Decision 199/2006/QD-TTg establish the parent company - Vietnam Oil and Gas Group

DECISION NO. 199/2006/QD-TTG

OF THE PRIME MINISTER DATED AUGUST 29, 2006, ON THE ESTABLISHMENT OF THE PARENT COMPANY - VIETNAM OIL AND GAS GROUP

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on State Enterprises dated November 26, 2003;

Pursuant to the Law on Enterprises dated November 29, 2005;

Pursuant to the Government’s Decree No. 153/2004/ND-CP dated August 9, 2004, on the organization and management of state corporations and the transformation of state corporations, independent state-owned company after the parent company - subsidiary model;

Pursuant to the Prime Minister’s Decision No. 198/2006/QD-TTg dated August 29, 2006, on approving the Scheme on the formation of Vietnam Oil and Gas Group;

At the request of the Board of Directors of Vietnam Oil and Gas Corporation,

DECIDES:

Article 1. To establish the parent company - Vietnam Oil and Gas Group (hereinafter referred to as Vietnam Oil and Gas Group) on the basis of reorganizing the management, administration, consulting and project management departments of Vietnam Oil and Gas Corporation.

1. Vietnam Oil and Gas Group is a state company, has legal status, seal, symbol, and charter of organization and operation; opens accounts at the State Treasury or banks according to the provisions of law; has business autonomy; is responsible for inheriting the rights, legal obligations and legitimate interests of Vietnam Oil and Gas Corporation.

2. Full name: Tap doan Dau khi Viet Nam.

International transaction name: VIETNAM OIL AND GAS GROUP; referred to as PETROVIETNAM, abbreviated to PVN.

3. Head office: located in Hanoi city.

4. The organizational structure of Vietnam Oil and Gas Group at the time of establishment includes:

- Offices, departments and bureaus advising and assisting the Board of Directors and the Board of General Directors;

- Project management boards in which Vietnam Oil and Gas Group is the owner;

- Information Technology Center;

- Branches and representative offices.

5. The charter capital of Vietnam Oil and Gas Group is the post-audit equity of Vietnam Oil and Gas Corporation as of January 1, 2006.

6. Business lines of Vietnam Oil and Gas Group:

- Research, search, explore, exploit, process, store, transport oil and gas, and provide oil and gas services;

- Import and export oil and gas supplies, equipment, oil and gas products, petrochemicals;

- Trade and distribute oil and gas products, petrochemical raw materials;

- Survey, design, construct, exploit and repair works and facilities serving oil and gas and civil purposes;

- Provide consulting on construction investment and design of works and facilities serving oil and gas and civil purposes; carry out production and trading of construction materials;

- Investment and trading of real estate;

- Investment, production and trading of electricity;

- Financial, securities, banking and insurance activities;

- Training and supply of oil and gas human resources; labor export;

- Hotel, tourism, transaction office business;

- Other business lines as prescribed by law.

7. The management and administration structure of Vietnam Oil and Gas Group includes:

a) The Board of Directors of Vietnam Oil and Gas Group is the direct representative of the state owner at Vietnam Oil and Gas Group, with a maximum of 09 members. Of which, there is 01 representative of the leaders of the Ministry of Industry, 01 representative of the leaders of the Ministry of Finance as concurrent members. The members of the Board of Directors are appointed by the Prime Minister at the request of the Minister of Industry;

b) The Board of Supervisors of Vietnam Oil and Gas Group appointed by the Board of Directors of Vietnam Oil and Gas Group has a maximum of 05 members, of which the Head of the Board of Supervisors is a member of the Board of Directors;

c) The Board of Directors of Vietnam Oil and Gas Group shall appoint, dismiss or sign the contract, or terminate the contract with the General Director of Vietnam Oil and Gas Group after being approved by the Prime Minister;

d) Deputy General Directors and Chief Accountants appointed by the Board of Directors of Vietnam Oil and Gas Group at the request of the General Director shall assist the General Director;

dd) The assisting apparatus of the Board of Directors and the General Director of Vietnam Oil and Gas Group shall be consulted by offices and functional departments.

8. The relationship between Vietnam Oil and Gas Group and the State in the capacity as its owner as well as its member units shall comply with the laws and the organization and operation charter of Vietnam Oil and Gas Group.

9. The financial mechanism of Vietnam Oil and Gas Group is specified in the Government's Decree.

10. The Government uniformly manages and organizes the implementation of the rights and obligations of the state owner to the Vietnam Oil and Gas Group. The Prime Minister assigns the Ministers, the heads of ministerial-level agencies, the Government agencies and the Board of Directors of Vietnam Oil and Gas Group to exercise a number of rights of the owner according to the provisions of law. To be specific:

a) The Prime Minister shall decide:

- To approve the objectives, strategies, long-term plans and business lines of the Vietnam Oil and Gas Group at the request of the Board of Directors of the Vietnam Oil and Gas Group and opinions of the Ministry of Technology and the Ministry of Planning and Investment;

- To approve the charter, approve amendments and supplements to the charter of Vietnam Oil and Gas Group according to the request of the Board of Directors of Vietnam Oil and Gas Group and opinions of the Ministry of Industry, the Ministry of Finance, the Ministry of Planning and Investment.

- To reorganize, dissolve, and diversify ownership of Vietnam Oil and Gas Group at the request of the Board of Directors of Vietnam Oil and Gas Group and opinions of the Ministry of Industry, the Ministry of Finance, the Ministry of Planning and Investment.

- To appoint the Chairperson and members of the Board of Directors of Vietnam Oil and Gas Group at the request of the Minister of Industry and appraisal of the Ministry of Home Affairs;

- To approve the appointment or sign a contract with the General Director of Vietnam Oil and Gas Group at the request of the Board of Directors of Vietnam Oil and Gas Group and appraisal of the Ministry of Industry;

- To approve the scheme to establish a new enterprise with 100% charter capital invested by Vietnam Oil and Gas Group; reorganization, ownership conversion, dissolution, bankruptcy of member enterprises of Vietnam Oil and Gas Group; Vietnam Oil and Gas Group’s reception for new members;

- To approve investment projects of Vietnam Oil and Gas Group, investment projects outside Vietnam Oil and Gas Group under the deciding authority of the Prime Minister in accordance with the law on investment;

- To decide on capital investment to form charter capital and adjust charter capital during operations of Vietnam Oil and Gas Group at the request of the Board of Directors of Vietnam Oil and Gas Group and opinions of the Ministry of Industry, the Ministry of Finance, the Ministry of Planning and Investment.

b) The Ministry of Industry shall:

- Submit to the Prime Minister for decision on appointment of the Chairperson and members of the Board of Directors of Vietnam Oil and Gas Group;

- Appraise the implementation of processes, procedures, standards, and conditions for appointment or signing of contracts with the General Director of Vietnam Oil and Gas Group submitted by the Board of Directors of Vietnam Oil and Gas Group to the Prime Minister;

- Direct the implementation and inspection of the implementation of objectives, strategies and long-term plans of the Vietnam Oil and Gas Group approved by the Prime Minister;

- Report to the Prime Minister for opinions when the Board of Directors of Vietnam Oil and Gas Group submits to the Prime Minister on:

+ Objectives, strategies, long-term plans and business lines of Vietnam Oil and Gas Group;

+ Charter, approval of amendments and supplements to the charter of Vietnam Oil and Gas Group;

+ Reorganization, dissolution, and diversification of ownership of Vietnam Oil and Gas Group.

- Supervise the implementation of investment projects of Vietnam Oil and Gas Group under its authority in accordance with the law on investment.

c) The Ministry of Finance shall:

- Carry out capital investment to form charter capital and adjust charter capital during the operation of Vietnam Oil and Gas Group after being approved by the Prime Minister;

- Inspect and supervise the use of capital and implement the Decree on financial mechanisms for Vietnam Oil and Gas Group; evaluate the effectiveness of business operations and management activities of the Board of Directors of Vietnam Oil and Gas Group.

d) The Ministry of Home Affairs shall:

- Appraise the process, procedures, standards and conditions for appointing the Chairperson and members of the Board of Directors of Vietnam Oil and Gas Group submitted by the Ministry of Industry to the Prime Minister;

- Guide the order and procedures for appointment, relief from duty, dismissal, reward and discipline for the Chairperson and members of the Board of Directors of Vietnam Oil and Gas Group.

dd) The Ministry of Planning and Investment shall:

Supervise the implementation of objectives and tasks assigned by the Prime Minister to Vietnam Oil and Gas Group.

e) The Ministries, the ministerial-level agencies, and the Government agencies shall perform state management functions in relevant fields to Vietnam Oil and Gas Group;

g) The Board of Directors of Vietnam Oil and Gas Group is the direct representative of the state owner at Vietnam Oil and Gas Group and represents the owner of the company in which it invests the entire charter capital.

The Board of Directors of Vietnam Oil and Gas Group shall:

- Submit to the Prime Minister for approval, amendments and supplements to the Charter of Organization and Operation of Vietnam Oil and Gas Group;

- Develop the scheme for new establishment, reorganization, dissolution, and ownership conversion in Vietnam Oil and Gas Group and submit it to the Prime Minister; implement according to the approved scheme;

- Decide on objectives, strategies, long-term plans and business lines of Vietnam Oil and Gas Group after being approved by the Prime Minister and those of a company whose entire charter capital is owned by Vietnam Oil and Gas Group;

- Approve the charter, approve amendments and supplements to the charter of member companies whose entire charter capital is held by Vietnam Oil and Gas Group;

- Decide to use, invest and adjust capital and other resources invested by Vietnam Oil and Gas Group for member companies, but under the charter capital requirement upon establishment of an enterprise or the legal capital level for business lines according to the provisions of law;

- Decide to use capital of Vietnam Oil and Gas Group to invest in establishing member units with the entire charter capital owned by Vietnam Oil and Gas Group but not exceeding the investment capital level under the decision authority of the Board of Directors and after obtaining approval from the Prime Minister;

- Approve capital contribution schemes of member companies in which they hold the entire charter capital to establish new State joint-stock companies and State single-member limited liability companies, State limited liability companies with two or more members outside the sector or field specified in Article 6 of the Law on State Enterprises;

- Decide on group A investment projects within the 5-year development plan and master plan of the Vietnam Oil and Gas Group approved by the Prime Minister;

- Decide or authorize the General Director to decide on joint venture capital projects with foreign investors and overseas investment projects of member companies in which it holds the entire charter capital under the decision-making authority of the Board of Directors in accordance with the law on investment;

- Decide to appoint, relieve from duty, dismiss, sign contracts, terminate contracts, reward and discipline the General Director after being approved by the Prime Minister;

- Inspect and supervise the Chairperson and members of the Board of Members, the Company President, the General Director, the Directors of member units in performing functions and tasks according to the provisions of the Law on State Enterprises, the Law on Enterprises and the Charter of Organization and Operation of Vietnam Oil and Gas Group.

11. Subsidiaries of Vietnam Oil and Gas Group:

a) The corporations operate according to the parent company - subsidiary model, in which Vietnam Oil and Gas Group holds 100% of the charter capital:

- PetroVietnam Exploration Production Corporation (PVEP) (to be formed on the basis of organization and rearrangement of units operating in oil and gas search, exploration and exploitation);

- Gas Corporation (to be formed in the basis of reorganization of PetroVietnam Gas Company, gas production and wholesale units, joint-venture factories and gas project management units);

- Power Production and Trading Corporation (to be established when power plants invested by the Vietnam Oil and Gas Group are put into operation);

- Oil Refinery Corporation (to be established when oil refinery plants invested by the Vietnam Oil and Gas Group are put into operation).

The management structure of the aforesaid corporations shall each comprise: Chairperson of the Corporation, General Director of the Corporation, Deputy General Directors of the Corporation, Chief Accountant of the Corporation and the assisting body.

b) Single-member limited liability companies in which the Vietnam Oil and Gas Group holds 100% of charter capital (to be executed in 2006-2007):

- PetroVietnam Finance Single-member limited liability Company;

- PetroVietnam Trading Single-member limited liability Company;

- Petroleum Product Processing and Distribution Single-member limited liability Company;

- Petrovietnam Manpower Supply and Services Single-member limited liability Company (newly established).

c) Companies in which the Vietnam Oil and Gas Group holds more than 50% of charter capital:

- Joint stock companies:

+ PetroVietnam Technical Services Corporation;

+ Petrol Tourism - Services Company;

+ Petrovietnam Drilling & Well Services Joint Stock Corporation (PV Drilling);

+ Petrovietnam Engineering Corporation;

+ Petrovietnam Construction Joint Stock Corporation;

+ Drilling Mud Company;

- Companies to be equitized in 2006-2007:

+ PetroVietnam Insurance Company;

+ PetroVietnam Transportation Company;

+ PetroVietnam Fertilizer and Chemicals Company;

d) Joint venture factories:

- Joint Venture "Vietsovpetro";

- Mekong Petroleum Joint-Venture Company;

dd) Enterprises newly established under the provisions of law:

- PetroVietnam Real Estate Joint-Stock Company;

- PetroVietnam Securities Joint-Stock Company;

- PetroVietnam Joint-Stock Bank.

12. Companies in which Vietnam Oil and Gas Group holds less than 50% of charter capital:

a) Companies to be equitized in 2006-2007:

- Northern Liquefied Gas Trading Company;

- Southern Liquefied Gas Trading Company.

b) Other companies to be set up under the provisions of law.

13. Scientific and technological enterprises: To be formed on the basis of reorganizing the Vietnam Petroleum Institute and research units under the Vietnam Oil and Gas Corporation.

14. Training establishments:

- Petrovietnam Manpower Training College;

- PetroVietnam University (established when conditions permit and operate under the business mechanism).

15. The Board of Directors of Vietnam Oil and Gas Group shall add subsidiaries, affiliated companies and other member units according to the provisions of law.

Article 2. Implementation organization

1. The Ministry of Industry shall submit to the Prime Minister for decision on appointment of the Chairperson and members of the Board of Directors of Vietnam Oil and Gas Group, no later than the fourth quarter of 2006. 

2. The Ministry of Finance shall assume the prime responsibilities for, and coordinate with the Ministry of Industry, the Board of Directors of Vietnam Oil and Gas Group and relevant agencies in, formulating and submitting to the Government for promulgation the Government’s Decree on financial mechanisms to Vietnam Oil and Gas Group.

3. The Chairperson and the members of the Board of Directors, the General Director of Vietnam Oil and Gas Corporation shall continue to manage and operate Vietnam Oil and Gas Group until the Chairperson and the members of the Board of Directors, the General Director of Vietnam Oil and Gas Group are appointed in accordance with the provisions of law.

4. The Board of Directors of Vietnam Oil and Gas Group shall:

- Submit to the Prime Minister for approval of the Charter of organization and operation of Vietnam Oil and Gas Group.

- Submit to the Prime Minister for approval to appoint or sign a contract with the General Director of Vietnam Oil and Gas Group.

- Submit to the Prime Minister for approval of the scheme to establish the corporations mentioned at Point a, Clause 11 and the formation of companies mentioned at Point dd, Clause 11 and Clause 13, Article 1 of this Decision; decide on the formation of companies mentioned at Point b, Clause 11, Article 1 of this Decision.

- Submit to the Ministry of Industry for decision on equitization of companies mentioned at Point c, Clause 11 and Clause 12, Article 1 of this Decision.

Article 3. This Decision takes effect 15 days after its publication in the Official Gazette.

The Minister of Industry, the Minister of Finance, the Minister of Planning and Investment, the Minister of Labor, Invalids and Social Affairs, the Minister of Home Affairs, the heads of concerned agencies, the Steering Committee for Renewal and Development of Enterprises, the Board of Directors of Vietnam Oil and Gas Corporation and the Board of Directors of Vietnam Oil and Gas Group shall implement this Decision.

THE PRIME MINISTER

Nguyen Tan Dung