data and samples are no longer required for the oil and gas operations or after the part of the Contract Area respecting such data and samples is surrendered.

5.1.2.13. To open accounts, purchase foreign currencies, remit lawful income abroad, and transfer capital contributions in accordance with Articles 58 and 59 of the Law on Oil and Gas and other relevant law regulations.

5.1.2.14. To withhold and pay income tax for Vietnamese and expatriate staff, and personnel employed by CONTRACTOR in connection with the oil and gas operations in accordance with the laws of Vietnam.

5.1.2.15. To provide PETROVIETNAM with the following Reports and information:

5.1.2.15.1. Daily seismic operations report during seismic operations.

5.1.2.15.2. Daily geological, testing and drilling report during drilling operations.

5.1.2.15.3. Weekly report on the conduct of Development Operations.

5.1.2.15.4. Monthly report on oil and gas operations within seven (7) Business days following the end of each month.

5.1.2.15.5. Annual report on oil and gas operations within thirty (30) Business days following the end of each Year.

5.1.2.15.6. Overall report within thirty (30) business days following the completion of seismic, drilling, geological study, sample analysis operations; within ninety (90) business days following the completion of Oil and Gas Field Development Operations or other important operations.

5.1.2.15.7. Financial reports and statements as specified in the Accounting Procedure.

5.1.2.15.8. Reports on Oil and Gas Exploration Programs, Reports on Resources and Reserves, Appraisal Plans, Oil and Gas Field Development and Production Plans.

5.1.2.15.9. Other reports as required by the law regulations on oil and gas or upon request of the competent regulatory authority.

5.1.2.16. To advise its foreign personnel and suppliers to abide by the laws of Vietnam and local customs; and to inform such employees and suppliers of relevant provisions of this Contract which are applicable to them.

5.1.2.17. To take measures that its foreign suppliers working in Vietnam pay all applicable taxes in accordance with the laws of Vietnam. The amount of such taxes paid by CONTRACTOR or included in fees payable to suppliers under the applicable contract terms shall be deemed as Oil and Gas Operation Costs for the purposes of recovery.

5.1.2.18. If it encounters, in the course of the oil and gas operations, any abnormal material including but not limited to deposits of valuable hard minerals, to notify and deliver samples of same to PETROVIETNAM.

5.1.2.19. To facilitate at its own cost up to [...] (….) US Dollar for each Contract Year for representatives nominated by PETROVIETNAM to supervise oil and gas operations. Such costs shall be deemed as recoverable Oil and Gas Operation Costs.

5.1.2.20. To have the right, subject to the approval of competent Vietnamese authorities, to construct, install, operate and maintain pipelines, cables, production, oil and gas structures, and auxiliary facilities for oil and gas operations (including but not limited to power stations, communication, transportation, navigation and other facilities) within and outside the Contract Area and to use such works and equipment free of charge.

For traffic roads, airports, harbors, and other transportation facilities and vehicles invested and constructed by CONTRACTOR, CONTRACTOR is entitled to use and apply preferential policies as prescribed by applicable laws.

5.1.2.21. Subject to the approval of the competent Vietnamese authorities, to have the right to use existing harbors, airports, waterways, roads and other facilities in Vietnam upon payment of fees in accordance with the laws of Vietnam.

5.1.2.22. To have the right, subject to the approval of the competent Vietnamese authorities, with PETROVIETNAM's assistance, to access and make use of sea areas and land areas which are unrestricted in Vietnam for the purpose of oil and gas operations.

5.1.2.23. To have the right to remove from Vietnam data and samples of Oil and Gas, water, formation fluids and rock samples including but not limited to cuttings, cores and sidewall cores obtained from the Contract Area and other related unitized areas under Article 18.2 for examination, analysis or processing outside Vietnam, to the extent required for oil and gas operations in accordance with the laws of Vietnam.

5.1.2.24. In any case, when there is any change on information relating to any of the Contractor Parties (as listed in Annex C attached herewith), the Contractor shall notify to PETROVIETNAM in writing within sixty (60) days from the date such change is officially certified and CONTRACTOR must complete all necessary legal procedures in order to be issued with an amended Investment Registration Certificate for this Contract (where necessary) in accordance with applicable legal regulations.

Article 5.2. PETROVIETNAM

5.2.1. Rights of PETROVIETNAM

5.2.1.1. To have the right, at all reasonable times and at its own risk, to have access to the Contract Area, to check and inspect oil and gas operations including inspection of data and files relevant to the oil and gas operations and facilities used for the oil and gas operations after giving CONTRACTOR an advance written notice of the date on which such access is required and the names of the representatives to whom access is to be given, provided such access does not interfere with the performance of oil and gas operations.

5.2.1.2. To retain title, at all times, to all original data and samples, including but not limited to all geological, geophysical, geochemical, well, production, technology and other data and samples obtained from the Contract Area or compiled by CONTRACTOR as a result of the oil and gas operations as well as other interpretative and derivative data.

5.2.1.3. Subject to appropriate arrangements with CONTRACTOR, to have the right to use the assets purchased by CONTRACTOR for oil and gas operations in order to serve its own objectives, provided that such use does not interfere with oil and gas operations of CONTRACTOR.

5.2.1.4. To have title and the right during the term hereof to lift, sell or otherwise dispose of its portion of Profit Oil and Profit Gas to the host country, and to be authorized by the Government to lift, sell or otherwise dispose of Royalty Crude Oil and Royalty Natural Gas.

5.2.1.5. To perform necessary acceptance/approval during the performance of oil and gas operations as proposed by CONTRACTOR and in accordance with the Law on Oil and Gas.

5.2.1.6. To audit Oil and Gas Operation Costs and finalize accounts of Oil and Gas Operation Costs in accordance with Chapter XI.

5.2.1.7. To issue, from time to time, detailed procedures and guidance for implementation of the articles of this Contract in conformity with the provisions of this Chapter V.

5.2.2. Obligations of PETROVIETNAM

PETROVIETNAM will offer its assistance to CONTRACTOR to deal with competent Vietnamese authorities during the conduct of oil and gas operations. PETROVIETNAM shall assist CONTRACTOR, upon request by CONTRACTOR, on condition that CONTRACTOR supplies complete data, which is necessary, to:

5.2.2.1. obtain office space, lease personal accommodation, transportation and communications facilities as may be required for oil and gas operations at reasonable rates.

5.2.2.2. obtain approvals and licenses required to open, maintain and operate bank accounts in Vietnam and abroad, and to proceed with the formalities of foreign currency exchange.

5.2.2.3. proceed with the formalities of customs clearance and obtain permission to send abroad documents, data, specimens and samples for examination, analysis or processing.

5.2.2.4. obtain local facilities, services, materials, equipment and supplies (either produced by Vietnam or which are available in Vietnam) at an assured quality, competitive price and reasonable term for provision of such services; immigration and emigration visas and work permits; transportation, security protection; customs and quarantine services; medical services and rights-of-way and rights-of-use to authorized representatives, managers or employees and dependents of CONTRACTOR and suppliers; establish maritime exclusion zones around the facilities or installations for use for the oil and gas operations; and recruit Vietnamese personnel as CONTRACTOR's employees for the purposes of oil and gas operations.

Charges applicable for the use of facilities and services for the provision of materials, equipment, supplies of personnel, personal visas, permits or security protection and other rights requested by CONTRACTOR hereunder and actually delivered or rendered by PETROVIETNAM or by any Vietnamese Government authority shall be the same applicable rates which are charged to other foreign companies in Vietnam in accordance with applicable regulations of Vietnam.

5.2.2.5. Unless otherwise prescribed in Chapter XVII of this Contract, proceed with necessary formalities in order to allow CONTRACTOR to be able to export its entitlement to Oil and Gas hereunder and retain abroad revenue obtained therefrom.

5.2.2.6. Other obligations as prescribed by law regulations on oil and gas.

Expenses incurred in advance by PETROVIETNAM at CONTRACTOR's request by way of assistance as prescribed in Article 5.2.2 shall be reimbursed to PETROVIETNAM by CONTRACTOR within thirty (30) days from the date of receiving a valid file (invoice and relevant explanatory data) and shall be deemed as recoverable Oil and Gas Operation Costs.

Chapter VI
ALLOCATION OF OIL AND GAS

Article 6.1. Crude oil allocation

The amount of Net Oil Production in each Quarter shall be lifted by the Parties in accordance with the Oil Lifting Agreement established in accordance with Article 8.5 and shall be divided and allocated in the following manner:

6.1.1. Allocation for Royalty Oil

6.1.1.1. Royalty Oil shall be allocated out of Net Oil Production per incremental tranches of total Net Oil Production in each taxable period calculated by reference to the average daily rate of Net Oil Production from the entire Contract Area, ascertained as follows:

[In accordance with the bidding results with respect to the fundamental economic, technical conditions approved by the Prime Minister]

6.1.1.2. Subject to Article 6.1.1.3, each Contractor Party shall:

6.1.1.2.1. be entitled to lift, in accordance with the Oil Lifting Agreement, its share of estimated Royalty Oil in proportion to its Participating Interest during each Quarter.

6.1.1.2.2. pay retrospectively, in accordance with the royalty regulations, provisional Royalty received from monthly Crude Oil on a cargo by cargo basis at the rates as specified in Article 6.1.1.1 in respect of the cargo in question based on the prices received at, or netted back to, the Point of Delivery by that Party during the relevant month as a result of sales or other disposals of Crude Oil obtained in accordance with this Contract.

6.1.1.2.3. pay retrospectively, in accordance with the royalty regulations, final Royalty actually received from Crude Oil based on the price received at, or netted back to, the Point of Delivery by that Party during the Quarter with appropriate reconciliation on a cargo by cargo basis for its share of Royalty Oil in proportion to its Participating Interest lifted and sold or otherwise disposed of hereunder Crude Oil obtained in accordance with this Contract.

6.1.1.3. The Government may, by notice in writing exercised through PETROVIETNAM and given to CONTRACTOR not less than three (03) months prior to the commencement of each Year, elect to lift and take in kind at the Point of Delivery all or part of the Royalty Oil which is estimated to be available for lifting during that Year based on the Production Schedule for that Year approved by PETROVIETNAM. The Royalty Oil so specified shall be lifted by the Government in each Quarter of that Year in accordance with the Oil Lifting Agreement. If Royalty Oil is delivered in kind to the Government, CONTRACTOR shall have no liability to pay Royalty in respect of that Royalty Oil.

6.1.1.4. If the Government exercises its election under Article 6.1.1.3, PETROVIETNAM in its role as representative of the Government may request and enter into an agreement with CONTRACTOR or any Foreign Party, whereby CONTRACTOR or such Contractor Party shall either (i) lift and sell on PETROVIETNAM's behalf as agent or (ii) purchase as principal client and lift all or any part of the Government’s entitlement to Royalty Oil in kind at a price to be agreed and in accordance with the customary and prevailing terms and conditions applied to the agent or purchaser.

6.1.2. Allocation for Cost Recovery Oil

6.1.2.1. Cost Recovery Oil shall be allocated out of Net Oil Production for cost recovery by CONTRACTOR of Oil and Gas Operation Costs (without interest) during each Quarter provided that in no Quarter shall the amount allocated to Cost Recovery Oil exceed [...] percent (...%) Net Oil Production in such Quarter. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract].

6.1.2.2. Subject to Articles 6.1.2.1 and 6.1.2.4, each Contractor Party shall be entitled to lift in each Quarter its share of estimated Cost Recovery Oil in accordance with the Oil Lifting Agreement and recover its proportionate share of Oil and Gas Operation Costs paid or expressly provided for under this Contract up to and including that Quarter without interest from the sale or other disposal of its share of Cost Recovery Oil actually lifted under the terms of the Oil Lifting Agreement during that Quarter.

6.1.2.3. Oil and Gas Operation Costs shall be recovered from the applicable Cost Recovery Oil on a first-in-first-out basis. Oil and Gas Operation Costs which are not recovered in a Quarter may be carried forward to the next succeeding Quarters without interest until fully recovered or the termination of the Contract, whichever occurs earlier.

6.1.2.4. The Oil and Gas Operation Costs accounting books shall be revised in each Quarter after the applicable value of the Market Price actually received is finally determined and appropriate adjustments are made for such Quarter.

6.1.3. Allocation for Profit Oil

6.1.3.1. After allocation of Royalty Oil and Cost Recovery Oil, the remainder of Net Oil Production shall be regarded as Profit Oil and shall be divided between PETROVIETNAM and CONTRACTOR as follows:

[In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

6.1.3.2. Each Party shall be entitled to lift, in accordance with the Oil Lifting Agreement, its share of estimated Profit Oil during a Quarter.

6.1.4. Allocation Method

The allocation of Royalty Oil, Cost Recovery Oil and Profit Oil out of Net Oil Production shall be made during each Quarter and shall be calculated on a preliminary basis at the time of lifting, using the estimated quantity of Net Oil Production available for lifting for that Quarter based on the approved Production Schedule for that Quarter and adjusted on a final basis after the end of the Year.

Article 6.2. Natural gas allocation

6.2.1. Allocation for Royalty Gas

6.2.1.1. Royalty Gas shall be allocated out of Net Gas Production per incremental tranches of total production in each taxable period calculated by reference to the average daily rate of Net Gas Production from the entire Contract Area, ascertained as follows:

[In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

6.2.1.2. It is agreed by the Parties that the provisions of Article 6.1.1.2 and Article 6.1.1.3 shall apply mutatis mutandis to Natural Gas.

For the avoidance of doubt, CONTRACTOR may utilize Natural Gas, at no Royalty burdens, for the conduct of the oil and gas operations in accordance with International Oil and Gas Industry Practices, including but not limited to:

6.2.1.2.1. Use in facilities for production and processing and in assisting works.

6.2.1.2.2. Facilitate or enhance crude oil production.

6.2.1.2.3. Effect pressure maintenance by secondary or tertiary recovery processes.

6.2.1.2.4. Process in order to extract crude oil.

6.2.1.2.5. Recycle; or

6.2.1.2.6. Flare, in the absence of other economical solutions, subject to approval of PETROVIETNAM in the case of Associated Gas. In emergency cases, CONTRACTOR may flare Associated Gas but immediately thereafter must report such decision to flare to PETROVIETNAM.

6.2.2. Allocation for Cost Recovery Gas

6.2.2.1. Cost Recovery Gas shall be allocated out of Net Gas Production for cost recovery by CONTRACTOR of Oil and Gas Operation Costs (without interest) during each Quarter provided that in no Quarter shall the amount allocated to Cost Recovery Gas exceed [...] percent (...%) Net Gas Production in such Quarter. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract].

6.2.2.2. It is agreed by the Parties that the provisions of Articles 6.1.2.2, 6.1.2.3 and 6.1.2.4 shall apply mutatis mutandis to Natural Gas.

6.2.3. Allocation for Profit Gas

6.2.3.1. After allocation of Royalty Gas and Cost Recovery Gas, the remainder of Net Gas Production shall be regarded as Profit Gas and shall be divided between PETROVIETNAM and CONTRACTOR as follows:

[In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

6.2.3.2. It is agreed by the Parties that the provisions of Article 6.1.3.2 shall apply mutatis mutandis to Natural Gas.

6.2.4. Allocation

The allocation of Royalty Gas, Cost Recovery Gas and Profit Gas out of Net Gas Production shall be made during each Quarter and shall be calculated on a preliminary basis at the time of gas lifting, using the estimated quantity of Net Gas Production available for lifting and consuming for that Quarter based on the approved Production Schedule for that Quarter and adjusted on a final basis after the end of that Year.

Chapter VII
TAXES, FEES AND CHARGES

Article 7.1. Taxes, charges and fees

The Contractor Parties shall be the entities liable to pay tax in accordance with this Contract and must comply with all regulations on tax applicable to organizations and individuals conducting oil and gas operations in Vietnam, and shall be responsible for completing returns declaring tax, paying tax, and keeping books and relevant reports. The provisional tax assessment, tax payment, currency of tax payment and tax finalization shall be in accordance with prevailing Vietnamese tax laws.

Article 7.2. Royalties

Each Contractor Party shall be liable to pay its royalties tax in accordance with the provisions in Articles 6.1.1 and 6.2.1.

Article 7.3. Corporate income tax

Each Contractor Party shall be liable to pay its corporate income tax at the rate of [...] percent (...%) on taxable income earned in accordance with the laws of Vietnam on tax. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

Where each Contractor Party shall be responsible for paying its corporate income tax at the rate of [….] percent (...%) as prescribed in this Oil and Gas Contract for the expenses allowable for recovery that the Contractor Party receives from another contractor but does not pay in full or in part the respective oil and gas operation costs associated with the received benefits, unless otherwise agreed.

Article 7.4. Export duty

Each Contractor Party shall, in accordance with the applicable law, pay export duty on the net Crude Oil lifted and exported outside Vietnam, except for Crude Oil for Royalty payment, at the tax rate of [...] percent (...%).

[In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

Each Contractor Party shall, in accordance with the applicable law, pay export duty on the portion of net Natural Gas lifted and exported outside Vietnam, except for Natural Gas for Royalty payment, at the tax rate of [...] percent (...%). [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

Such taxes are non-recoverable but deductible for the purpose of determining the corporate income tax in accordance with the applicable laws of Vietnam and international treaties to which Vietnam is a member.

Article 7.5. Capital gains tax

Each Contractor Party shall pay corporate income tax on income generated from an assignment in accordance with Article 12.2 and other relevant charges as prescribed in the applicable laws of Vietnam and international treaties to which Vietnam is a member.

Article 7.6. Value-added tax

Each Contractor Party shall pay Value Added Tax (VAT) in accordance with the applicable VAT law of Vietnam and international treaties to which Vietnam is a member.

Article 7.7. Environmental protection fee

Each Contractor Party shall pay charges for environmental protection when producing Crude Oil, Natural Gas in accordance with the applicable laws of Vietnam and international treaties to which Vietnam is a member. Such charges for environmental protection shall be deemed as recoverable oil and gas operation costs.

Article 7.8. Windfall tax on profit oil

Each Contractor Party shall pay a surcharge on its share of Profit Oil when Crude Oil prices increase, in accordance with the laws of Vietnam effective as at the time such income arises and international treaties to which Vietnam is a member. Such surcharge is non-recoverable but deductible for the purpose of determining the corporate income tax in accordance with the applicable laws of Vietnam and international treaties to which Vietnam is a member.

Article 7.9. Other taxes, charges and fees

Each Contractor Party shall pay other types of taxes, land lease tax and other fees and charges in accordance with the applicable laws of Vietnam and international treaties to which Vietnam is a member. Neither Contractor Party is required to pay rental for lease of water surface. Payables under this Article if not deemed recoverable costs shall be deductible for the purpose of determining the corporate income tax in accordance with the applicable laws of Vietnam and international treaties to which Vietnam is a member.

Article 7.10. Applicable benefits upon legal changes

If the tax laws of Vietnam provide for more favorable tax rates or treatment for the oil and gas industry, CONTRACTOR shall, with the assistance of PETROVIETNAM and approval from the competent authorities, be subject to application of such favorable tax rates and treatment.

Chapter VIII
VALUATION, MEASUREMENT AND HANDLING OF OIL AND GAS

Article 8.1. Valuation of Crude Oil

8.1.1. The value of Crude Oil for all purposes under this Contract in any Quarter shall be the Market Price. All Contractor Parties shall use their best efforts to obtain the highest possible Market Price. The Market Price shall be denominated in US Dollar and calculated in each Quarter as follows:

8.1.1.1. For all Crude Oil sales pursuant to Arm's Length Transactions, the Market Price shall be the actual price in US Dollar received by each Party during that Quarter from each sale with delivery on the basis of Free on Board (FOB) or Free into Pipeline (FIP) at Point of Delivery or, where sold on any other basis, as netted back to the equivalent FOB/FIP at Point of Delivery.

8.1.1.2. For Crude Oil sales pursuant to a non-Arm's Length Transaction or in relation to Crude Oil retained by a Contractor Party, such Contractor Party shall, unless otherwise agreed, enter into discussions with PETROVIETNAM for the purpose of agreeing the basis for calculating the F.O.B. Market Price in US Dollar for each sale of Crude Oil to be sold or exported during that Quarter prior to the commencement of the Quarter in question. The Parties shall determine the Market Price in US Dollar in accordance with the following principles:

8.1.1.2.1. by reference to the arithmetic average price quoted over the Bill of Lading Date Spread in the Oil Publication for the F.O.B. sale of the relevant Crude Oil produced from the Contract Area with appropriate adjustments or if the Parties in question do not agree on the Oil Publication, or if such Oil Publication is agreed but no such price is quoted;

8.1.1.2.2. By reference to the arithmetic average of the current market F.O.B. selling price quoted over the Bill of Lading Date Spread during that Quarter for a representative crude or a basket of two (2) or three (3) representative crudes reported in Platt's Crude Oil Marketwire which crude or crudes at the time of calculation are actively traded in the Asia Pacific region and are of nearest comparable grade, gravity, quantity, and quality to the Crude Oil and adjusted for differences in location, quality, terminal facilities at port of loading, credit/capacity terms, yield and other pertinent factors that affect costs to buyers, after appropriate adjustments are made for the costs and expenses set out in Article 8.1.1.1, but in connection with such determination of Market Price no account shall be taken of government to government sales or national oil company to national oil company sales or barter sales. The Contractor Party shall notify PETROVIETNAM in writing of the valuations of Crude Oil in accordance with this Article 8.1.1.2.2.

8.1.1.3. For purposes of provisionally determining a weighted average Market Price in US Dollar required under Article 8.1.3, the weighted average Market Price shall be calculated by determining the average of the FOB equivalent selling prices for all cargoes lifted from the Point of Delivery for the Quarter immediately preceding the Quarter ascertained in accordance with Article 8.1.1.

8.1.1.4. In the case where a Contractor Party has sold or otherwise disposed of Crude Oil in a non-Arm's Length Transaction to an Affiliate, it shall be deemed to have actually received the Market Price for that Crude Oil thirty (30) days after the Bill of Lading Date.

8.1.1.5. For the purposes of Article 8.1.1:

8.1.1.5.1. “Arm's Length Transaction” means a sale on the Vietnamese market and on the international market in freely convertible currency between a willing and unrelated seller and buyer, but excluding a sale by a Party to its Affiliate, sales between governments or government owned entities, transactions involving exchange or barter, and generally sales which are not at free international market prices.

8.1.1.5.2. “Bill of Lading Date” means the date appearing on the face of the bill of lading issued for a shipment of Crude Oil from the Point of Delivery.

8.1.1.5.3. “Bill of Lading Date Spread” means the period from ten (10) days prior to the Bill of Lading Date to ten (10) days after the Bill of Lading Date.

8.1.1.5.4. “FOB” has the meaning given to it in INCOTERMS 2020 and its amendments, if any.

8.1.1.5.5. “Oil Publication” means an oil industry publication or wire service generally accepted internationally and which contains reports of the current market FOB, selling price mutually agreed and accepted by the Parties in question.

8.1.2. In the case where after two (02) requests from PETROVIETNAM, a Contractor Party consistently and significantly undersells its allocated share of Crude Oil hereunder (the “Underselling Party”), PETROVIETNAM may request discussions with the Underselling Party to agree on appropriate revisions to the applicable Market Price for the applicable period (being no longer than six (6) months before the request is made), taking into consideration the actual net price received F.O.B. by PETROVIETNAM for Crude Oil sales made by PETROVIETNAM from the Contract Area for that period, the weighted average Market Price actually received by the other Parties for that period and the market conditions prevailing at the time. If PETROVIETNAM and the Underselling Party cannot reach agreement on the appropriate revisions to be made to the applicable Market Price for the applicable period within forty-five (45) days from the date of receiving the written notice given by PETROVIETNAM to the Underselling Party, the matter shall be referred to an Expert hereunder for resolution. The Expert shall make the determination on the value of the Market Price for the applicable period in accordance with the principles contained in the preceding Article 8.1.1.

8.1.3. Pending the determination of the value of the Market Price of Crude Oil in accordance with the preceding Article 8.1.2 for a given period, the weighted average Market Price in US Dollar received by CONTRACTOR and PETROVIETNAM (excluding the Underselling Party) for the applicable period shall be provisionally applied to the Underselling Party until the applicable Market Price for that period is finally determined. Any adjustment to such provisional Market Price and payment, if necessary, shall be made within thirty (30) days after the applicable Market Price is finally determined.

8.1.4. In the case where PETROVIETNAM does not accept a Contractor Party’s Market Price valuations of Crude Oil under Article 8.1.1 and PETROVIETNAM and such Contractor Party cannot reach agreement on such valuations within forty-five (45) days from the date of receiving the written notice by PETROVIETNAM of such Contractor Party's valuations, the matter shall be referred to an Expert hereunder for resolution. The Expert shall make the determination in accordance with the principles contained in Article 8.1.1.

8.1.5. Each Contractor Party shall promptly advise PETROVIETNAM in writing in accordance with the Accounting Procedure of full details of all sales of Crude Oil lifted in accordance with the Oil Lifting Agreement.

Article 8.2. Valuation of natural gas and associated gas

8.2.1. The price of Natural Gas shall be determined on the basis of an agreed price between the seller and purchaser (including but not limited to the price of condensate created from the gas), consistent with the laws of Vietnam, taking into account the time of price calculation, the market, quality, quantity of gas and other relevant factors.

8.2.2. Associated Gas shall be valued in accordance with provisions of laws and customs of Vietnam.

Article 8.3. Measurement of oil and gas

8.3.1. For all measurement of Oil and Gas required for the purposes of this Contract, CONTRACTOR shall employ appropriate methods and equipment in accordance with International Oil and Gas Industry Practice. PETROVIETNAM may appoint a permanent representative who shall have the right to observe such measurements and to examine and test, at PETROVIETNAM’s sole risk and expense, whatever equipment may be used therefor. Such representative shall comply with all necessary and usual safeguards for the prevention of fire and other accidents and shall make all examinations and tests at such times and in such manners as will cause the minimum interference with the oil and gas operations.

8.3.2. If upon examination or testing, any equipment shall be found to be out of order, CONTRACTOR shall cause the same to be put in order within a reasonable time, and if upon such examination or testing, any error discovered in any such equipment, shall be deemed to have existed for a period of seven (7) days prior to the discovery thereof, or since the date of the last examination or testing of such equipment, whichever period is shorter, and all consequential adjustments shall be made to any payments or deliveries of Oil and Gas affected by such error.

8.3.3. If any measuring equipment needs to be adjusted, repaired or replaced, then CONTRACTOR shall give prior reasonable notice in writing to the authorized persons representing PETROVIETNAM and the Government to be present during such adjustment, repair or replacement.

Article 8.4. Production schedules

8.4.1. The annual Production Schedule submitted to the Management Committee for adoption and to PETROVIETNAM for final approval shall comprise but not be limited to: CONTRACTOR's estimated Production Schedule showing the expected production, expressed in Barrels per day or Cubic Meters per day, the production and grade of oil and gas of each type during the relevant year in accordance with the maximum efficient rate for production of each Commercial Discovery determined in the Oil and Gas Field Development Plan and in accordance with International Oil and Gas Industry Practices.

8.4.2. CONTRACTOR shall use reasonable efforts to ensure that the quantity and level of each grade of Oil and Gas in any Year shall approximate, as closely as possible, to the quantities set for such period in the approved Production Schedule as prescribed in Article 8.4.1.

8.4.3. Following the commencement of regular lifting, CONTRACTOR shall prepare and furnish to PETROVIETNAM not later than forty-five (45) days prior to the beginning of each Quarter, a quarterly Production Schedule showing:

8.4.3.1. Net Oil Production and Net Gas Production during the ensuing Quarter, expressed in Barrels per day or Cubic Meters per day and level of each grade pursuant to the approved Work Program and Budget and approved Production Schedule.

8.4.3.2. Estimate of the quantity, grades and rates of Net Oil Production and Net Gas Production which will be available for lifting and/or sale from the Contract Area, including Royalty Oil, Cost Recovery Oil, Profit Oil and Royalty Gas, Cost Recovery Gas and Profit Gas.

Article 8.5. Oil lifting and gas consumption

8.5.1. Principles for oil lifting and gas consumption

8.5.1.1. Subject to the method of allocation specified in Chapter VI, PETROVIETNAM, each Contractor Party and the Government (if the Government elects to take and lift Royalty Oil in kind) shall have the right to lift an aggregate amount of Crude Oil for every cargo lifted by it consisting of:

8.5.1.1.1. in the case of PETROVIETNAM and each Contractor Party, Royalty Oil (if applicable), Cost Recovery Oil (if applicable) and the divided portion of Profit Oil.

8.5.1.1.2. in the case of the Government, Royalty Oil if taken in kind.

8.5.1.2. Each Party's entitlement in the sale of Natural Gas allocated in accordance with Article 6.2 shall be delivered in accordance with the Gas Purchase and Sale Agreement.

8.5.1.3. The Parties' nomination of Crude Oil shall be adjusted at the end of each Quarter by increasing the nomination of an Underlifter at the commencement of the next Quarter by the amount of its underlifting at the end of the preceding Quarter and decreasing the nomination of an Overlifter at the commencement of the next Quarter by the amount of the overlifting at the end of the preceding Quarter in accordance with the Oil Lifting Agreement.

For purposes of this Article 8.5.1.3, a Party which during the Quarter lifted less than its entitlement from the Contract Area shall be an “Underlifter” and a Party which during the Quarter lifted in excess of its entitlement shall be an “Overlifter.”

8.5.1.4. Each lifting of Crude Oil shall be deemed to take place at the Bill of Lading Date as defined in Article 8.1.1.5.2.

8.5.2. Within twenty-one (21) days after the end of each Quarter, the Operator shall prepare and furnish to PETROVIETNAM and the Contractor Parties a report setting out the amount, type and grade of Crude Oil or quantity of Natural Gas produced from the Contract Area, the entitlements of each Contractor Party and PETROVIETNAM, the liftings made by the Parties by reference to the relevant Bill of Lading Date as defined in Article 8.1.1.5.2 or quantity of Natural Gas produced, which are delivered from the Contract Area to each Contractor Party and PETROVIETNAM, and the resulting overlift or underlift position of each Contractor Party and PETROVIETNAM at the commencement and at the end of the Quarter.

8.5.3. The Management Committee shall review and adopt an Oil Lifting Agreement and/or Purchase and Sale Agreement for natural gas or coal gas (if applicable) as the case may be, but in all cases the agreements must be approved no later than ninety (90) days for Crude Oil or one hundred and eighty (180) days for natural gas and coal gas prior to the date of commissioning the field or mine for operation as proposed in the approved Oil and Gas Field Development Plan.

The Oil Lifting Agreement shall be purposed to avoid interruption to the production of Oil and Gas and to the desirability of each tankship sailing from the loading facilities with an optimum standard cargo range as determined by the Operator of Crude Oil in a timely manner in order to avoid production curtailments due to constraints on Crude Oil storage and minimize demurrage incurred. The Oil Lifting Agreement shall provide for matters such as tanker scheduling, terminating, nominations, procedures and a detailed method for balancing out any final overlift/underlift positions which may occur consistent with the terms of this Article 8.5.

8.5.4. Basic contents of the Oil Lifting Agreement or Natural Gas Purchase and Sale Agreement

8.5.4.1. The Oil Lifting Agreement or Natural Gas Purchase and Sale Agreement shall also provide that:

8.5.4.1.1. the Operator shall be the coordinator for lifting oil and selling/consuming gas.

8.5.4.1.2. the Operator shall establish minimum operational safety and environmental standards for lifting oil or selling/consuming gas in accordance with the International Oil and Gas Industry Practices.

8.5.4.1.3. PETROVIETNAM and each Contractor Party and the Government (if the Government elects to take and lift Royalty Oil in kind) shall be entitled and obliged to take and receive at the Point of Delivery and separately or jointly dispose of its/their share of Crude Oil in kind.

8.5.4.1.4. title to and risk in Oil and Gas shall be passed to the Party entitled to receive such Oil and Gas at the Point of Delivery.

8.5.4.1.5. The costs related to the sale of Crude Oil and Natural Gas shall be borne by the Contractor Parties or the Parties, as the case may be, and not be deemed recoverable costs under this Contract but deductible for the purpose of determining the corporate income tax in accordance with the applicable laws of Vietnam and international treaties to which Vietnam is a member.

8.5.4.2. When necessary and upon request by any Party, the Management Committee shall review, revise and supplement the provisions of the Oil Lifting Agreement or Gas Purchase and Sale Agreement.

Chapter IX

BONUSES AND DATA FEES

Article 9.1. Bonuses

9.1.1. CONTRACTOR shall pay to PETROVIETNAM a sum of money being a signature bonus of [...] US Dollar (…USD) within thirty (30) days after the Effective Date of this Contract. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

9.1.2. CONTRACTOR shall pay to PETROVIETNAM the sum of [...] US Dollar (USD…) within thirty (30) days after the date on which CONTRACTOR declares the first Commercial Discovery in the Contract Area. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

9.1.3. CONTRACTOR shall pay to PETROVIETNAM the sum of [...] US Dollar (USD…) within thirty (30) days after the first commercial production date within the Contract Area. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

9.1.4. CONTRACTOR shall pay to PETROVIETNAM a lump sum amount of bonus for the various levels of increased production (if applicable) within thirty (30) days after daily production from the Contract Area initially reaches the average level in the equivalent production levels set out in the following table after a consecutive period of thirty (30) days applicable respectively to Crude Oil and Natural Gas:

[In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

9.1.4.1. Applicable to Crude Oil:

9.1.4.2. Applicable to Natural Gas/Coal Gas

9.1.5. Bonuses paid to PETROVIETNAM as prescribed in Article 9.1 shall not be deemed recoverable costs, and not be tax deductible for the purpose of corporate income tax assessment in accordance with the applicable laws of Vietnam.

Article 9.2. Data fees

Data fees (if applicable): CONTRACTOR shall pay PETROVIETNAM a data fee of [….] US Dollar (USD…) for access to all data and information relating to the Contract Area and held by PETROVIETNAM and shall have the right to use such data and information during the term of this Contract provided that ownership of such data remains vested in PETROVIETNAM. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

Data fees paid to PETROVIETNAM as prescribed in Article 9.2 shall not be deemed recoverable costs, and not be tax deductible for the purpose of corporate income tax assessment in accordance with the applicable laws of Vietnam.

Chapter X
TRAINING, EMPLOYMENT AND SERVICES

Article 10.1. Training

10.1.1. CONTRACTOR shall commit to pay PETROVIETNAM the amount of [...] US Dollar (USD...) per Contract Year prior to the first Commercial Discovery and the amount of [...] US Dollar (USD...) per Contract Year thereafter for the purpose of training PETROVIETNAM’s managerial staff and personnel. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

10.1.2. Payment of the training expenditure shall be made by CONTRACTOR to training institutions agreed by the Parties or designated by PETROVIETNAM. Upon request of PETROVIETNAM, CONTRACTOR shall pay PETROVIETNAM or shall carry forward to the next Contract Year any remaining balance of the annual training expenditure commitment. Any training expenditure in a Contract Year in excess of the amount set forth in Article 10.1.1 shall be carried forward to and shall be deducted from the commitment defined in Article 10.1.1 for the following Contract Years).

10.1.3. The CONTRACTOR shall commit to pay PETROVIETNAM an amount of money equivalent to […] percent (…%) of the annual Petroleum Operation Costs from the first oil/gas production point of time or the amount of [...] US Dollars (USD…) for each Contract Year for the Oil and Gas Scientific Research and Technology Development Fund. [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract]

10.1.4. Amounts paid to PETROVIETNAM as prescribed Articles 10.1.1 and Article 10.1.3 shall not be deemed recoverable costs, and not be tax deductible for the purpose of corporate income tax assessment in accordance with the applicable laws of Vietnam.

Article 10.2. Employment and Services

10.2.1. In the Annual Work Program and Budget, CONTRACTOR shall prepare an employment program including but not limited to recruitment of local employees, training for Vietnamese personnel, schedule and rates of replacing foreign employees by local employees.

CONTRACTOR must implement the staff recruitment plan in accordance with the approved plan.

10.2.2. CONTRACTOR shall make priority use of services of Vietnamese companies in the conduct of oil and gas operations on the principle that such services are competitive in terms of price, quality, schedule and availability.

Chapter XI
ACCOUNTING, AUDITS AND ACCOUNT-FINALIZATION

Article 11.1. Accounting

11.1.1. CONTRACTOR, through the Operator, shall comply with the Vietnamese Accounting Standards and Vietnamese rules and regulations on accounting.

11.1.2. CONTRACTOR, through the Operator, shall record all Oil and Gas Operation Costs, Crude Oil and/or Natural Gas production received by the Parties and revenue of each Party accordingly in accordance with the Vietnamese Accounting Standards and the laws of Vietnam on accounting, and in compliance with International Oil and Gas Industry Practices.

Article 11.2. Audit

11.2.1. The Management Committee shall select an independent auditing company legally operating in Vietnam to conduct audits of annual financial reports and statements of CONTRACTOR in accordance with the laws of Vietnam and International Oil and Gas Industry Practices. The costs paid for such independent auditing service shall be borne by CONTRACTOR and shall be deemed Oil and Gas Operation Costs for the purpose of recovery.

11.2.2.

11.2.2.1. PETROVIETNAM has the right at any time, on condition that PETROVIETNAM bears the costs and at its own risk, to provide at least thirty (30) days in advance a written notice to CONTRACTOR in order to access and audit the books and take copies of original data and source vouchers of CONTRACTOR by their internal auditors or third party auditors; provided, however, that such an audit shall not be conducted more than once (01) a (01) Year. Such audit must be completed within twelve (12) months of the foregoing notice.

11.2.2.2. Any expenses in the Financial Statements which are not accepted by the auditors of PETROVIETNAM at the time of auditing will be provided in writing (audit conclusion) within sixty (60) days after the audit completion with specified reasons.

If the audit conclusion is not issued within sixty (60) days after the audit, the books and Financial Statements of CONTRACTOR shall be deemed to be correct for all purposes.

11.2.2.3. If CONTRACTOR does not provide objections to the items in the audit conclusion within sixty (60) days from the date of its receipt, then the audit conclusion of PETROVIETNAM shall be final and binding on the Parties. If within the sixty (60) days from the date of receiving the audit result, CONTRACTOR does provide objections, then PETROVIETNAM and CONTRACTOR shall attempt to amicably settle the matter and reach a mutual agreement. If within one hundred and eighty (180) days from the date of receipt of the written objections referred to above, the Parties fail to reach an agreement, then such dispute shall be resolved by arbitration in accordance with Article 15.1.

11.2.2.4. For the avoidance of doubt, any expenses excluded by PETROVIETNAM or pending in the audit conclusion shall be non- recoverable until the disputes are settled in accordance with Article 11.2.2.3.

Article 11.3. Account-finalization of Oil and Gas Operation Costs

11.3.1. The account-finalization of Oil and Gas Operation Costs must ensure that the costs are expressed in a truthful, complete, reasonable and valid manner in accordance with the laws of Vietnam.

11.3.2. CONTRACTOR shall finalize accounts of Oil and Gas Operation Costs upon completion of the work and each relevant phase of the Contract or each appropriate component phase in accordance with the Contract or approved Oil and Gas Field Development Plan upon completion or termination of the Contract, in accordance with law regulations on oil and gas.

11.3.3. Based on the annual financial audit results and/or the audit results upon completion of each relevant phase of the Contract or each appropriate component phase in accordance with the Contract or upon termination of the Contract; relevant approved Work Programs and Budgets; and/or Oil and Gas Field Development Plans and adjusted Oil and Gas Field Development Plans (if any), PETROVIETNAM shall approve the Account-Finalization Statement prepared and submitted by CONTRACTOR in accordance with the Contract and the laws of Vietnam on oil and gas.

Chapter XII

PARTICIPATION OF PETROVIETNAM AND ASSIGNMENT

Article 12.1. Participation of PETROVIETNAM

12.1.1. Within ninety (90) days of CONTRACTOR's declaration of the first Commercial Discovery, PETROVIETNAM has the option to hold a Participating Interest of up to [...] percent (...%) of Participating Interest in the total rights and obligations of CONTRACTOR under this Contract (hereinafter referred to as PETROVIETNAM's Participating Interest). Such option shall be extinguished if PETROVIETNAM does not give CONTRACTOR a written notice of intention to participate within the aforementioned one hundred and eighty (180) days from the date on which CONTRACTOR declares the first Commercial Discovery (hereinafter referred to as the Commencement Date), unless otherwise agreed upon. Subject to the decision of PETROVIETNAM, PETROVIETNAM's Participating Interest may be managed and directly implemented by PETROVIETNAM or by one of its Affiliates.

In the case where PETROVIETNAM exercises its option, then PETROVIETNAM or its Affiliate as the case may be and the Parties shall conduct the necessary procedures in order to amend the Investment Registration Certificate and the Contractor Parties shall consider (accordingly) and adopt a Joint Operating Agreement or an addendum to the Joint Operating Agreement, as the case may be.

12.1.2. PETROVIETNAM or its Affiliate’s share of all expenditure corresponding to the participation of PETROVIETNAM or its Affiliate, incurred by CONTRACTOR during performance of this Contract from the Effective Date up to the Commencement Date shall be borne by CONTRACTOR. If PETROVIETNAM gives the notice of intention to participate as prescribed in Article 12.1.1, CONTRACTOR shall be reimbursed of all such expenditure paid in advance in accordance with the following provisions:

12.1.2.1. As to PETROVIETNAM or its Affiliate’s share of all expenditure to be borne by CONTRACTOR under this Contract (excluding the bonuses and data fees paid under Chapter IX and the training costs under Chapter X) from the Effective Date up to the Commencement Date, CONTRACTOR has the right to take [...] percent (…%) of the share of expenditure of PETROVIETNAM or its Affiliate in Cost Recovery Oil and/or Cost Recovery Gas belonging to CONTRACTOR until CONTRACTOR has fully recovered without interest the above share of expenditure;

12.1.2.2. As to PETROVIETNAM or its Affiliate’s share of all expenditure to be borne by CONTRACTOR under this Contract (excluding the bonuses and data fees paid under Chapter IX and the training costs under Chapter X) from the Commencement Date up to and including the date of PETROVIETNAM's notice of intention to participate, PETROVIETNAM or its Affiliate, as the case may be, shall make a lump sum payment to the Operator of all the above expenditure within thirty (30) days from the date on which the Operator on behalf of CONTRACTOR sends a request for payment of money;

12.1.2.3. As to PETROVIETNAM or its Affiliate’s share of all expenditure to be borne by CONTRACTOR under this Contract (excluding the bonuses and data fees paid under Chapter IX and the training costs under Chapter X and costs for establishing the fund for scientific research and oil and gas technique development under Chapter X) after the date of PETROVIETNAM's notice of intention to participate, PETROVIETNAM or its Affiliate shall make payment therefor, on a current cash call basis, in accordance with the provisions of the Joint Operating Agreement;

12.1.2.4. The Parties undertake that PETROVIETNAM shall have no financial obligations under the provisions of this Chapter if there is no declaration of Commercial Discovery in the Contract Area.

12.1.3. In the case where PETROVIETNAM’s Affiliate participates in the consortium of contractors from the execution of the Contract and other Contractor Party/Parties in such consortium is/are responsible to bear, wholly or partially, the capital burden for PETROVIETNAM’s Affiliate, the portion of participation, portion and method of capital burden bearing, method of cost recovery for the capital burden borne, and participation of PETROVIETNAM as prescribed in Article 12.1 shall be agreed upon by the Parties to the Contract.

Article 12.2. Assignment

12.2.1. Each Contractor Party shall have the right to sell, assign, transfer, convey or otherwise dispose of all or any part of its rights, interests and obligations under this Contract to any of its Affiliates with a written notice to PETROVIETNAM. The above sale, transfer, conveyance or other disposal shall require approval by the Prime Minister and shall take effect in accordance with the amended Investment Registration Certificate.

12.2.2. Subject to the pre-emptive right first of PETROVIETNAM in accordance with the Oil and Gas Law, and then of other Contractor Parties under the Joint Operating Agreement based on the assignment conditions as agreed between the Contractor Party who has intention of assignment and the third parties) (the potential assignees must not be Affiliate of the Assignor), each Contractor Party shall have the right to sell, assign, transfer, convey or otherwise dispose of all or any part of its rights, interests and obligations under this Contract to third parties) with approval of the Prime Minister. PETROVIETNAM shall send a written notice to the Contractor Party who has intention of assignment on the decision regarding the pre-emptive right first within one hundred and twenty (120) days, or another period of time as agreed between relevant parties, from the date of receiving the notice of assignment intention and executed assignment agreement by such Contractor Party and the third parties. If the Contractor Party who has intention of assignment receives no notice from PETROVIETNAM within one hundred and twenty (120) days as aforementioned, or another period of time as before agreed, it is deemed that PETROVIETNAM has waived its pre-emptive right first.

12.2.3. In accordance with Articles 12.2.1 and 12.2.2, the potential Assignee must:

12.2.3.1. have adequate technical and financial capability in order to discharge its obligations in accordance with this Contract;

12.2.3.2. agree to and comply with the Participating Interest which is assigned and with all clauses and provisions of this Contract; and

12.2.3.3. at the request of and subject to the consent from PETROVIETNAM, provide PETROVIETNAM with a guarantee from the parent company or credit institutions corresponding with the Participating Interest of the assignee.

12.2.4. For the purpose of Article 12.2, with respect to change in ownership or change in control of a Contractor Party (except for cases of restructuring, internal financial arrangement of such Contractor Party or consolidation of the Contractor Party’s parent company), the Concerned Contractor Party shall follow the procedures for declaring and paying income tax arising from the change in control (if any) in accordance with the laws of Vietnam and international treaties to which Vietnam is a member.

Chapter XIII
PAYMENTS, CURRENCY AND EXCHANGE

Article 13.1. Payments

13.1.1. In accordance with applicable foreign exchange regulations of Vietnam, any payments due from one Party to another, or from a Contractor Party to the Operator, under this Contract shall be made in US Dollar or such other freely convertible currency or currencies as may be acceptable from time to time to the recipient Party or the Operator, at a bank and bank account to be designated by such recipient Party or the Operator.

Notwithstanding Article 5.1.2.13, the Operator must open a joint account at banks authorized to operate in Vietnam in order to service the objective of capital contribution.

13.1.2. Except where otherwise provided in this Contract or in the Accounting Procedures, any payments required to be made in accordance with this Contract shall be made within thirty (30) days following the end of the month in which the obligation to make such payment occurs.

Article 13.2. Currency and exchange

13.2.1. CONTRACTOR and the Operator shall, under the terms of this Contract and in accordance with the applicable Vietnamese foreign exchange regulations, have the following rights:

13.2.1.1. To make any payments, to maintain and operate bank accounts in any currency within Vietnam and to freely convert any of their funds into the currency of Vietnam or any other available foreign currency at the rate of exchange of a commercial bank in which the exchange transactions are to be made and to freely retain or dispose of any funds and currencies currently held by CONTRACTOR and Operator.

13.2.1.2. To make any payments, to maintain and operate bank accounts in any foreign currency outside Vietnam in accordance with the law regulation on foreign exchange management.

13.2.1.3. To freely remit out of Vietnam their income in foreign currencies from the sale of Cost Recovery Oil, Profit Oil, Cost Recovery Gas, and Profit Gas and other lawful income received in the course of oil and gas operations on condition that the Contractor fully discharges financial obligations in accordance with the laws of Vietnam.

13.2.1.4. To freely exchange such foreign currencies referred to in Article 13.2.1.3 into other currencies.

13.2.1.5. To freely maintain and operate accounts in its books or records.

13.2.2. CONTRACTOR shall, in the exercise and performance of its rights and obligations under this Contract, have the right to pay abroad in any currency, expenses incurred for purchase of supplies, equipment and services and other payments related to the oil and gas operations. CONTRACTOR, the Operator and foreign suppliers and their expatriate employees shall be entitled to receive the whole or any part of their payments outside Vietnam, provided that they shall be required to bring into or leave in Vietnam sufficient freely convertible currencies to meet payment of expenses, including personal income tax for expatriate employees working in Vietnam.

13.2.3. In respect of all other matters relating to foreign exchange and the remittance of funds abroad arising in any way out of their connection with this Contract, CONTRACTOR and the Operator (and their expatriate employees) and suppliers (and their expatriate employees) shall be entitled to receive treatment no less favorable to them than that normally accorded to any other foreign company or person doing business in Vietnam.

Chapter XIV

TITLE TO ASSETS, LEASED ASSETS AND ABANDONMENT

Article 14.1. Ownership of assets

14.1.1. Subject to Article 14.3, title to assets of CONTRACTOR used for oil and gas operations in the Contract Area and charged to Oil and Gas Operation Costs shall be transferred automatically to PETROVIETNAM when the total cost of such assets has been fully recovered by CONTRACTOR under Articles 6.1.2 and 6.2.2 or at the termination date of the Contract, whichever is the earlier. Notwithstanding the above provisions, CONTRACTOR has the exclusive right to use free of charge the above assets so long as they are needed for the oil and gas operations under this Contract.

Regarding assets jointly used for a number of oil and gas contracts, when this Contract terminates then such assets shall be dealt with in accordance with guidelines of PETROVIETNAM consistent with Article 5.2.1.6.

14.1.2. CONTRACTOR shall transfer any of such costs recovered assets which are no longer needed for oil and gas operations to PETROVIETNAM. In the case where PETROVIETNAM does not want such transferred assets, CONTRACTOR may dispose of them on behalf of PETROVIETNAM. All net proceeds from the sale or other disposal of these assets will be paid to PETROVIETNAM in accordance with the laws of Vietnam.

14.1.3. CONTRACTOR may dispose of any assets which have not been fully cost recovered but which are no longer needed for oil and gas operations, subject to PETROVIETNAM’s approval. All net proceeds from the disposal of these assets will be credited to Oil and Gas Operation Costs.

Article 14.2. Leased assets

14.2.1. Article 14.1 shall not apply to any assets used for the oil and gas operations which are rented or leased to CONTRACTOR or Operator or rented or leased or owned by suppliers or any other person performing services for CONTRACTOR or Operator.

14.2.2. CONTRACTOR, Operator or suppliers and any other person performing services for CONTRACTOR or Operator shall retain control of, and freely import and re-export all leased assets used for oil and gas operations under this Contract.

14.2.3. Rental payments incurred by CONTRACTOR or Operator for assets used in oil and gas operations shall be regarded as Oil and Gas Operation Costs.

Article 14.3. Decommissioning

14.3.1. Any oil and gas structures constructed or drilled by CONTRACTOR for the purposes of this Contract must be abandoned during the term of the Contract or upon termination of the Contract as prescribed in Chapter XVI, CONTRACTOR shall, upon written request from PETROVIETNAM, carry out the abandonment of such oil and gas structures whether by way of plugging, demolition, removal, dismantling, conversion, placement on temporary or permanent care and maintenance or other bases in accordance with relevant regulations of Vietnam and in conformity with International Oil and Gas Industry Practices.

14.3.2. CONTRACTOR shall, no later than nine (09) months from the date of production of the first oil, gas flow in respect of each oil field or gas field, submit to the Management Committee a Plan on Decommissioning of Oil and Gas Structures which shall be carried out upon completion of production of the relevant oil field or gas field for approval. The Management Committee shall review the Plan on Decommissioning of Oil and Gas Structures prepared and submitted by CONTRACTOR as prescribed in this Contract. Subject to any amendments made in accordance with International Oil and Gas Industry Practices, the Management Committee shall adopt such Abandonment Plan within thirty (30) days from the date CONTRACTOR submits it.

CONTRACTOR's Plan on Decommissioning of Oil and Gas Structures shall include, but is not limited to, the main details prescribed in Clause 4, Article 50 of the Law on Oil and Gas.

No later than one (01) month from the date of production of the first oil, gas flow with respect to each oil field or gas field, such Plan on Decommissioning of Oil and Gas Structures approved by the Management Committee shall be sent to PETROVIETNAM for review and escalation to the Ministry of Industry and Trade for appraisal and final approval.

14.3.3. Notwithstanding the approval of the Plan on Decommissioning of Oil and Gas Structures by the competent authority, no later than one (01) year from the date of the production of the first oil, gas flow for each oil field or gas field, the CONTRACTOR, through the Operator, shall temporarily allocate amounts to the fund for securing the performance of the obligation of decommissioning of oil and gas structures according to the decommissioning plan under the approved Oil and Gas Field Development Plan or adjusted Oil and Gas Field Development Plan. The aforementioned allocation to the fund for securing the performance of the obligation of decommissioning of oil and gas structures shall be adjusted and supplemented in accordance with the Plan on Decommissioning of Oil and Gas Structures or the adjusted Plan on Decommissioning of Oil and Gas Structures approved by the competent authority as prescribed by the Law on Oil and Gas. The allocation to a fund for securing the performance of the obligation of decommissioning of oil and gas structures and the expenditures incurred in decommissioning during the performance of the Contract is the responsibility of each Contractor Party in proportion to the participating interests and shall be charged to Oil and Gas Operation Costs for the recovery purpose of this Contract.

14.3.4. In the course of oil and gas development and production, if deeming that incident-involving oil and gas structures cannot be repaired or are unsafe for operation, CONTRACTOR shall submit plans on decommissioning of such structures to PETROVIETNAM for consideration and approval.

14.3.5. Before the termination of the Contract or the termination of the oil and gas field exploitation period, CONTRACTOR shall complete the allocation to the fund for securing the performance of the obligation of decommissioning of oil and gas structures as determined in the latest updated Plan on Decommissioning of Oil and Gas Structures approved by the competent authority.

14.3.6. In the case where CONTRACTOR develops the field in phases under an Early Oil and Gas Field Production Plan, the allocation to the fund for securing the performance of the obligation of decommissioning of oil and gas structures shall comply with Articles 14.3.1 thru 14.3.5 mutatis mutandis.

Chapter XV

ARBITRATION, SOVEREIGN IMMUNITY AND EXPERT DETERMINATION

Article 15.1. Arbitration

15.1.1. The Parties shall endeavor to settle, through negotiations, differences and disputes related to or arising under this Contract.

15.1.2. Except with respect to disputes referred to an Expert as prescribed in Article 15.3 below, in the event such differences or disputes cannot be settled through negotiations by the Parties within ninety (90) days of any Party's issuance of notice of a dispute, such differences or disputes shall be decided by an arbitration tribunal. The Parties on either side of the dispute shall each appoint an arbitrator. The two arbitrators so appointed shall appoint a third arbitrator by mutual agreement who shall act as chairman of the tribunal. In the case where the two Party-appointed arbitrators cannot agree to the appointment of a third arbitrator within thirty (30) days of the appointment of the second of the appointed arbitrators, then the chairman of the tribunal shall be appointed by the Vietnam/ International Arbitration Center ... (depending on the agreement). The arbitration shall be conducted in [...] (English or Vietnamese) in accordance with the Rules of Arbitration of [... ] (depending on the agreement). The seat of arbitration shall be [...]. Any award of the arbitration tribunal shall be final and binding on the Parties.

The arbitration costs relating to settlement of the dispute among the Parties to the Contract shall be borne by the Party which failed in the tribunal.

The arbitration costs relating to settlement of the dispute between the Parties to the Contract shall not be deemed recoverable Oil and Gas Operation Costs.

Article 15.2. Sovereign immunity

The Parties hereby agree that all of the transactions contemplated by this Contract shall constitute commercial activities. To the extent that a Party may be entitled in any jurisdiction whatsoever to claim for itself or any of its agencies, instrumentalities, properties or assets, immunity, whether characterized as sovereign or otherwise, or as arising from an act of state or sovereignty, from suit, execution, counter-claim, attachment or other legal process of any nature whatsoever, it hereby expressly and irrevocably waives such immunity and hereby agrees not to claim or permit to be claimed on its behalf or on behalf of any of its agencies or affiliates any such immunity. Without prejudice to the generality of the foregoing, each of the Parties hereby expressly waives any right to claim immunity under the laws of Vietnam or in any other jurisdiction in the world.

Article 15.3. Expert determination

Any technical dispute, controversy or claim regarding the use of International Oil and Gas Industry Practices or any dispute relating to technical differences regarding quantities, measurements and the valuation of Crude Oil or Natural Gas under this Contract or any determination of a dispute as specifically referred to in this Contract, or any other matter expressly provided for in this Contract that may be forwarded to the Expert for determination which the Parties cannot settle amicably within a reasonable time, shall be referred for determination by an Expert [...as agreed upon by the Parties...]. The Expert shall make his determination in accordance with the provisions contained in this Contract. Representatives of the Parties shall have the right to consult with the Expert and furnish him with data and information, provided that the Expert may impose reasonable limitations on this right. The Expert shall be free to evaluate the extent to which any data, information or other evidence is substantiated or pertinent. The determination of the Expert shall be final and binding upon the Parties. The Expert shall also determine the allocation of the Expert costs to be borne by each of the Parties which cost shall be included as recoverable Oil and Gas Operation Cost. If the Parties disagree as to whether a dispute, controversy or claim concerns essentially technical matters, and they have failed to resolve their dispute within sixty (60) days, such dispute shall be finally settled by Arbitration in accordance with Article 15.1.

Chapter XVI
TERMINATION AND DEFAULT

Article 16.1. Termination

16.1.1. Without prejudice to Article 16.2, CONTRACTOR may, if there are circumstances that do not warrant continuation of the oil and gas operations and after consultation with PETROVIETNAM, at any time, give a ninety (90) days prior written notice to PETROVIETNAM regarding the intention to relinquish its rights and be relieved of its obligations in accordance with this Contract, except such rights and outstanding obligations as have accrued in the period prior to such relinquishment as well as other continuing rights and obligations as may be contemplated under this Contract.

If CONTRACTOR requests termination of the Contract in accordance with provisions of this Contract or upon the expiration of the term of this Contract, CONTRACTOR must fully discharge the obligations and responsibilities in accordance with this Contract and the Oil and Gas Law. Termination of this Contract shall be effective on the day recorded in the decision on termination of the Contract issued by the Ministry of Industry and Trade.

16.1.2. Without prejudice to Article 16.2, PETROVIETNAM has the right to terminate the Contract by a ninety (90) day prior written notice to CONTRACTOR without any compensation for CONTRACTOR’s loss in the following cases:

16.1.2.1. In the case where CONTRACTOR fails to conduct Oil and Gas Field Development Operations under the approved Oil and Gas Field Development Plan within twelve (12) months from the date on which the Oil and Gas Field Development Plan is approved or ceases the Oil and Gas Field Development Operations in accordance with the approved schedule recorded in the Oil and Gas Field Development Plan within six (06) consecutive months, unless such cessation is caused by (i) a Force Majeure event prescribed in Chapter XIX, (ii) a decision of the competent authority; or (iii) an approval from PETROVIETNAM.

16.1.2.2. If CONTRACTOR commences exploiting a field twelve (12) months later than the approved schedule or ceases the Oil and Gas Production Operations within three (03) consecutive months, except for cessation (i) with a prior approval from PETROVIETNAM; (ii) under a decision of the competent authorities; (iii) for reasons of Force Majeure;

16.1.2.3. If one Contractor Party goes bankrupt, becomes insolvent or is dissolved, on condition that the aforementioned notice is only effective if the remaining Contractor Parties are unwilling to bear the rights and obligations of such insolvent or dissolved Party under this Contract and the Contractor Parties must notify such decision to PETROVIETNAM within the aforementioned ninety (90) day period.

16.1.2.4. If all Contractor Parties jointly go bankrupt, become insolvent or are dissolved.

Article 16.2. Default

16.2.1. In the case where either Party (the “Defaulting Party”) is in material breach of any of its obligations under this Contract, the other Party (the “Non-Defaulting Party”) may give notice to the Defaulting Party requiring the Defaulting Party to remedy such breach. If the Defaulting Party fails to remedy such breach or to commence and diligently pursue the remedy of such breach within thirty (30) days of the date on which the notice of breach is delivered by the Non- Defaulting Party and the Defaulting Party received such notice, the Non- Defaulting Party may, at any time after the expiration of the aforementioned thirty (30) day period, terminate this Contract by a notice of termination delivered to the Defaulting Party. If a dispute arises between the Parties as to whether a Party is in material breach of any of its obligations under this Contract or whether a Party is entitled to terminate this Contract pursuant to the provisions of this Article, either Party may require that the dispute be submitted for arbitration in accordance with Article 15.1 of this Contract.

16.2.2. For the purposes of Article 16.2.1, a Party shall be deemed to be in material breach under this Contract on the occurrence of any of the following circumstances:

16.2.2.1. No fundraising or other payments as prescribed in this Contract shall be conducted within thirty (30) days after the due date of such payment request, unless otherwise agreed.

16.2.2.2. Failure to perform or comply with any significant obligation which must be discharged and failure to comply with this Contract, where such failure or non-compliance seriously impacts on the implementation or economic, commercial objectives of this Contract, if such failure to perform still remains not to be remedied within thirty (30) days from the date of receiving a notice from the Non-Defaulting Party. However, on condition that such failure to perform can be remedied (as decided by the Non-Defaulting Party) but not within such thirty (30) day period, then it shall not be deemed to be a material breach if the Defaulting Party speedily commences and carefully takes action to complete the remedy of such breach and completes such remedy within ninety (90) days of the aforementioned notice.

Chapter XVII
DOMESTIC CONSUMPTION

Article 17.1. Domestic sale of crude oil

17.1.1. Crude Oil produced from the Contract Area must be prioritized for sale on the Vietnamese market at the request of the Government on the basis of the approved annual production plan. CONTRACTOR and PETROVIETNAM will consult with each other regarding the annual plan on purchase of Crude Oil.

17.1.2. In emergency cases, at the request of the Vietnamese Government, PETROVIETNAM may require CONTRACTOR by a written notice given thirty (30) days in advance to sell Crude Oil to PETROVIETNAM for an amount exceeding the agreed plan. Such Oil and Gas shall be supplied from the portion of Net Oil Production to which CONTRACTOR is entitled to own under this Contract.

17.1.3. In the case where CONTRACTOR supplies Crude Oil for domestic consumption, the price paid to CONTRACTOR shall be calculated on the basis of the international competitive price in accordance with Article 8.1.1 and paid in USD or any other freely convertible currencies mutually agreed by the Parties and such payment shall be freely remitted overseas. Payment in respect of such supplies shall be made within thirty (30) days of the date of delivery of the relevant Crude Oil.

Article 17.2. Obligation to sell Natural Gas

Upon request of the Vietnamese Government, CONTRACTOR has the obligation to sell the portion of Natural Gas which it owns on the Vietnamese market on the basis of agreements in projects for development and production of gas.

Chapter XVIII
STABILIZATION AND UNITIZATION

Article 18.1. Stabilization

18.1.1. The Parties base their relations hereunder on the principles of mutual goodwill, good faith and mutual benefit and respect for the investment guarantees and other rights accorded to investors in accordance with Vietnamese law.

18.1.2. PETROVIETNAM shall take all steps necessary to ensure that during the term of this Contract all rights and obligations regarding tax prescribed in Articles 7.2, 7.3 and 7.4 shall be applicable to each of the Contractor Parties.

18.1.3. If after the Effective Date, existing laws are amended or annulled or new laws and regulations) are introduced in Vietnam, or there is application of changes of regulations of a law; or a license is canceled, or the conditions therefore are revised adversely affecting the rights and obligations regarding tax prescribed in Articles 7.2, 7.3 and 7.4, then immediately upon notice from CONTRACTOR, the Parties shall consult with each other and make such changes to this Contract as are necessary both to maintain CONTRACTOR’s rights, benefits and interests hereunder, including CONTRACTOR’s share of Profit Oil or Profit Gas, as at the Effective Date and to ensure that any revenue or income or profit, including any one or more of the foregoing, derived or to be derived to CONTRACTOR under this Contract, will not in any way be diminished in comparison to that which was originally contemplated as a result of such changes of law or annulment thereof or as a result of such changes, cancellation of approvals or licenses.

Article 18.2. Unitization and expansion

18.2.1. If any proven accumulation of Oil and Gas extends beyond the Contract Area into one or more adjacent areas held by one or more licensed contractors, PETROVIETNAM and CONTRACTOR and other relevant contractors in the adjacent areas must reach agreement on the most efficient approach for jointly appraising the accumulation and agree on possible joint development, production, storage, transportation of Oil and Gas from such accumulation and on the manner in which the costs incurred in relation to and oil and gas produced from the such unitized area shall be equitably apportioned. As the case may be, but no later than eighteen (18) months from the date on which the Report on oil and gas resources and reserves of the Oil and Gas Discovery is approved by the competent authority in accordance with the methods and procedures prescribed mutatis mutandis in Article 4.2 of this Contract, CONTRACTOR shall receive the written approval of the Prime Minister in accordance with applicable regulations. The unitized areas shall be regulated by the respective contracts and unitization agreements approved by the Ministry of Industry and Trade.

18.2.2. If any proven accumulation of Oil and Gas extends beyond the Contract Area into another adjacent area currently administrated by another country, then CONTRACTOR and other concerned contractors in such adjacent areas must negotiate in order to reach agreement on unitization for the purpose of joint appraisal, development and production such accumulation of Oil and Gas by a method generally agreed in the oil and gas industry, whereas the costs incurred in relation to and oil and gas produced from the such unitized area shall be shared at an equitable ratio. Such agreement on unitization must be approved by the Government of Vietnam and the country concerned. The unitized areas shall be regulated by the respective oil and gas contracts and the unitization agreement.

18.2.3. If any proven accumulation of Oil and Gas extends beyond the Contract Area into another adjacent area that is at that time not subject to any agreements executed between PETROVIETNAM and a third party, and is deemed “open,” then CONTRACTOR shall be entitled to define, with seismic data and other possible technical solutions available at that time and approved by PETROVIETNAM, the limits of such accumulation. CONTRACTOR and PETROVIETNAM shall endeavor to reach a supplementary agreement to the boundary of the Contract Area to include all of the newly discovered accumulation and any such agreement must be approved by the Prime Minister. The aforementioned modification shall be limited to the specific area defined as the vertical and horizontal productive limits of the newly discovered accumulation or field.

Chapter XIX
FORCE MAJEURE

Article 19.1. Events of Force Majeure

None of the Parties shall be liable to any other Parties for delay or failure to perform caused by an event of Force Majeure to the extent such delay or failure was not attributable to the fault or negligence of the Party seeking protection under this Chapter XIX. As used herein, an event of Force Majeure shall mean an event which is objective and unforeseeable beyond the reasonable control of the Parties and unavoidable, including but not limited to, natural disasters such as fire, explosion, flood or earthquake, and other events such as war, blockade or embargo, occupation, civil war, civil disturbance, sabotage or other civil disorder, strike or other labor disturbances, or any applicable law which is proclaimed and issued and which has the effect of disrupting, obstructing or preventing the performance of oil and gas operations. For the avoidance of doubt, lack of funds shall not constitute Force Majeure.

Article 19.2. Effect and notice

19.2.1. Should an event of Force Majeure occur and prevent any Party from the timely performance of its obligations hereunder, but excluding any financial shortage, the Party whose performance is affected shall be excused from such performance until the cessation of the event of Force Majeure in question.

19.2.2. The Party claiming an event of Force Majeure is obliged to immediately notify the other Parties in writing regarding the existence of an event of Force Majeure. The notification given hereunder shall contain information regarding the nature of the circumstances and, to the extent possible, an estimation of how the Party's performance will be affected as well as an estimate as to when the Party's performance under the Contract will be resumed.

19.2.3. Upon the occurrence of an event of Force Majeure, the time of fulfillment of the related obligations under this Contract shall be postponed for the duration of such circumstances and the period of restoration of such event of Force Majeure.

19.2.4. The Party claiming an event of Force Majeure, with due regard for the provisions of this Contract, shall use all reasonable efforts to remove the causes of non-performance and shall complete its performance as promptly as possible.

19.2.5. Upon the cessation of the event of Force Majeure, the Party affected shall promptly notify the other Parties in writing. Such notification shall state the time deemed necessary for the fulfillment of obligations under this Contract. Should the Party affected fails to make or unduly delay making such notification, such Party shall compensate any losses suffered by the other Parties as a direct result of such failed or delayed notification.

Chapter XX
MISCELLANEOUS

Article 20.1. Notices

Any notice required or given by any Party, to the others, shall be deemed to have been validly served when delivered personally, or sent by recognized courier service or fax to the following addresses:

To: VIETNAM OIL AND GAS GROUP

18 Lang Ha, Ba Dinh District, Hanoi

The Socialist Republic of Vietnam

Attention: General Director

Telephone: 84-4-38 252526

Fax: 84-4-38 265942

To: CONTRACTOR

Address:

Attention:

Telephone:

Fax:

Either Party may substitute or change such address by a prior written notice thereof to the other Parties.

Article 20.2. Applicable law

This Contract shall be construed and governed by the legislation of the Socialist Republic of Vietnam. In the absence of a specific Vietnamese law governing any matter that may be raised, the relevant provisions of foreign legislation (the Parties may agree and specify in the Contract) or International Oil and Gas Industry Practices shall apply, provided that consequences of such application are not contrary to fundamental principles of the laws of Vietnam.

Article 20.3. Insurance

On an annual basis, CONTRACTOR shall propose to the Management Committee an insurance plan for losses or damages to all wells, structures, equipment and facilities used for oil and gas activities, liability insurance for environmental damage, third-party civil liability insurance, personal accident insurance and other types of insurance in accordance with the laws of Vietnam and International Oil and Gas Industry Practices.

When approved by the Management Committee, CONTRACTOR shall be responsible for obtaining and maintaining such insurance, insurance from an insurer with insurance capability and experience within the oil and gas sector and currently operating in Vietnam in conformity with the Law on Insurance Business of Vietnam and international treaties of which Vietnam is a member shall be prioritized.

Article 20.4. Operator

20.4.1. ... [In accordance with the fundamental economic, technical conditions approved by the Prime Minister with respect to the Contract] is the appointed and accepted Operator in accordance with the terms and conditions of this Contract and the Joint Operating Agreement (if any). Appointment of any successor Operator must comply with this Contract and the Joint Operating Agreement (if any) and shall be subject to approval from PETROVIETNAM and competent authorities of Vietnam.

20.4.2. The Operator shall be appointed to represent CONTRACTOR in fulfilling the tax obligations, carrying out work and discharging obligations in accordance with this Contract. The Parties may also make an additional confirmation that in emergency circumstances or abnormal circumstances requiring immediate operations then any Party may also take any action which it considers appropriate or necessary in order to protect its interests and those of its staff and immediately notify the same to the other Party, any expenses arising in relation to that event shall be deemed to be Oil and Gas Operation Costs permitted to be recovered in accordance with Articles 6.1.2 and 6.2.2 and shall be subject to audit result prescribed in Article 11.2.

20.4.3. For the purpose of oil and gas operations in accordance with this Contract, the foreign Operator shall establish an operating office in Vietnam as specifically prescribed in the Investment Registration Certificate within ninety (90) days or another period of time agreed by the Parties as from the Effective Date. The Operator may also jointly use the office of its Affiliate in Vietnam (if any). The expenses of the office shall be correspondingly shared in accordance with principles approved by the Management Committee. In case of changing the information related to the operating office or the re-acquisition of the operating office due to a change of operator or termination of the operating office, the Operator shall issue a notice to the investment registration authority of the locality where the operating office is located and shall carry out the necessary procedures as required.

20.4.4. In the case where a Contractor Party provides an official letter requesting withdrawal from this Contract (the 'Withdrawing Party'), then the remaining Contractor Parties will have the pre-emptive right to receive the Participating Interest of such Withdrawing Party and must ensure that there is no impact on the committed obligations prescribed in this Contract. No later than twelve (12) months from the date of receiving a notice from the Withdrawing Party, the concerned Parties must complete all legal procedures to make a submission to the Prime Minister for approval of such withdrawal and receipt. In the case where the Contractor Parties are unable to reach agreement on the relevant legal instruments within twelve (12) months from the date on which the Withdrawing Party provides such official letter on withdrawal, then CONTRACTOR must report to PETROVIETNAM to resolve the matter or to declare termination of the Contract. In the case where the remaining Contractor Parties do not wish to receive the Participating Interest of the Withdrawing Party, PETROVIETNAM reserves the right to terminate this Contract with a notice to CONTRACTOR ninety (90) days in advance without compensation for any loss of CONTRACTOR.

Article 20.5. Relationship and liabilities

20.5.1. The rights, duties, obligations and liabilities of the Parties under this Contract shall be individual, not joint and several. Each Party shall not be jointly liable and severally responsible for the payment of any amount due by any of the other Parties by reason of the oil and gas operations carried out under this Contract. Each Contractor Party shall be individually responsible for its respective Participating Interest of the obligations as set forth in the Contract, and shall only be liable to the extent of its respective Participating Interest of any claims, damages, judgments or award as set forth in this Contract.

20.5.2. CONTRACTOR shall be liable to PETROVIETNAM or any third party for any loss or damage, including environmental pollution, arising from oil and gas operations caused by Willful Misconduct, omission to act and negligence. Under no circumstances shall CONTRACTOR be liable for consequential losses or damage.

Article 20.6. Confidentiality

20.6.1. Unless otherwise specified hereunder, this Contract and all information acquired or received by any Party under this Contract shall be kept confidential.

20.6.2. Notwithstanding the provisions of Article 20.6.1 above, the Parties may use any such Confidential Information for the purpose of preparing and publishing any reports and returns required by law.

20.6.3. PETROVIETNAM may publish any information of a geological, scientific or technical nature which relates to a surrendered area at any time after the surrender.

20.6.4. PETROVIETNAM may disclose Confidential Information as is required by its financing institutions or consultants without a prior written consent of CONTRACTOR, except for information about patents, intellectual property, technical know-hows, designs, concepts of CONTRACTOR that it has obtained or been authorized to use during the performance of oil and gas operations in accordance with this Contract.

20.6.5. CONTRACTOR shall not disclose to third parties Confidential Information without the consent of PETROVIETNAM, which consent shall not be unreasonably withheld except in the following cases:

20.6.5.1. to such extent as may be required to be disclosed to any authority having jurisdiction by law or by the regulations of any securities exchange.

20.6.5.2. to its Affiliate, technical consultants, any financing institution from which CONTRACTOR is seeking finance for the purposes of carrying out its obligations hereunder, and to a potential assignee of an interest in this Contract, on condition that CONTRACTOR must obtain a confidentiality undertaking from the recipient prior to disclosing such information and must provide such signed confidentiality undertaking to PETROVIETNAM.

20.6.5.3. to suppliers, to the extent necessary for the relevant oil and gas operations, on condition that CONTRACTOR obtains a confidentiality undertaking from such suppliers prior to disclosing the information.

20.6.6. The foregoing provisions of this Article 20.6 shall continue in force after termination of this Contract for five (5) Years.

Article 20.7. Other agreements [as negotiated]

Chapter XXI
IMPLEMENTATION PROVISIONS

Article 21.1. Entry into force

This Contract shall come into effect on and as of the Effective Date.

Article 21.2. Integration

This Contract constitutes the entire agreement among the Parties with respect to the subject matter hereof. No amendment or modification of this Contract shall be valid unless the amendment or modification is made in writing and signed by the duly authorized representatives of the Parties. No prior agreement involving the Parties shall be deemed incorporated herein unless specifically incorporated by reference.

Article 21.3. Amendments and supplements

Amendments of and supplements to this Contract must be agreed by the Parties and approved by the Prime Minister in accordance with the laws of Vietnam.

Article 21.4. Conflict

In case of conflict between the provisions of this Contract and its Annexes, the provisions of this Contract shall prevail.

Article 21.5. Waiver

No waiver of any breach of this Contract by a Party shall be effective unless made in writing and signed by a duly authorized representative of such Party. Any such waiver shall not affect the rights of the Parties with respect to any other breach.

Article 21.6. Severance of provisions

If any provision of this Contract shall become invalid or unenforceable, such invalidity or unenforceability shall not affect the validity of the rest of this Contract. The rest of this Contract shall remain in full force and effect as if such invalid or unenforceable provision had not been made a part of this Contract.

Article 21.7. Publicity

The Parties shall cooperate in developing joint publicity statements to be released at an agreed time. After the Effective Date, all public announcements about the oil and gas operations shall be issued via CONTRACTOR with the approval of PETROVIETNAM.

Article 21.8. Originals and Languages

This Contract shall be executed in [...] (...) originals: including (...) in the Vietnamese language and [...] (...) in the English language (or another lingua francas as agreed by the Parties), and all [...] (...) versions in both languages shall be of equal validity and be given full force and effect.

The Operator is permitted to use English in transaction documents and in recording books of account, which however must be translated into Vietnamese at the specific request of competent authorities of Vietnam.

IN WITNESS WHEREOF, the Parties hereto have made and executed this Contract, as of the day and year first above written.

VIETNAM OIL AND GAS GROUP

By: [............................... ]

Name: [.......................... ]

Position: [................................. ]

CONTRACTOR

By: [............................... ]

Name: [.......................... ]

Position: [................................. ]

FOR REFERENCES

ANNEX B

ACCOUNTING PROCEDURE

OIL AND GAS PRODUCTION SHARING CONTRACT

BLOCK    

THE SOCIALIST REPUBLIC OF VIETNAM

ANNEX B

ACCOUNTING PROCEDURE

Section                                                                                              

Page

1. GENERAL PROVISIONS

2. CLASSIFICATION, DEFINITIONS AND ALLOCATION OF OIL AND GAS OPERATION COSTS

3. RECOVERABLE AND NON-RECOVERABLE COSTS OF THE CONTRACTOR

4. COST RECOVERY AND TIME OF COST RECOVERY      

5. RECORDS AND VALUATION OF ASSETS                           

6. PRODUCTION STATEMENT                                                  

7. VALUE OF PRODUCTION AND PRICING STATEMENT

8. STATEMENT OF EXPENDITURES, RECOVERABLE COSTS AND CREDITS

9. ROYALTY OIL AND ROYALTY GAS STATEMENT          

10. COST RECOVERY STATEMENT                                        

11. PROFIT OIL AND PROFIT GAS STATEMENTS                

1. GENERAL PROVISIONS

1.1. INTRODUCTION

This Accounting Procedure shall be applied and followed in the performance of the Parties' obligations under the Contract to which this Accounting Procedure is an Annex.

The Operator shall, on behalf of CONTRACTOR, perform the functions set forth in this Accounting Procedure.

In case of any conflict between the Contract and this Accounting Procedure, the provisions of the Contract shall prevail.

1.2. PRINCIPLES

All accounting operations shall be conducted in accordance with the provisions of this Contract and the relevant law regulations of Vietnam, especially the accounting guidelines for Operators carrying out Oil and Gas Operations in Vietnam.

1.3. ACCOUNTING STATEMENTS AND DECLARATIONS

1.3.1. All accounting records and books shall be prepared and maintained on an Accrual Basis in accordance with the provisions of this Contract, generally recognized and accepted accounting principles and practices, and in conformity with Generally Accepted Oil and Gas Industry Practices.

1.3.2. CONTRACTOR shall make regular Statements relating to the Oil and Gas Operations as follows:

1.3.2.1. Production Statement (Section 6);

1.3.2.2. Value of Production and Pricing Statement (Section 7);

1.3.2.3. Statement of Expenditures, Recoverable Costs and Credits (Section 8);

1.3.2.4. Royalty Oil and Royalty Gas Statement (Section 9);

1.3.2.5. Cost Recovery Statement (Section 10);

1.3.2.6. Profit Oil Statement and Profit Gas Statement (Section 11);

1.3.2.7. Statement on Account-finalization of Costs; and

1.3.2.8. Balance Sheet.

1.3.3. In addition to the records and statements specifically required in this Section 1, CONTRACTOR shall also prepare and provide PETROVIETNAM with such information and data as PETROVIETNAM may reasonably request and that are directly relevant to CONTRACTOR's obligations under the Contract, to the extent that such data and information are collected and maintained.

1.3.4. The statements referred to in Clauses 1.3.2.3 thru 1.3.2.5 of this Annex shall be prepared, presented, and maintained on both the Cash Basis and the Accrual Basis.

For the purpose of calculating the allocation of Oil and Gas and taxes under the Contract, the Accrual Basis shall be applied. For the purpose of verifying CONTRACTOR's Oil and Gas Operation Costs by PETROVIETNAM's auditor in accordance with Article 11.2.2 of the Contract, the Cash Basis shall be used. The Parties hereby acknowledge and confirm that (i) the Accrual Basis and (ii) the Cash Basis have the meanings set forth in Clause 1.5 of this Annex. The statements referred to in Clauses 1.3.2.3 thru 1.3.2.5 of this Annex shall be prepared, presented, and maintained on the Cash Basis with a reconciliation from the Accrual Basis to the Cash Basis, with evidence of amounts not received from or not paid by CONTRACTOR, clearly identifying receivables and payables.

1.4. LANGUAGE AND UNITS OF ACCOUNT

1.4.1. All accounting books, operational data, statements and correspondences shall be prepared in the English language and shall be recorded in Dollars. A consistent system of units shall be employed for all measurements required under this Accounting Procedure. Where necessary for clarification, other measurement units and currencies may be maintained in the accounts and records. Where necessary upon the specific request of competent Vietnamese authorities, the accounting records, operational data, statements and correspondences shall be translated into Vietnamese.

1.4.2. It is the intent of this Accounting Procedure that neither PETROVIETNAM nor CONTRACTOR should experience an exchange gain or loss at the expense of, or to any of the benefit of, any of the other parties. Currency exchange shall be recorded at the actual exchange rate prevailing at the time of exchange. If there be any gain or loss arising from exchange of currency, such gain or loss will be credited or charged to the accounts under the Contract.

1.4.3. Subject to Clause 1.4.2 of this Annex, amounts received and expenditures made in Vietnamese Dong or any currencies other than US Dollars shall be converted into US Dollars on the basis of the de facto exchange rates or, if not converted, the mean of the buying and selling exchange rates published by Joint Stock Commercial Bank for Foreign Trade of Vietnam (“VCB”) on the first day of the month in which the relevant transaction occurred. Other than the foregoing, accounting entries recorded in Vietnamese Dong or any currencies other than US Dollars shall be converted into US Dollars on the basis of the exchange rates published by VCB on the first day of the month in which such entries are made.

1.5. DEFINITIONS

The terms used in this Accounting Procedure, to which a meaning has been assigned in the Contract, shall have the same meaning defined in the Contract. Some specific terms used in this Accounting Procedure shall be construed as follows:

1.5.1. "Asset" means any item with a value exceeding thirty million Vietnamese Dong (VND 30,000,000) or one thousand three hundred US Dollars (USD 1,300), and having a useful life of more than one (1) year.

1.5.2. "Accrual Basis System" or "Accrual Basis" means the accounting system of revenue and cost recognition where revenue is recognized when earned and cost obligations are recognized when incurred.

1.5.3. "Cash Basis System" or "Cash Basis" means the accounting system of revenue and cost recognition where revenue is recognized when received in cash or cash equivalents, and expenses are recognized when paid.

1.5.4. “Cost Recovery Statement” means the statement mentioned in Section 10.

1.5.5. “Development Costs” mean the costs mentioned in Clause 2.2 of this Annex.

1.5.6. “Exploration Costs” mean the costs mentioned in Clause 2.1 of this Annex.

1.5.7. “G&A” stands for General and Administrative Costs.

1.5.8. “General and Administrative Costs” mean the costs mentioned in Clause 2.4 of this Annex.

1.5.9. "Immovable Assets" means all assets that do not meet the definition of "Current Assets".

1.5.10. "Movable Assets" include surface and/or subsurface drilling and production equipment, facilities, vehicles, barges, floating vessels, automation equipment, aircraft, construction equipment, furniture, office equipment, and other equipment.

1.5.11. “Production Costs” mean the costs mentioned in Clause 2.3 of this Annex.

1.5.12. “Production Statement” means the statement mentioned in Section 6.

1.5.13. “Profit Gas Statement” means the statement mentioned in Section 11.

1.5.14. “Profit Oil Statement” means the statement mentioned in Section 11.

1.5.15. "Section" means a section of this Accounting Procedure, unless otherwise specified.

1.5.16. “Statement of Expenditures, Recoverable Costs and Credits” means the statement mentioned in Section 8.

1.5.17. “Royalty Oil and Royalty Gas Statement” means the statement mentioned in Section 9.

1.5.18. “Value of Production and Pricing Statement” means the statement mentioned in Section 7.

1.5.19. "Clause" means a clause in this Accounting Procedure, unless otherwise specified.

2. CLASSIFICATION, DEFINITIONS AND ALLOCATION OF OIL AND GAS OPERATION COSTS

All costs and expenses incurred in connection with the Oil and Gas Operations shall be deemed Oil and Gas Operation Costs as further explained and defined in Clauses 2.1 thru 2.5 (inclusive) of this Annex and in Section 3 (except for the costs expressly excluded from recoverable costs under Clause 3.2 of this Annex). Oil and Gas Operation Costs shall be classified and specified as follows:

2.1. EXPLORATION COSTS

“Exploration Expenses” mean all direct and allocated indirect expenditures incurred in the search for Oil and Gas, including but not limited to:

2.1.1. collection of geophysical, geochemical, geological and topographical data, including their processing, re-processing and interpretation;

2.1.2. labor, materials, inventories, supplies, and services used in drilling Exploration Wells;

2.1.3. a portion of the costs (as defined in Clause 2.4 of this Annex) allocated to Exploration Costs in accordance with standard international petroleum accounting practices; and

2.1.4. subject to Article 2.2.2 of the Contract, any other costs incurred in connection with Oil and Gas exploration subsequent to (or, if approved by PETROVIETNAM, prior to) the Effective Date, but prior to the Commercial Production Date on the relevant Development Area, including appraisal costs, and not mentioned in Clause 2.2 of this Annex.

2.2. DEVELOPMENT EXPENSES

“Development Costs” mean all direct and allocated indirect costs incurred in the development of one or more Oil and Gas Reservoirs within a Development Area and all associated gathering, processing and/or transportation systems, including, but not limited to:

2.2.1 drilling Wells, other than Appraisal Wells, which are completed as Production Wells and drilling Wells for purposes of producing from an Oil and Gas Reservoir already discovered whether such wells are dry or producing, and drilling wells for the injection of water or Natural Gas or any gas to enhance recovery of oil and gas;

2.2.2. completing Wells by way of installation of casing or equipment or otherwise, after a Well has been drilled for the purpose of bringing such Well into use as a Production Well, or as a well for the injection of water or Natural Gas, or any other gas, liquid, or solid substance to enhance recovery of oil and gas;

2.2.3. intangible drilling costs such as labor, expendable materials, and services that have no salvage value and are incurred in the drilling and deepening of Wells for the purposes specified in Clauses 2.2.1 and 2.2.2 of this Annex;

2.2.4. the costs of facilities on the field, such as pipelines, flow lines, production and treatment units, wellhead equipment, subsurface equipment, enhanced recovery systems, offshore platforms, compression facilities, offshore loading systems including shuttle tankers, oil and gas storage facilities, jetties and export ports, harbors, airports, and related facilities, and access roads for production operations;

2.2.5. feasibility studies, engineering design, and model design for the facilities referred to in Clause 2.2.4 of this Annex; and

2.2.6. a portion of the costs (as defined in Clause 2.4 of this Annex) allocated to Development Costs in accordance with standard international petroleum accounting practices.

2.3. PRODUCTION COSTS

“Production Costs” mean all direct and allocated indirect costs incurred in the production of Crude Oil and Natural Gas in the Contract Area, which are other than Exploration Costs and Development Costs, including that portion of G&A (as defined in Clause 2.4 of this Annex) attributable to Production Costs or allocated thereto.

2.4. GENERAL AND ADMINISTRATIVE COSTS (“G&A”)

General and administrative expenditures mean all the following costs:

2.4.1. G&As in Vietnam mean all direct management, administrative, and overhead costs incurred at the Operator's representative office and field offices in Vietnam, including but not limited to supervisory, accounting, legal, technical, and labor-related services.

G&As incurred outside of Vietnam mean all direct management, administrative, and overhead costs borne by the Operator and its branches outside of Vietnam directly related to the Oil and Gas Operations, including but not limited to supervisory, accounting, legal, technical, and labor-related services. The allocation of such costs to Oil and Gas Operation Costs shall be subject to the conditions prescribed in Clause 3.1.4.2 of this Annex.

2.4.2. General Management Costs of the Operator:

The General Management Costs of the Operator for the Oil and Gas Operations under this Accounting Procedure shall be deemed monthly Oil and Gas Operations Costs. Such costs apply to consultancy, services, and general assistance operations that are not directly chargeable for the Oil and Gas Operations Costs in any other way and shall be paid at the following percentages based on the total Oil and Gas Operations Costs (excluding G&As under Clause 2.4.2 of this Annex) chargeable for the Oil and Gas Operations in the Year:

For the first five (05) Million US Dollars per year             5%

For the next three (03) Million US Dollars per year           3%

For the next two (02) Million US Dollars per year             2%

Above ten (10) Million US Dollars per Year                      1%

If, in any Year, the amount accounted for such services on the aforementioned percentages is less than one hundred thousand US Dollars (USD 100,000), such amount shall be increased to one hundred thousand US Dollars (USD 100,000), except for the first and last Year when such minimum one hundred thousand US Dollars (USD 100,000) shall be prorated based on the number of months in the respective Year.

2.4.3. Allocation of “G&A”

All “G&A” shall be regularly allocated as prescribed in Clauses 2.1.3, 2.2.6 and 2.3 of this Annex to Exploration Costs, Development Costs and Production Costs, respectively.

2.5. OVERHEAD COSTS

Development and Production Costs incurred in relation to facilities utilized across more than one Development Area shall be allocated to such Development Areas with respect to the estimated utilization of each Development Area on a basis that will be agreed upon between CONTRACTOR and PETROVIETNAM.

In the case where Crude Oil and Natural Gas are produced from a Commercial Discovery within the Contract Area, and determining the allocation of Oil and Gas Operation Costs to the production of Crude Oil or Natural Gas is difficult and impractical, the incurred Oil and Gas Operation Costs shall be allocated to the production of Crude Oil or Natural Gas based on the relative revenue from the production of Crude Oil and Natural Gas, respectively.

3. RECOVERABLE AND NON-RECOVERABLE COSTS OF THE CONTRACTOR

3.1. RECOVERABLE COSTS

Subject to the provisions of the Contract, CONTRACTOR shall bear and pay all costs and expenses in respect of Oil and Gas Operations under the Contract. The aforementioned costs and expenses shall be paid pursuant to pursuant to Clauses 3.1.1 thru 3.1.9 (inclusive) of this Annex or expenses incurred under Clause 3.1.10 below shall be classified under the headings referred to in Section 2 and will be recovered pursuant to the procedures defined in Chapter VI of the Contract.

3.1.1. SURFACE RIGHTS

All direct costs incurred from the acquisition, renewal or relinquishment of surface rights acquired after the Effective Date and maintained in the Contract Area.

3.1.2. LABOUR AND ASSOCIATED COSTS

3.1.2.1. Gross salaries and wages including bonuses and allowances paid to employees of the Operator and its Affiliates, who directly engaged in the Oil and Gas Operations, irrespective of the location of such employees, it being understood that in case of those personnel only a portion of whose time is wholly dedicated to Oil and Gas Operations, only that pro-rata portion of applicable wages and salaries will be charged.

3.1.2.2. All employees, other than office employees and non-professional employees, who are engaged in Oil and Gas Operations and whose labor costs are recoverable under Clause 3.1.2.1 of this Annex shall maintain timesheets or other reasonable allocation bases for the purpose of calculating such labor costs. Such timesheets shall record the working hours engaged in Oil and Gas Operations whether or not the relevant employees dedicate all or only a portion of their time to Oil and Gas Operations and shall show the total hours worked for the various projects constituting Oil and Gas Operations.

3.1.2.3. The Operator's costs regarding holiday, vacation, sickness and disability benefits and severance allowances under the employment contracts or other payments required by the laws applicable to the salaries and wages chargeable under Clause 3.1.2.1 of this Annex.

3.1.2.4. Expenses or contributions made pursuant to assessments or obligations imposed under the laws of Vietnam which are applicable to the Operator's costs of salaries and wages chargeable under Section 3.1.2.1 of this Annex.

3.1.2.5. The Operator's cost of established plans for employees' group life insurance, hospitalization, pension, retirement and other benefit plans of alike nature customarily granted to the Operator's employees.

3.1.2.6. Reasonable travel and personal expenses of employees of the Operator and their family, including those made for relocation and annual leaves of the expatriate employees, and their family, assigned to Vietnam all of which shall be in accordance with the policies and procedures of the Operator.

3.1.2.7. All personal income taxes of Vietnam incurred by expatriate employees of the Operator and withheld or paid or otherwise reimbursed by the Operator.

3.1.2.8. The Operator shall charge for Oil and Gas Operations performed outside of Vietnam at a unit rate or an hourly rate customary for such services provided by the Operator or its Affiliates outside of Vietnam. Such rates shall include all reimbursable labor costs, including but not limited to those prescribed in Clauses 3.1.2.1, 3.1.2.2, 3.1.2.3, 3.1.2.4, 3.1.2.5, and 3.1.2.7 of this Annex and shall be pursuant with Clause 3.1.4.2 of this Annex.

3.1.3. TRANSPORTATION

The cost of transportation of employees, equipment, materials and supplies necessary for the conduct of the Oil and Gas Operations (including, if applicable, packaging, processing, brokerage, and insurance costs) not recoverable elsewhere in this Accounting Procedure.

3.1.4. SERVICE CHARGES

3.1.4.1. The actual costs of contracts, for technical and other services entered into by the Operator in relation to Oil and Gas Operations, made with third parties (including the Contractor Parties other than the Operator), other than the Operator’s Affiliates.

3.1.4.2. In case of support services rendered to the Oil and Gas Operations by an Affiliate of the Operator, the charges will be based on actual costs without profits to the Operator. The charges will be no higher than the most favorable prices charged by the Affiliate to third parties for comparable services under similar terms and conditions elsewhere. The Operator will, if requested, provide annual certifications by an independent auditor of the Affiliate (such independent auditor being an internationally accredited public accounting firm) certifying that the calculation of the rates used in determining the charges does not include any profit element and that such charges are calculated in accordance with the consistently applied accounting practices of such Affiliate and in a non-discriminatory manner and in accordance with the Affiliate's standard cost accounting system. Such services will be provided within the scope of service contracts between the Operator and the relevant Affiliate.

3.1.4.3. Actual costs incurred by the Operator to interpret, reprocess, examine and purchase seismic data from PETROVIETNAM prior to the Effective Date with PETROVIETNAM's written consent.

3.1.5. MATERIALS

3.1.5.1. General provisions

So far as is practicable and consistent with efficient economical operation, only such material shall be purchased or furnished by CONTRACTOR for use in the operations under the Contract as may be required for use in the reasonably foreseeable future and the accumulation of surplus stocks shall be avoided.

3.1.5.2. Warranty of materials

CONTRACTOR does not warrant materials beyond the suppliers’ or manufacturers’ guarantee and, in case of defective material or equipment, any adjustment received by CONTRACTOR from the suppliers/manufacturers or their agents will be credited to the Oil and Gas Operation Costs under the Contract.

3.1.5.3. Value of materials charged to the Oil and Gas Operation Costs under the Contract

Except as otherwise provided in Clause 3.1.5.4 of this Annex, materials purchased by CONTRACTOR for use in the Oil and Gas Operations shall be valued to include invoice price less trade discounts (if any) plus purchase and procurement fees, freight and forwarding charges between point of supply and point of shipment, freight to port of destination, insurance, taxes, custom duties (if any), consular fees, other items chargeable against imported materials and, as the case may be, handling and transportation costs from point of importation to warehouse or operating site.

3.1.5.4. Materials purchased from Affiliates of CONTRACTOR shall be valued at the price prescribed in Clause 3.1.5.4.1 and Clause 3.1.5.4.2 of this Annex accordingly.

3.1.5.4.1. New Material (Condition “A”) shall be valued at the lower between the prices of the Affiliate and CONTRACTOR or the current international price.

3.1.5.4.2. Used Material (Conditions “B” and “C”):

3.1.5.4.2.1. which is in sound and serviceable condition and is suitable for re-use without reconditioning shall be classified as Condition “B” and priced at not more than seventy-five percent (75%) of the current price of new materials defined in Clause 3.1.5.4.1 of this Annex.

3.1.5.4.2.2. which cannot be classified as Condition “B” but after reconditioning will be further serviceable for original function as good secondhand material, or is serviceable for original function but substantially not suitable for reconditioning, shall be classified as Condition “C” and priced at not more than fifth percent (50%) of the current price of new materials defined in Clause 3.1.5.4.1 of this Annex. Any cost of reconditioning shall be charged to reconditioned materials provided that the Condition “C” material value plus the cost or reconditioning does not exceed the value of Condition “B” material of the same type.

3.1.5.4.2.3. which cannot be classified as Condition “B” or Condition “C” but is suitable for re-use without reconditioning for the any purpose other than the original function of the Operator shall be priced at not more than seventy-five percent (75%) of the current price of the Operator’s new materials serviceable for original function defined in Clause 3.1.5.4.1 of this Annex.

3.1.6. RENTALS, DUTIES AND OTHER TAX ASSESSMENTS

Any rentals, taxes (including VAT), customs and export duties, compulsory payments, expenses, fees, contributions and any other taxes and fees s levied by the Government in connection with Oil and Gas Operations and payable by CONTRACTOR and not reimbursable to CONTRACTOR by PETROVIETNAM. Corporate Income Tax, Natural Resources Tax, Export Tax levied on CONTRACTOR's Crude Oil are in all cases not recoverable costs of CONTRACTOR.

3.1.7. INSURANCE AND LOSES

Insurance premiums and costs, less any commissions, rebates and discounts, excluding cash discounts incurred for insurance, provided that such insurance is customary and provides prudent protection against risks. If such insurance is wholly or partly placed with an Affiliate of CONTRACTOR, such premiums and costs shall be recoverable only to the extent generally charged by competitive insurance companies other than the aforementioned Affiliate of the CONTRACTOR.

Costs and losses incurred but not recoverable under insurance policies purchased under this Contract shall in any case be recoverable unless such costs and losses arise from the CONTRACTOR's Willful Misconduct referred to in Article 20.5.2. of the Contract.

3.1.8. LEGAL EXPENSES

All reasonable costs and expenses of litigation and legal or related services necessary or expedient for the procuring, perfecting, retention and protection of the Contract Area, in conducting Oil and Gas Operations, and in defending or prosecuting lawsuits, proceeding with arbitration or carrying out alternative dispute resolution procedures involving Oil and Gas Operations and/or the Contract, or any third party claim arising in relation to the Oil and Gas Operations and/or the Contract, or sums paid in respect of legal services necessary or expedient for the protection of and consultancy on the joint interest of PETROVIETNAM and/or CONTRACTOR. In the case where legal services are rendered in such matters by salaried lawyers of the Operator or an Affiliate of the Operator, the costs and expenses for such legal services shall be classified in accordance with Clause 3.1.2 or 3.1.4 of this Annex, as the case may be.

3.1.9. GENERAL AND ADMINISTRATIVE COSTS

All costs described in Clause 2.4 of this Annex.

3.1.10. OTHER COSTS

3.1.10.1. any expenditures not referred to by the foregoing provisions of this Section 3, whether paid by CONTRACTOR according to approved budgets or otherwise approved by the Management Committee, regardless of whether the details of such expenditures may not have been disclosed in prior statements or information;

3.1.10.2. subject to standards prescribed in the Contract or otherwise approved by the Management Committee, any costs borne by CONTRACTOR to carry out necessary and reasonably appropriate Oil and Gas Operations in accordance with Generally Accepted International Oil and Gas Industry Practices;

3.1.10.3. costs of research and development of new equipment, materials, and techniques for use in the exploration, development, and production of Oil and Gas;

3.1.10.4. costs of construction and maintenance, rentals, advance payments, and deposits for offices, residences, warehouses, costs of equipment, furniture, vehicles, computers, software, and costs of maintenance of the aforementioned items;

3.1.10.5. any payments made under Article 2.2.3 of the Contract.

3.1.10.6. all expenses directly related to Decommissioning Operations;

3.1.10.7. regional offices, tents, and auxiliary equipment;

3.1.10.8. ecology and environment (including any payments made under Article 5.1.2.6 of the Contract);

3.1.10.9. research and development;

3.1.10.10. education, training, and utility expenses;

3.1.10.11. project completion costs; and

3.1.10.12. other taxes and fees, if any, related to the transportation, storage, processing, and sale of Oil and Gas in cases where Oil and Gas are not sold at the wellhead.

3.2. COSTS NOT RECOVERABLE UNDER THE CONTRACT

3.2.1. costs incurred before the Effective Date, unless specifically otherwise prescribed or agreed;

3.2.2. criminal fines or penalties (including but not limited to mandatory fines) imposed by the Government, or determined by an agency of the Government;

3.2.3. any expenses, fees, or costs including but not limited to any sponsorship and donations related to public relations or corporate image enhancement and benefitting CONTRACTOR's company, other than contributions approved by PETROVIETNAM;

3.2.4. all taxes on the income or profits of CONTRACTOR, royalties, and export duties under any applicable laws; or any related costs directly or otherwise incurred (including costs incurred in preparing and submitting tax returns, joint venture accounts for corporate reporting, and tax consulting charges);

3.2.5. costs, losses, or damages borne or any liabilities incurred due to any Contractor's Willful Misconduct proven and referred to in Article 20.5.2 of the Contract, including any amounts paid to settle any claims alleging Willful Misconduct whether such Willful Misconduct is admitted or not, or such amounts are declared to be paid on a good faith or similar basis;

3.2.6. costs of replacement and/or repair of assets or other properties that are not insured or underinsured and that result in third-party liability on a strict liability basis regardless of fault, in each case where CONTRACTOR has failed to insure or insure for less than the amount approved by the Management Committee;

3.2.7. audit fees and accounting fees (excluding fees and expenses incurred for audit and accounting services required by the Contract) borne under the audit and accounting requirements of any applicable laws and all costs and expenses incurred related to internal corporate reporting requirements (whether required by law or not);

3.2.8. any costs and fees related to the establishment of any related companies or any joint ventures or consortia;

3.2.9. compensation or damages payments under the Contract, excluding compensation or damages related to Oil and Gas Operations (unless otherwise consented by PETROVIETNAM);

3.2.10. any costs and fees for central operations or the main office of CONTRACTOR or any related companies of CONTRACTOR whether directly or indirectly related but not limited to any mergers, restructuring, and/or consolidation of companies unless approved by PETROVIETNAM;

3.2.11. all costs, expenses, and fees related to dispute resolution (other than disputes related to Oil and Gas Operations) including all arbitration or litigation costs arising from or related to the Contract (whether successful or not) without prior consent of PETROVIETNAM;

3.2.12. any costs incurred not related to Oil and Gas Operations or in connection to matters or operations beyond the Point of Delivery;

3.2.13. costs incurred without proper supporting documentation or proof;

3.2.14. all costs and expenses directly or indirectly related to or associated with training expatriate employees;

3.2.15. any payments under Chapter IX "Bonuses and Data Fees" (including bank charges and bonuses) or training costs under Chapter X of the Contract;

3.2.16. any expenses directly or indirectly related to fundraising to finance Oil and Gas Operations and other charges and surcharges related thereto raised through any means whatsoever; and such costs shall include interest unless otherwise specifically prescribed or agreed upon, bank charges, bonuses, fees, and brokerage;

3.2.17. operation costs for items not included in the Budget for the relevant Year or expenses for any items that have been included in the budget without consent of PETROVIETNAM; and

3.2.18. any other costs not included in any of the above categories but expressly stated in other parts of the Contract as non-recoverable costs, or costs expressly stated as not being costs allowable for the purpose of cost recovery, or any expenditures without consent of PETROVIETNAM (where such consent is required) or expenditures in breach of or non-compliance with CONTRACTOR's obligations under the Contract.

3.3. THE FOLLOWING TRANSACTIONS SHALL CREDITED TO OIL AND GAS OPERATION COSTS UNDER THE CONTRACT

3.3.1. the net proceeds of any insurance or claim in connection with Oil and Gas Operations;

3.3.2. revenue received by CONTRACTOR from third parties for the use of property or assets charged to Oil and Gas Operation Costs under the Contract;

3.3.3. any adjustment received by CONTRACTOR from the suppliers/manufacturers or their agents in connection with defective material, the cost of which was previously charged by CONTRACTOR to Oil and Gas Operation Costs under the Contract;

3.3.4. rentals, refunds, deposits, or other credits received by CONTRACTOR which apply to any charge which has been made to the Oil and Gas Operation Costs under the Contract but excluding any award granted to CONTRACTOR under arbitration as referred to in Clause 3.2.11 of this Accounting Procedure;

3.3.5. the net proceeds received from stock materials charged to Oil and Gas Operation Costs under the Contract, which are subsequently disposed but not utilized in Oil and Gas Operations and remain unrecovered.

3.4. DUPLICATION OF CHARGES AND CREDITS

Notwithstanding any provision to the contrary in this Accounting Procedure, it is the intend of the Parties that there shall be no duplication of charges or credits to the accounts under the Contract.

4. COST RECOVERY AND TIME OF COST RECOVERY

4.1. The recovery of Oil and Gas Operation Costs under the Contract shall be effected in accordance with the procedures set forth in Articles 6.1.2 and 6.2.2 of the Contract. Any costs that are disallowed or suspended by PETROVIETNAM in its audit reports shall be non-recoverable until such time as they have been resolved by the Parties. The Parties shall use their best endeavors to resolve and finalize all disputed costs as expeditiously as possible.

4.1. Principles of recording material costs under the Contract

4.1.1. The cost of materials procured as stock and deemed Exploration or Development Costs shall be recorded as current assets and may be recovered upon being put into use.

4.1.2. The cost of materials procured as stock and deemed Operation Costs may be recoverable from the date of payment for such materials.

5. RECORDS AND VALUATION OF ASSETS

CONTRACTOR shall maintain detailed records of assets in use for Oil and Gas Operations under the Contract in accordance with Generally Accepted International Petroleum Industry Practices and send to PETROVIETNAM a report on all such assets in each Year.

5.1. INVENTORIES OF ASSETS

Inventories of assets in use in Oil and Gas Operations shall be taken by CONTRACTOR at reasonable intervals but at least once a Year with respect to movable assets and once every three (3) years with respect to immovable assets. CONTRACTOR shall give PETROVIETNAM at least thirty (30) day prior written notice of its intention to take such inventory and PETROVIETNAM shall, at its own costs, have the right to be present when such inventory is taken. Failure of PETROVIETNAM to be present at an inventory shall bind PETROVIETNAM to accept the inventory taken by the CONTRACTOR in absence of PETROVIETNAM. The CONTRACTOR shall disclose the principles upon which valuation of the inventory has been based. When an assignment of rights under the Contract takes place. CONTRACTOR may, at the request of the assignee, take a special inventory; provided that the costs of such inventory are borne by the assignee.

5.2. INVENTORIES OF MATERIALS

At least once a Year, and after each drilling campaign, CONTRACTOR shall take an inventory of all materials in stock for use in Oil and Gas Operations. CONTRACTOR shall give PETROVIETNAM a notice and allow PETROVIETNAM, at its own costs, to be involved in such inventory. Failure of PETROVIETNAM to be involved shall bind PETROVIETNAM to accept the inventory taken by the CONTRACTOR in absence of PETROVIETNAM.

6. PRODUCTION STATEMENT

6.1. Upon commencement of Commercial Production in each Contract Area, CONTRACTOR shall submit a monthly Production Statement for each Development Area to PETROVIETNAM, which expressly shows the following information:

6.1.1. the quantity of Crude Oil produced and saved in the month;

6.1.2. the quantity of Natural Gas produced and saved in the month;

6.1.3. the quantities of Oil and Gas used for Oil and Gas Operations in the month;

6.1.4. the quantities of Natural Gas flared;

6.1.5. the quantity of Crude Oil stocks held at the beginning of the month;

6.1.6. the quantity of Crude Oil stocks held at the end of the month;

6.1.7. the quantity of Crude Oil lifted by each Party in the month; and

6.1.8. the quantity of Natural Gas sold by each Party in the month.

6.2. The Production Statement for each Month shall be submitted to PETROVIETNAM not later than fifteen (15) days after the end of such month.

7. VALUE OF PRODUCTION AND PRICING STATEMENT

7.1. CONTRACTOR shall prepare a “Value of Production and Pricing Statement” including calculations of the value of Oil and Gas lifted during each Quarter. This Statement covers:

7.1.1. the quantities and prices received by each Party in respect of each sale of Crude Oil delivered to third parties made during the Quarter in question;

7.1.2. the quantities and prices received by each Party in respect of each sale of Crude Oil delivered during the Quarter in question, other than to third parties; and

7.1.3. the quantities and prices received by each Party in respect of each sale of Natural Gas delivered to third parties made during the Quarter in question.

7.2. The Value of Production and Pricing Statement for each Quarter shall be submitted to PETROVIETNAM not later than thirty (30) Days after the end of such Quarter and within sixty (60) Days after the end of each Year.

8. STATEMENT OF EXPENDITURES, RECOVERABLE COSTS AND CREDITS

8.1. CONTRACTOR shall prepare, with respect to each month, Quarter and Year, a “Statement of Expenditures, Recoverable Costs, and Credits” under this Agreement. This Statement will distinguish between Exploration Costs, Development Costs and Production Costs and will separately identify all significant items of expenditures within such categories that are identical to those in the approved annual Budget. This Statement will cover:

8.1.1. expenditures, recoverable costs and credits (excluding all receipts from sale of Oil and Gas) for the Quarter in question;

8.1.2. cumulative specific expenditures and credits (excluding all receipts from sale of Oil and Gas) for the Budget in the Year in question;

8.1.3. latest forecast of cumulative expenditures and credits for the whole Year; and

8.1.4. variations between budget forecast and latest forecast, with explanation thereof.

8.2. Monthly or Quarterly Statement of Expenditures, Recoverable Costs, and Credits shall be submitted to PETROVIETNAM not later than fifteen (15) Days after the end of the month, or thirty (30) Days after the end of the Quarter, or sixty (60) Days after the end of the Year, respectively, including the annual audit report for the Year in question prepared by an international auditing firm as designated by the Management Committee. The annual audit report of the designated international auditing firm shall be submitted to PETROVIETNAM not later than ninety (90) Days after the end of such Year.

9. ROYALTY OIL AND ROYALTY GAS STATEMENT

9.1. With respect to the Contract Area, CONTRACTOR shall prepare a “Royalty Oil and Royalty Gas Statement” the following information:

9.1.1. retroactive Crude Oil adjustments to the quantity and value of Royalty Oil in the preceding Year;

9.1.2. retroactive Natural Gas adjustments to the Royalty Gas in the preceding Year;

9.1.3. the temporarily calculated quantity and value of Royalty Oil submitted quarterly to PETROVIETNAM; and

9.1.4. the temporarily calculated quantity and value of Royalty Gas submitted quarterly to PETROVIETNAM.

9.2. The temporarily calculated Royalty Oil and Royalty Gas Statement (i) for each Quarter shall be submitted to PETROVIETNAM not later than thirty (30) Days after the end of the Quarter; and (ii) for each Year shall be submitted to PETROVIETNAM not later than sixty (60) Days after the annual account-finalization.

10. COST RECOVERY STATEMENT

10.1. With respect to the Contract Area, CONTRACTOR shall prepare a “Cost Recovery Statement” for each Quarter the following information:

10.1.1. retroactive Crude Oil and/or Natural Gas adjustments to the quantity and value of Cost Recovery Oil and/or Cost Recovery Gas taken and disposed of by CONTRACTOR in the preceding Quarter;

10.1.2. recoverable Oil and Gas Production Costs carried forward from the preceding Quarter;

10.1.3. recoverable Oil and Gas Operation Costs incurred and broken down by operation cost categories, for the Quarter; for the Year-to-Date; and from the Project Commencement Date to the Reporting Date;

10.1.4. total recoverable costs for the Quarter, which is the sum of amounts prescribed in Clauses 10.1.2 and 10.1.3 of this Annex;

10.1.5. quantity and value of Cost Recovery Oil taken and disposed of by CONTRACTOR in the Quarter, as the case may be;

10.1.6. quantity and value of Cost Recovery Gas taken and disposed of by CONTRACTOR in the Quarter, as the case may be;

10.1.7. total cumulative amount of costs recovered in the Quarter or the Year up to the Reporting Date or from the Project Commencement Date to the Reporting Date; and

10.1.8. amount of Recoverable Oil and Gas Production Costs to be carried forward into the next Quarter.

10.2. CONTRACTOR shall prepare a comprehensive “Cost Recovery Statement” for the Year with respect to the Contract Area, showing the following information:

10.2.1. the recoverable cost balance carried forward from the preceding Year;

10.2.2. the recoverable cost balance incurred during the Year and from the Project Commencement Date to the Reporting Date;

10.2.3. the total recoverable cost balance to be recovered for the Year (c = a + b);

10.2.4. the recoverable costs allowable for recovery in the Year (revenue * % of the recoverable cost as determined in the Contract) not exceeding the total recoverable cost balance as prescribed in Clause 10.2.3 of this Annex;

10.2.5. the recoverable costs that have been temporarily recovered during the Year;

10.2.6. the over-recovered/under-recovered costs to be adjusted upon corporate income tax reconciliation for the Year (f = d - e); and

10.2.7. the recoverable cost balance to be carried forward to the subsequent Year (g = c - d).

10.3. The Cost Recovery Statement (i) for each Quarter shall be submitted to PETROVIETNAM not later than thirty (30) Days after the end Quarter; and (ii) for the Year shall be submitted to PETROVIETNAM within sixty (60) Days after the end of each Year.

11. PROFIT OIL AND PROFIT GAS STATEMENTS

11.1. With respect to the Contract Area, Contractor shall prepare a “Profit Oil Statement” and, where appropriate, a “Profit Gas Statement,” as the case may be, showing the following information:

11.1.1. Net Oil Production in the Quarter/Year;

11.1.2. Net Gas Production in the Quarter/Year;

11.1.3. cumulative Net Oil Production and Net Gas Production to the end of the Quarter/Year;

11.1.4. quantity of Profit Oil allocated to PETROVIETNAM and CONTRACTOR during the Quarter/Year;

11.1.5. quantity of Profit Gas allocated to PETROVIETNAM and CONTRACTOR during the Quarter/Year;

11.1.6. cumulative quantities of Profit Oil and Profit Gas allocated to PETROVIETNAM and CONTRACTOR to the end of the Quarter; and

11.1.7. quantities of Profit Oil and Profit Gas taken and disposed of by PETROVIETNAM and CONTRACTOR in the Quarter/Year.

11.2. The Profit Oil Statement and Profit Gas Statement for each Quarter shall be submitted to PETROVIETNAM not later than thirty (30) Days after the end Quarter and within sixty (60) Days after the end of each Year as to the statement for each Year.