Law on Oil and Gas 2026, No. 10/2026/QH16

LAW ON OIL AND GAS^[1]

Pursuant to the Constitution of the Socialist Republic of Vietnam, which has a number of articles amended and supplemented under Resolution No. 203/2025/QH15;

The National Assembly promulgates the Law on Oil and Gas.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Law provides basic oil and gas investigation and oil and gas activities within the mainland, islands and seas of the Socialist Republic of Vietnam.

Article 2. Subjects of application

This Law applies to Vietnamese and foreign agencies, organisations and individuals involved in basic oil and gas investigation and oil and gas activities.

Article 3. Interpretation of terms

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

1. Oil and gas include crude oil, natural gas and solid or semi-solid hydrocarbons in the natural state, and unconventional oil and gas. Unconventional oil and gas include natural hydrogen gas, coal gas, shale oil or argillite oil, shale gas or argillite gas, combustible ice or bitumen or oil and gas in other forms that may exist.

2. Basic oil and gas investigation means research, survey and investigation of geological formations and material composition, and conditions for and laws of oil and gas generation aiming to evaluate oil and gas potential and prospects as a basis for setting out orientations for oil and gas prospecting activities.

3. Oil and gas activities include oil and gas prospecting and exploration, oil and gas field development, oil and gas production, and decommissioning of oil and gas installations.

4. Oil and gas contract means a written agreement signed between the Vietnam National Industry-Energy Group (formerly the Vietnam Oil and Gas Group) and a contractor to conduct oil and gas activities.

5. Production-sharing contract means an oil and gas contract containing terms on the sharing of products between the contracting parties on the basis of oil and gas output obtained from oil and gas activities in the respective contract area; the contractor is entitled to recover costs from oil and gas production output and take total responsibility for financial and technical aspects and bear risks by themselves.

6. Combustible ice means a mixture of hydrocarbons and water in the natural, solid state that exists in the form of frozen crystals.

7. CCS (carbon capture and storage) activities include the capture, treatment, transportation, injection pumping and storage of carbon dioxide (CO₂) in geological formations, decommissioning of installations and monitoring of CO₂ storage areas.

8. Oil and gas installations include drilling platforms, production platforms, auxiliary platforms, storages, floating storages, in-field pipeline systems, collection systems, pipeline systems for transporting oil and gas resources to shore, mooring buoys, wells, wellhead clusters and combinations of related vehicles, machinery and equipment, gas receipt and distribution stations and centres, oil and gas treatment and processing plants, and structures that are manufactured, constructed and installed on a permanent, mobile or temporary basis to serve oil and gas activities.

9. CCS installations means a system of installations and equipment serving CCS activities.

10. Shale oil or argillite oil means hydrocarbons in the natural, liquid state that is contained in shale reservoirs or argillite formations.

11. Oil and gas initially-in-place means the calculated or estimated quantity of oil and gas existing initially in naturally occurring accumulations, whether or not discovered by wells.

12. Crude oil means hydrocarbons in the natural, liquid state, asphalt, ozokerite and condensate. Condensate is a liquid hydrocarbon obtained from natural gas by condensation or extraction.

13. Oil and gas services means commercial, technical and technological services facilitating basic oil and gas investigation, oil and gas activities, CCS activities associated with oil and gas activities, and offshore energy installations associated with oil and gas activities.

14. Oil and gas project means an independent project or a combination of component projects that is/are formed for conducting oil and gas activities.

15. Tail-end production project for an oil and gas field, field cluster or block means an oil and gas project implemented by the Vietnam National Industry-Energy Group or an enterprise with 100% of charter capital held by the Vietnam National Industry-Energy Group after the existing oil and gas contract expires without a contractor selected to continue production from such oil and gas field, field cluster or block under a new oil and gas contract, until no economic efficiency is brought about.

16. Oil and gas recovery factor means the ratio of the quantity of recoverable oil and gas to the quantity of oil and gas initially-in-place of a field or reservoir.

17. Outline plan on oil and gas field development means a document presenting contents of a general research on the necessity, feasibility and preliminary efficiency of an oil and gas field development project with a view to selecting an appropriate field development option, taking into account the potentiality of future expansion of the field or area (if any).

18. Early production plan for an oil and gas field means a document presenting contents of a research on the necessity, feasibility and efficiency of an option on early development of the oil and gas field in order to implement oil and gas production concurrently with the collection of additional information on the field or reservoir or the course of action for production with the goal of optimising development of the oil and gas field.

19. Oil and gas field development plan means a document presenting contents of a research on the necessity, feasibility and efficiency of the selected option on oil and gas field development for use as the basis for developing the oil and gas field.

20. Plan on decommissioning of oil and gas installations means a document presenting contents of a research on technical, technological, safety and environmental options and solutions for, and costs and progress of, the decommissioning of oil and gas installations.

21. Oil and gas production means activities conducted to recover oil and gas from oil and gas fields.

22. Shale gas or argillite gas means hydrocarbons in the natural, gaseous state that is contained in shale reservoirs or argillite formations.

23. Associated gas means hydrocarbons in the gaseous state that is separated during the recovery and processing of crude oil.

24. Natural hydrogen gas means hydrogen in the gaseous state existing initially in natural accumulations and produced from wells.

25. Coal gas means hydrocarbons with the main constituent being methane in the gaseous state that is contained in coal seams.

26. Natural gas means hydrocarbons in the natural, gaseous state that is extracted from wells, including also associated gas.

27. Oil and gas block means an area delimited by points with definite geographical coordinates, which is demarcated for the purpose of conducting oil and gas activities.

28. Open oil and gas block means an oil and gas block that is currently under no oil and gas contract.

29. Oil and gas field means a combination of underground geological formations that have been identified as having one or more than one oil and gas-containing body, reservoir or aquifer.

30. Marginal oil and gas field means an oil and gas field that cannot be developed for production as the investment efficiency is asymptotically lower than the minimum level, given the technological level and normal economic and technical conditions at the time of evaluation.

31. Offshore energy means wind, solar and ocean energy and other forms of energy obtained offshore.

32. Operator means an organisation representing contractors to an oil and gas contract to operate oil and gas activities within the scope of authorisation under the oil and gas contract.

33. Contractor means an investor that is licensed to conduct oil and gas activities on the basis of an oil and gas contract.

34. Oil and gas discovery means an oil and gas accumulation discovered by well drilling.

35. Oil and gas field development means activities of planning, designing, procuring, manufacturing, constructing and installing oil and gas installations for oil and gas production.

36. Participating interests means the rights, interests, obligations and responsibilities of contractors under an oil and gas contract. Participating interests of each contractor at each time is expressed in percentage, and recorded in the oil and gas contract and the investment registration certificate.

37. Tap doan Cong nghiep-Nang luong Quoc gia Vietnam is a state enterprise whose international transaction name is Vietnam National Industry-Energy Group, referred to as PETROVIETNAM or Petrovietnam for short, and is formerly known as the Vietnam Oil and Gas Group.

38. Oil and gas prospecting and exploration means activities conducted for the purpose of discovering oil and gas accumulations and appraising such accumulations.

39. CO₂ storage geological formation means an underground natural geological formation capable of containing and isolating CO₂ on a long-term basis; these formations include depleted oil and gas fields, saline aquifers or other suitable geological structures.

40. International oil and gas industry practices means standards, methods and procedures that have been widely accepted and used by oil and gas investors and countries conducting basic oil and gas investigation and oil and gas activities in the world.

41. Decommissioning of oil and gas installations means activities 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 installations that are no longer necessary for oil and gas activities.

42. Cost recovery means the receipt back of costs already paid for conducting oil and gas activities from the oil and gas production output in the area under an oil and gas contract that is allowed to be recovered under such contract.

43. Oil and gas reserve means the quantity of oil and gas commercially recoverable from the quantity of oil and gas initially-in-place of a field under certain economic and technical conditions.

44. Declaration of commercial discovery means a notice sent by a contractor to the Vietnam National Industry-Energy Group of a profitably exploitable oil and gas discovery.

Article 4. Application of the Law on Oil and Gas, relevant laws, foreign law and international oil and gas industry practices

1. In case there are different provisions between the Law on Oil and Gas and another law concerning the same specific matter relating to basic oil and gas investigation and oil and gas activities, the Law on Oil and Gas shall apply, with regard to the following matters:

a/ The competence, order and procedures for investment in oil and gas projects;

b/ The competence of the Members’ Council of the Vietnam National Industry-Energy Group to approve the use of capital of the Vietnam National Industry-Energy Group or an enterprise with 100% of charter capital held by the Vietnam National Industry-Energy Group when exercising the right to participate in oil and gas contracts or the right of first refusal for participating interests in oil and gas contracts, and when conducting oil and gas activities in different stages of an oil and gas contract or oil and gas project;

c/ Principles for settlement of costs; management and use of information, data, documents, specimens, inventory supplies, oil and gas installations and other assets installed or invested under the expired oil and gas contract for continuing to conduct oil and gas activities; and decommissioning of oil and gas installations that have been received and prepared to be decommissioned;

d/ Selection of contractors to enter into oil and gas contracts;

dd/ Operation mechanisms and financial mechanisms applicable to tail-end production activities.

2. In case another law promulgated after the effective date of this Law contains provisions on the competence, order, procedures and conditions for conducting basic oil and gas investigation or oil and gas activities that are different from those of the Law on Oil and Gas, it is required to specifically determine what matters are regulated or not regulated by the Law on Oil and Gas and what matters are regulated by such another law.

3. In case Vietnam’s law contains no applicable provisions, the parties may agree on the application of foreign law or international oil and gas industry practices to specific contents under an oil and gas contract if consequences of such application are not contrary to the fundamental principles of Vietnam’s law.

Article 5. The State’s policies on oil and gas

1. The State shall encourage Vietnamese and foreign organisations and individuals to invest in conducting basic oil and gas investigation and oil and gas activities in Vietnam in order to increase oil and gas resources, reserves and production output in potential areas and deep and offshore waters; contribute to ensuring national energy security and national economic development; and protect the legitimate rights and interests of Vietnam in accordance with treaties to which the Socialist Republic of Vietnam is a contracting party.

2. The State shall guarantee the ownership rights over investment capital and assets and other lawful rights and interests of Vietnamese and foreign organisations and individuals conducting basic oil and gas investigation and oil and gas activities in Vietnam.

3. The State shall not collect charges for the use of marine areas for conducting basic oil and gas investigation and oil and gas activities, for the treatment and transportation of oil and gas resources to shore by pipeline, or facilities and pipeline systems for CO₂ capture, transportation and storage.

4. The State shall adopt policies on investment incentives for oil and gas projects by oil and gas block or field in order to promote the prospecting, exploration, development and production of unconventional oil and gas; oil and gas blocks and fields located in deep and offshore waters, or areas with difficult or extremely difficult geographical conditions or complex geological conditions; and marginal oil and gas fields; and application of solutions or technologies to increase the oil and gas recovery factor.

5. The State shall encourage Vietnamese and foreign organisations and individuals to share, access and use oil and gas infrastructure and installations for conducting basic oil and gas investigation and oil and gas activities.

6. The State shall encourage Vietnamese and foreign organisations and individuals to use goods and services provided by domestic suppliers for conducting basic oil and gas investigation and oil and gas activities.

7. The State shall adopt policies promoting the sharing and utilisation of existing infrastructure and available information and data of the oil and gas industry for the development of the marine economy.

Article 6. Principles for conducting basic oil and gas investigation and oil and gas activities

1. Vietnam’s oil and gas resources are under the ownership of the entire people, with the State acting as the owner’s representative and performing the unified management thereof.

2. Organisations and individuals shall conduct basic oil and gas investigation and oil and gas activities on the basis of respecting independence, sovereignty, territorial integrity, sovereign rights and jurisdiction; ensure Vietnam’s national interests and security; and comply with Vietnam’s law and treaties to which the Socialist Republic of Vietnam is a contracting party.

3. Organisations and individuals conducting basic oil and gas investigation and oil and gas activities shall comply with Vietnam’s law concerning national defence, national security, social order and safety, community well-being, environmental protection, disaster preparedness, climate change response, oil spill response, maritime safety, and protection of resources, cultural heritage, historical-cultural relics and scenic places.

4. Organisations and individuals conducting basic oil and gas investigation and oil and gas activities shall use modern techniques and technologies, implement digital transformation, comply with national technical regulations, and apply standards conformable with Vietnam’s law and international oil and gas industry practices.

5. Organisations and individuals conducting oil and gas activities shall buy insurance for installations, equipment and means serving oil and gas activities, insurance for compensation liability for environmental damage, third-party civil liability insurance, human insurance and other types of insurance in accordance with Vietnam’s law and international oil and gas industry practices.

6. All information, data, documents and specimens obtained during basic oil and gas investigation and oil and gas activities shall be managed by the State. The collection, handover, management, use and confidentiality of information, data, documents and specimens obtained during basic oil and gas investigation and oil and gas activities must comply with Vietnam’s law, agreements on basic oil and gas investigation and oil and gas contracts.

7. Basic oil and gas investigation and oil and gas activities directly related to the sovereignty, sovereign rights, national jurisdiction, national defence, security, foreign affairs or commitments made on behalf of the Government of Vietnam shall be reported to competent authorities before being conducted.

Article 7. Bases for conducting oil and gas activities

1. Oil and gas activities shall be conducted on one of the following bases:

a/ Oil and gas contracts signed for oil and gas fields, field clusters or blocks;

b/ Management, operation and financial mechanisms of tail-end production projects for oil and gas fields, field clusters or blocks, issued by the state management agency in charge of oil and gas and applicable to projects taken over from contractors or tail-end production projects.

2. The state management agency in charge of oil and gas shall submit to the Prime Minister for approval the list of oil and gas blocks and the adjusted list of oil and gas blocks at the proposal of the Vietnam National Industry-Energy Group.

3. The Government shall detail Clause 2 of this Article.

Article 8. Oil and gas safety requirements

1. Organisations and individuals conducting basic oil and gas investigation and oil and gas activities shall establish safety zones around oil and gas installations.

2. The safety zone around an offshore oil and gas installation embraces:

a/ A no-entry zone for the offshore oil and gas installation, except subsea installations, which is an area delimited by a radius of 500 meters from the outermost edge of the oil and gas installation to all directions, covering also the anchor position in case the installation is a floating unit or movable installation, except special cases as decided by the Prime Minister;

b/ A no-anchor or no-subsea activity zone, which is an area delimited within the distance of 2 nautical miles from the outermost edge of the oil and gas installation, even in case the installation is a subsea installation, where the anchoring of facilities and ships and subsea activities are prohibited, except special cases as approved by contractors or decided by the Prime Minister.

3. The safety zone around an onshore oil and gas installation is a safety zone around the onshore installation and equipment serving oil and gas activities, which shall be determined depending on geographical and social conditions of the area where oil and gas activities are conducted, and serves the purpose of ensuring the safety of humans and facilities in the course of conducting oil and gas activities.

4. Organisations and individuals conducting basic oil and gas investigation and oil and gas activities shall perform the following tasks for safety assurance:

a/ Formulating documents on safety management;

b/ Establishing, maintaining and developing safety management systems to ensure control of risks;

c/ Establishing and maintaining effective emergency response systems, that help mitigate damage upon the occurrence of incidents or accidents causing harm to humans, the environment or property;

d/ Equipping warning systems capable of detecting potential bad situations, causing danger to oil and gas installations and the environment;

dd/ Having guard ships to ensure promptly response to emergency cases, for manned offshore oil and gas installations.

5. The Government shall detail this Article.

Article 9. Prohibited acts in basic oil and gas investigation and oil and gas activities

1. Conducting basic oil and gas investigation and oil and gas activities without permission of competent state management agencies.

2. Taking advantage of basic oil and gas investigation and oil and gas activities to adversely affect national defence, security, national sovereignty and interests, and lawful rights and interests of organisations and individuals; causing environmental pollution.

3. Taking advantage of basic oil and gas investigation and oil and gas activities to exploit natural resources and minerals.

4. Obstructing lawful activities in basic oil and gas investigation and oil and gas activities.

5. Deliberately sabotaging property, equipment, and oil and gas installations; destroying information, data, documents and specimens obtained in the course of conducting basic oil and gas investigation and oil and gas activities.

6. Deliberately falsifying or illegally providing information, data, documents and specimens obtained from basic oil and gas investigations and oil and gas activities.

7. Committing corruption or causing loss and waste in the course of conducting basic oil and gas investigation and oil and gas activities

Chapter II

BASIC OIL AND GAS INVESTIGATION

Article 10. Organisation of basic oil and gas investigation

1. Based on strategies and master plans on energy and mineral resources and proposals of organisations and individuals, the state management agency in charge of oil and gas shall approve a list of basic oil and gas investigation schemes, ensuring that it is comprehensive and complete. The list of basic oil and gas investigation schemes must have the contents on organisations assuming the prime responsibility for conducting basic oil and gas investigation, sources and estimates of funds for conducting basic oil and gas investigation, and time and form of conducting basic oil and gas investigation.

Upon receipt of a proposal for a basic oil and gas investigation 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 geology and minerals, the state management agency in charge of oil and gas shall decide on the coordination between related organisations and individuals on the basis of ensuring the highest efficiency and maximum national interests.

2. Funds for conducting basic oil and gas investigation shall be included in state budget estimates, funding of the Vietnam National Industry-Energy Group, funding of organisations and individuals, and other lawful funding sources.

3. Forms of organising the implementation of a basic oil and gas investigation scheme include:

a/ A document on task assignment, in case a state agency or enterprise assumes the prime responsibility for the implementation of the scheme;

b/ An agreement on basic oil and gas investigation between the Vietnam National Industry-Energy Group and another organisation, in case such organisation assumes the prime responsibility for the implementation of the scheme.

4. Reports on basic oil and gas investigation outcomes shall be updated to the national database system on geology and minerals.

5. The Government shall detail this Article

Article 11. Contents of basic oil and gas investigation

1. Conducting geological and geophysical research and survey; conducting investigation of geological formations and material composition; conducting parameter-based drilling for collecting data and specimens; preparing reports, drawing geological and geophysical maps of areas under investigation and thematic maps to serve oil and gas prospecting activities, combined with conducting research on geohazards, environmental geology and other minerals; and drawing relevant thematic maps.

2. Searching for signs of oil and gas, evaluating oil and gas potential and prospects, and implementing zoning and classification by object and group of geological formations in order to identify new oil and gas areas and set orientations for oil and gas prospecting and exploration activities.

Article 12. Rights and obligations of organisations conducting basic oil and gas investigation

1. Organisations conducting basic oil and gas investigation have the following obligations:

a/ To comply with contents of approved schemes;

b/ To ensure the truthfulness and adequacy of collected and synthesised documents and information on oil and gas geology; to ensure confidentiality of information in the course of conducting basic oil and gas investigation;

c/ To protect minerals and other natural resources in the course of conducting basic oil and gas investigation;

d/ To submit documents on basic oil and gas investigation outcomes for updating to the national database system on geology and minerals.

2. Organisations conducting basic oil and gas investigation may transfer abroad documents obtained in the course of conducting basic oil and gas investigation and specimens of assorted categories in a quantity and of a type conformable with their characteristics and the requirements for analysis and trial processing under the approved schemes and shall comply with the law on protection of state secrets and other relevant laws.

3. Organisations other than state agencies and enterprises conducting basic oil and gas investigation have the rights specified in Clause 2 of this Article and the following rights:

a/ To manage the exploitation and use of basic oil and gas investigation information, data and outcomes under the approved agreements;

b/ To use information and documents under confidentiality commitments; to propose cost recovery when participating in bidding for, and entering into, oil and gas contracts for oil and gas blocks in areas for which basic oil and gas investigation has been conducted under the schemes.

Article 13. Management, exploitation and use of basic oil and gas investigation information, data, documents, specimens and outcomes

1. State agencies and enterprises assuming the prime responsibility for conducting basic oil and gas investigation shall manage information, data, documents, specimens and outcomes of basic oil and gas investigation they conduct; other organisations assuming the prime responsibility for conducting basic oil and gas investigation shall submit basic oil and gas investigation information, data, documents, specimens and approved outcomes to the Vietnam National Industry-Energy Group for management.

2. Organisations and individuals may exploit and use basic oil and gas investigation information, data, documents, specimens and outcomes to carry out research and evaluation and make proposal on signing of oil and gas contracts, and shall pay charges for exploitation and use of oil and gas documents in accordance with the law on charges and fees or approved agreements.

3. Organisations and individuals that access, refer to, exploit and use basic oil and gas investigation information, data, documents, specimens and outcomes shall ensure information confidentiality in accordance with law and agreements.

4. The Government shall detail this Article.

Chapter III

SELECTION OF CONTRACTORS FOR SIGNING OIL AND GAS CONTRACTS

Article 14. Forms of contractor selection

1. Open bidding, which shall be applied on the principle of competition for oil and gas blocks.

2. Restricted bidding, which shall be applied in cases in which there are specific requirements or requirements relating to national defence, security or foreign affairs and only a number of contractors satisfy such requirements.

3. Contractor appointment, which shall apply to oil and gas blocks in the following cases:

a/ The performance of oil and gas contracts is related to national defence, security or foreign affairs and only one contractor satisfies the requirements;

b/ Only one organisation or individual satisfying the conditions specified in Article 15 of this Law expresses interest and proposes signing of an oil and gas contract after information has been disclosed for 30 days;

c/ There is only one proposal from a contractor or a group of contractors within the contractor consortium currently performing an oil and gas contract for an additional investment plan within the same contract area, with economic and technical conditions for a new oil and gas contract after the existing oil and gas contract has expired;

d/ Other cases approved by the Prime Minister at the proposal of the Vietnam National Industry-Energy Group.

4. The Government shall detail this Article.

Article 15. Conditions for participation in bidding for contractor selection

Organisations and individuals participating in bidding for selection of contractors to sign oil and gas contracts must satisfy the following conditions:

1. Having establishment and operation registration certificates issued in accordance with the law(s) of their country(ies), for organisations; or having full civil act capacity in accordance with the law(s) of the country(ies) of which they are citizens, for individuals;

2. Having sufficient financial and technical capacity and experience in oil and gas activities; those who fail to satisfy this condition are required to enter into joint-name entities with other organisations and individuals so as to be qualified for participating in the bidding.

Article 16. Criteria for contractor selection and methods of evaluation of bid dossiers and dossiers of proposals

1. Criteria for selection of a contractor include:

a/ The capacity and experience of the contractor;

b/ Technical conditions appropriate to each oil and gas block;

c/ Economic conditions appropriate to each oil and gas block.

2. Bid dossiers and dossiers of proposals shall be evaluated using scoring, comparison and synthesis methods.

3. A contractor shall be selected for entering into negotiations when satisfying the following conditions:

a/ Having a valid bid dossier or dossier of proposals;

b/ Satisfying the requirements on capacity and experience in oil and gas activities;

c/ Satisfying the requirement on technical conditions;

d/ Satisfying the requirement on economic conditions;

dd/ Having the bid dossier ranked first following evaluation.

4. The Government shall detail this Article.

Article 17. Organisation of contractor selection

1. The Vietnam National Industry-Energy Group has the following responsibilities:

a/ To prepare and approve contractor selection plans;

b/ To issue bid invitation notices; to approve and issue bidding dossiers or dossiers of requirements; to organise the evaluation of bid dossiers or dossiers of proposals;

c/ To organise negotiations on and finalise contents of oil and gas contracts with selected contractors;

d/ To approve contractor selection results and announce contractors selected to sign oil and gas contracts.

2. The Government shall detail this Article.

Chapter IV

OIL AND GAS CONTRACTS

Article 18. Appraisal, approval and modification of contents of oil and gas contracts and issuance and modification of investment registration certificates

1. After completing the selection of a contractor for signing of an oil and gas contract and conducting negotiations for an oil and gas contract or completing negotiations for an agreement on modification of an oil and gas contract, the Vietnam National Industry-Energy Group shall send an application dossier to the state management agency in charge of oil and gas for appraisal and approval of the contents of the oil and gas contract or the agreement on modification of the oil and gas contract.

The approval of the contents of the oil and gas contract or the agreement on modification of the oil and gas contract will replace the approval of investment policy or the approval of adjustments to investment policy for an oil and gas project (if any) in accordance with relevant laws.

2. Upon obtaining the approval under Clause 1 of this Article, the Vietnam National Industry-Energy Group shall coordinate with the contractor to sign the oil and gas contract or the agreement on modification of the oil and gas contract.

3. On the basis of the signed oil and gas contract, the state management agency in charge of oil and gas shall issue an investment registration certificate to the contractor and the Vietnam National Industry-Energy Group.

4. On the basis of the signed agreement on modification of the oil and gas contract, the state management agency in charge of oil and gas shall issue a modified investment registration certificate to the contractor and the Vietnam National Industry-Energy Group.

5. The Government shall detail this Article and specify the modification of contents of oil and gas contracts.

Article 19. Types of oil and gas contracts and main contents of oil and gas contracts

1. Types of oil and gas contracts include:

a/ Production-sharing contract;

b/ Other types of oil and gas contracts.

2. The main contents of a production-sharing contract include:

a/ Information on the legal status and participating interests of the contractor signing the contract;

b/ Subject matter of the contract;

c/ Boundaries of the contract area and schedule for relinquishment of the contract area;

d/ Effect, term and phases of the contract; conditions for extension of phases of the contract, and adjustment and extension of the term of the contract;

dd/ Rights and obligations of the contracting parties and the operator;

e/ Minimum work commitments and minimum financial commitments for different phases of the contract;

g/ Principles for sharing oil and gas products and determining recoverable costs;

h/ Financial obligations towards the State;

i/ Principles for selecting contractors to provide oil and gas services and goods serving oil and gas activities;

k/ Rights of the host country over assets and oil and gas installations following cost recovery and termination of the contract;

l/ Conditions for the transfer of rights and obligations of the parties to the contract;

m/ The right of the Vietnam National Industry-Energy Group to participate in the oil and gas contract and its right of first refusal;

n/ Commitments on commission, training, the oil and gas-related scientific research and technological development fund, and prioritisation of the use of Vietnamese workers and services;

o/ Responsibilities for environmental protection and safety assurance while conducting oil and gas activities; and oil and gas installation decommissioning obligations;

p/ Conditions for termination of the contract, and handling of violations;

q/ Methods of resolving disputes arising from the contract and the applicable law.

3. The Prime Minister shall decide on main contents of other types of oil and gas contracts as appropriate to particular characteristics of relevant oil and gas fields, field clusters or blocks.

4. The Government shall issue a model production-sharing contract.

Article 20. Term of oil and gas contracts

1. The term of an oil and gas contract must not exceed 30 years, of which the term of the prospecting and exploration phase must not exceed 5 years, except the case specified in Clause 2 of this Article.

2. The term of an oil and gas contract for an oil and gas block on the list of oil and gas blocks and fields eligible for investment incentives or special investment incentives must not exceed 35 years, of which the term of the prospecting and exploration phase must not exceed 10 years.

3. The term of an oil and gas contract may be extended in the following cases:

a/ The extension does not exceed 10 years and is subject to approval by the Vietnam National Industry-Energy Group;

b/ When necessary to ensure an effective gas production period, on the basis of the oil and gas field development plan appraised by the Vietnam National Industry-Energy Group in accordance with this Law, the term of an oil and gas contract may be extended for more than 10 years;

c/ When necessary to ensure the effectiveness of activities to increase the oil and gas recovery factor, on the basis of the modified oil and gas field development plan appraised by the Vietnam National Industry-Energy Group in accordance with this Law, the term of an oil and gas contract may be extended for no more than 15 years;

d/ For reasons of national defence, security or foreign affairs, the Prime Minister may approve an extension of the term of an oil and gas contract on the basis of a report of the state management agency in charge of oil and gas.

4. The term of the prospecting and exploration phase may be extended in the following cases:

a/ The extension does not exceed 5 years and is subject to approval by the Vietnam National Industry-Energy Group;

b/ In special cases involving complex oil and gas geological conditions, limited oil and gas potential or particular difficulties in the field conditions for conducting oil and gas activities, the Vietnam National Industry-Energy Group may approve an extension of the prospecting and exploration phase for a period longer than that specified in Point a of this Clause but not exceeding 10 years for ordinary oil and gas blocks, or not exceeding 15 years for oil and gas blocks eligible for investment incentives or special investment incentives;

c/ For reasons of national defence, security or foreign affairs, the Prime Minister may approve an extension of the prospecting and exploration phase on the basis of a report of state management agency in charge of oil and gas.

5. A contractor who has declared a commercial discovery for a discovered gas area but has neither found out outlet markets nor satisfied conditions regarding pipelines and processing equipment may retain the discovered gas area. The period of retaining the discovered gas area must not exceed 5 years as approved by the Vietnam National Industry-Energy Group. When necessary to continue retaining the discovered gas area beyond the above period for specific reasons, the Vietnam National Industry-Energy Group may approve an extension of the retention period for no more than 10 years. During the period of retaining the discovered gas area, the contractor shall complete its/his/her jobs as committed under the oil and gas contract. The retention period shall not be included in the term of the oil and gas contract.

6. The exercise and performance of certain rights and obligations under an oil and gas contract shall be suspended in the following cases:

a/ In a force majeure event, at the proposal of the contractor, the Vietnam National Industry-Energy Group may approve the suspension of the exercise and performance of certain rights and obligations under the oil and gas contract. The suspension period shall be counted from the date of occurrence of the force majeure event to the date of termination of the event;

b/ For reasons of national defence, security or foreign affairs, the Prime Minister may decide on the suspension of the exercise and performance of certain rights and obligations under the oil and gas contract.

7. The term of an oil and gas contract shall be extended for a period corresponding to the extended period of the prospecting and exploration phase under Clause 4 of this Article. The period of suspension of the exercise and performance of certain rights and obligations under the oil and gas contract in a force majeure event or for reasons of national defence, security or foreign affairs as specified in Clause 6 of this Article shall not be included in the term of the oil and gas contract.

8. The Government shall detail this Article.

Article 21. Oil and gas contract areas, relinquishment and expansion of oil and gas contract areas, and unitisation of oil and gas discoveries and fields

1. An oil and gas contract area covers the area of one or more than one oil and gas block specified in the oil and gas contract.

2. Contractors are obliged to relinquish part of the oil and gas contract area at the end of each sub-phase of the prospecting and exploration phase and to decommission oil and gas installations in the relinquished area in accordance with this Law and other relevant laws.

3. Contractors have the right to propose retaining the entire oil and gas contract area or temporarily deferring the obligation to relinquish part of the oil and gas contract area if they propose continuing exploration and additional appraisal of certain prospective structures within the area subject to relinquishment, provided they obtain approval from the Vietnam National Industry-Energy Group.

4. When it is necessary to determine the structural boundaries of a prospective structure or oil and gas discovery extending into an adjacent open oil and gas block in order to ensure the integrated and efficient exploitation of oil and gas resources, contractors may conduct exploration and appraisal activities in such adjacent open oil and gas block after obtaining approval from the Vietnam National Industry-Energy Group. Based on the results of exploration and appraisal activities, contractors may propose an expansion of the oil and gas contract area for submission to the Vietnam National Industry-Energy Group for approval. The modification of the oil and gas contract and issuance of a modified investment registration certificate in association with expansion of the oil and gas contract area must comply with Article 18 of this Law.

5. For field unitisation agreements and joint development agreements that have been approved by competent authorities and have taken effect, or  field unitisation and joint development principles that have been approved by competent authorities before the effective date of this Law, the Vietnam National Industry-Energy Group shall approve the modification and signing of such agreements.

6. In case an oil and gas discovery extends into the area of one or more than one adjacent oil and gas block for which oil and gas contracts have been signed, the contractors shall coordinate with one another and agree to propose oil and gas prospecting and exploration programme for such discovery. Based on the results of exploration and appraisal activities, the contractors shall propose the Vietnam National Industry-Energy Group to approve the unitisation of oil and gas fields or discoveries for appraisal (if any) and joint development, with a view to improving economic efficiency and optimising the exploitation of oil and gas resources.

7. When it is necessary to construct installations or install equipment outside the oil and gas contract area to serve the exploitation, processing or transportation of oil and gas from the oil and gas contract area, contractors may include proposals for such construction or installation in the outline plan on oil and gas field development, the early production plan for the oil and gas field (if any) and the oil and gas field development plan.

8. The Government shall detail this Article.

Article 22. Modification of work commitments under oil and gas contracts

1. In the course of conducting oil and gas activities, if contractors are unable to fulfil their work commitments due to complex geological conditions, they are entitled to propose the change of such commitments. If the proposed changes do not fall into cases requiring modification of the oil and gas contract as prescribed by the Government, the Vietnam National Industry-Energy Group shall consider and approve the contractors’ proposals.

2. For reasons of national defence or security or in force majeure events, contractors may propose exemption from, reduction of, or change of work commitments under oil and gas contracts and submit their proposals to the Vietnam National Industry-Energy Group for reporting to the state management agency in charge of oil and gas for consideration and approval.

3. The Government shall detail this Article.

Article 23. Cost recovery limits under production-sharing contracts

The parties to an oil and gas contract may agree on the following cost recovery limits for contractors under a production-sharing contract:

1. Up to 50% of the annual oil and gas production volume, for oil and gas contracts applicable to ordinary oil and gas blocks;

2. Up to 70% of the annual oil and gas production volume, for oil and gas contracts applicable to oil and gas blocks or fields eligible for investment incentives;

3. Up to 80% of the annual oil and gas production volume, for oil and gas contracts applicable to oil and gas blocks or fields eligible for special investment incentives.

Article 24. Termination of oil and gas contracts

1. An oil and gas contract shall terminate according to its terms or upon expiry of its validity period without an extension being granted under Clause 3, Article 20 of this Law.

2. An oil and gas contract shall terminate before its expiry by agreement of the contracting parties, provided that the contractor has fulfilled its committed obligations and notifies the Vietnam National Industry-Energy Group at least 3 months before the proposed date of early termination.

3. The Vietnam National Industry-Energy Group shall issue a written certification of termination of an oil and gas contract after the contractor has fulfilled its obligations under the oil and gas contract.

Article 25. Transfer of participating interests and contractors’ rights and obligations under oil and gas contracts

1. Contractors have the right to transfer their participating interests and rights and obligations under oil and gas contracts. The transfer of the whole or part of a contractor’s participating interests and rights and obligations under an oil and gas contract must satisfy the following conditions:

a/ The transferee undertakes to take over the transferor’s participating interests and rights and obligations and to fulfil the terms of the signed oil and gas contract;

b/ The transferor and the transferee satisfy the conditions specified in this Law and other relevant laws;

c/ The transferor is obliged to pay taxes arising from the transfer in accordance with the tax laws and other relevant laws.

2. The Vietnam National Industry-Energy Group shall consider the transfer of a contractor’s participating interests and rights and obligations under an oil and gas contract and report it to the state management agency in charge of oil and gas for modification of the oil and gas contract and issuance of a modified investment registration certificate in accordance with Article 18 of this Law.

3. In case a contractor holding the participating interests in an oil and gas contract undergoes a change of ownership or transfers shares, the contractor shall declare and pay tax on arising income (if any) in connection with that oil and gas contract in accordance with Vietnam’s law.

4. The Government shall detail this Article.

Article 26. Languages used in oil and gas contracts and settlement of disputes arising from oil and gas contracts

1. The languages used in oil and gas contracts and their accompanying documents must be Vietnamese and English or another commonly used foreign language as agreed upon by the parties. The Vietnamese version and the English version or the version in another commonly used foreign language are of equal legal validity.

2. Disputes arising from oil and gas contracts shall first be settled through negotiation and conciliation. In case a dispute cannot be settled through negotiation and conciliation, it may be referred to the arbitration body or court specified in the oil and gas contract in accordance with relevant laws.

Article 27. Operating offices of operators under oil and gas contracts

1. Foreign operators shall establish operating offices in Vietnam to perform oil and gas contracts. Such operating offices may have their own seals, open bank accounts, recruit employees, and exercise rights and perform obligations within the scope of authorisation specified in oil and gas contracts and operating agreements among contractors and in accordance with Vietnam’s law.

2. An operator may use a single operating office to manage and operate oil and gas activities under one or more than one oil and gas contract in Vietnam. Management and operating costs attributable to each oil and gas contract shall be allocated and accounted separately.

3. The operating office of an operator under an oil and gas contract may continue operating after the termination of the oil and gas contract in order to fulfil obligations towards the host country in accordance with the oil and gas contract and relevant laws.

4. The Government shall specify the establishment, extension, termination and change of operating offices of foreign operators under oil and gas contracts.

Article 28. Exercise of participation rights and the right of first refusal for participating interests, and receipt of participating interests under oil and gas contracts

1. The Vietnam National Industry-Energy Group may exercise its right to participate in an oil and gas contract once, at the time the first outline plan on development of the oil and gas field within the contract area is approved, or as agreed in the oil and gas contract.

2. The Vietnam National Industry-Energy Group may exercise its right of first refusal for part or the whole of the participating interests under a signed oil and gas contract that a contractor intends to transfer, on the basis of the transfer terms agreed between the prospective transferor and the potential transferee.

3. The Vietnam National Industry-Energy Group may receive all participating interests, data, documents, specimens, supplies in stock, oil and gas installations and other corresponding assets that have been installed or invested in and are transferred by a contractor in case the contractor decides to withdraw from an oil and gas contract for special reasons approved by the Prime Minister, and may suspend the performance of obligations under the oil and gas contract. The mechanisms for management, monitoring, use, financial handling and liquidation of assets and participating interests received from a contractor withdrawing from an oil and gas contract for special reasons must continue to comply with the existing oil and gas contract.

4. The Vietnam National Industry-Energy Group shall decide on the exercise of participation rights and the right of first refusal for participating interests, and the receipt of participating interests under oil and gas contracts. The modification of oil and gas contracts and the issuance of modified investment registration certificates due to the exercise of participation rights or the right of first refusal for participating interests, or the receipt of participating interests under oil and gas contracts, must comply with Article 18 of this Law.

5. The Government shall detail this Article.

Article 29. Proposal of additional investment plans and conclusion of new oil and gas contracts before the expiry of existing oil and gas contracts

1. At least 2 years before the expiry of an oil and gas contract, the contractor performing the oil and gas contract, or an individual contractor or group of contractors within the contractor consortium, may propose an additional investment plan aimed at increasing reserves, improving the oil and gas recovery factor and producing oil and gas within the same contract area under appropriate economic and technical conditions, in order to conclude a new oil and gas contract upon expiry of the existing oil and gas contract, then submit such proposal to the Vietnam National Industry-Energy Group for consideration and selection of contractors to conclude a new oil and gas contract in accordance with this Law.

2. The appraisal and approval of the contents of the new oil and gas contract and the issuance of an investment registration certificate for such contract must comply with Article 18 of this Law.

3. Contractors entering into the new oil and gas contract may continue to use, free of charge, information, data, documents, specimens, supplies in stock, oil and gas installations and other assets installed or invested in within the same contract area for the performance of oil and gas activities under the new oil and gas contract.

4. To ensure the continuity of oil and gas activities and increase oil and gas production volume, the contractor entering into the new oil and gas contract may establish an operating office and carry out certain oil and gas activities under such contract before the expiry of the existing oil and gas contract on the basis of the approval of the Vietnam National Industry-Energy Group, provided that such activities do not affect the oil and gas activities of contractors under the existing oil and gas contract.

5. The Government shall detail this Article.

Article 30. Takeover of oil and gas fields, field clusters and blocks from contractors upon expiry of oil and gas contracts

1. In case a contractor fails to submit a proposal for an additional investment plan and conclusion of a new oil and gas contract under appropriate economic and technical conditions in accordance with this Law within 2 years before the expiry of the existing oil and gas contract, the Vietnam National Industry-Energy Group shall decide on a plan on subsequent actions with regard to the oil and gas field, field cluster or block being exploited within the oil and gas contract area according to one of the following options:

a/ Discontinuing the exploitation of the oil and gas field, field cluster or block and decommissioning oil and gas installations;

b/ Selecting a contractor to continue exploiting the oil and gas field, field cluster or block under a new oil and gas contract with appropriate economic and technical conditions. The contractor entering into the new oil and gas contract may continue to use, free of charge, information, data, documents, specimens, supplies in stock, oil and gas installations and other assets installed or invested in within the contract area to carry out oil and gas activities;

c/ Conducting tail-end production from the oil and gas field, field cluster or block.

2. In the case specified in Point b, Clause 1 of this Article, the Vietnam National Industry-Energy Group shall select a contractor to enter into a new oil and gas contract in accordance with this Law. At least 3 months before the expiry of the existing oil and gas contract, if it is anticipated that a new oil and gas contract cannot be concluded by that time, or no later than the time specified in Clause 2, Article 24 of this Law, the Vietnam National Industry-Energy Group shall prepare a takeover plan. If, upon expiry of the existing oil and gas contract, no new oil and gas contract has been concluded or the new oil and gas contract has not yet taken effect, production activities shall be conducted under the mechanism on management, operation and finances applicable to projects for tail-end production from oil and gas fields, field clusters or blocks until the new oil and gas contract takes effect or production ceases to be economically viable.

3. In the case specified in Point c, Clause 1 of this Article, the Vietnam National Industry-Energy Group shall itself or designate an enterprise with 100% of charter capital owned by the Vietnam National Industry-Energy Group, to take over and implement the project on tail-end production from the oil and gas field, field cluster or block until continued production from such field, field cluster or block ceases to be economically viable.

4. The state management agency in charge of oil and gas shall promulgate the mechanism on management, operation and finances applicable to projects for tail-end production from oil and gas fields, field clusters or blocks.

5. The Government shall detail this Article.

Chapter V

OIL AND GAS ACTIVITIES

Article 31. Onshore oil and gas field development projects; oil and gas field development projects involving an integrated system of onshore and offshore oil and gas installations and equipment

1. In the course of preparing an outline plan on oil and gas field development, if it is necessary to construct an integrated system of onshore and offshore oil and gas installations and equipment outside the initial area of the oil and gas contract to serve the exploitation, processing and transportation of oil and gas for the production of commercial oil and gas products in order to improve the economic efficiency of the oil and gas field development project, the Vietnam National Industry-Energy Group shall report thereon to the state management agency in charge of oil and gas for the latter to give in-principle approval of the implementation of the oil and gas field development project involving an integrated system of onshore and offshore oil and gas installations and equipment.

2. Forest or land repurposing (if any) relating to onshore oil and gas field development projects and oil and gas field development projects involving an integrated system of oil and gas installations and equipment must comply with the laws on forestry and land. During the process of forest and land recovery and repurposing, the Vietnam National Industry-Energy Group and contractors may conduct surveys and measurements to collect data for the preparation of oil and gas field development plans.

3. The Government shall detail this Article.

Article 32. Formulation and approval of work programmes and budgets

Contractors shall formulate annual work programmes and budgets and submit them to the Vietnam National Industry-Energy Group for approval in accordance with the commitments under oil and gas contracts, approved programmes and plans (if any), and work requirements, taking into account plans for subsequent years.

Article 33. Formulation and approval of oil and gas prospecting and exploration programmes

1. During the prospecting and exploration phase, based on the signed oil and gas contracts and actual work requirements, contractors shall formulate overall oil and gas prospecting and exploration programmes or adjusted oil and gas prospecting and exploration programmes and submit them to the Vietnam National Industry-Energy Group for approval.

2. During oil and gas field development and oil and gas production, contractors may propose additional oil and gas exploration activities and formulate additional oil and gas exploration programmes for submission to the Vietnam National Industry-Energy Group for approval.

3. The adjustment of oil and gas prospecting and exploration programmes and additional oil and gas exploration programmes specified in Clauses 1 and 2 of this Article shall be approved by the Vietnam National Industry-Energy Group separately or as part of the approval of annual work programmes and budgets in accordance with Article 32 of this Law.

4. The Government shall detail this Article.

Article 34. Preparation, appraisal and approval of oil and gas resources and reserves reports

1. Based on the results of oil and gas exploration and appraisal activities, if a commercial oil and gas discovery or an oil and gas discovery with development potential is made within an oil and gas contract area, the contractor shall prepare an oil and gas resources and reserves report and submit it to the Vietnam National Industry-Energy Group.

2. The appraisal and approval of oil and gas resources and reserves reports specified in Clause 1 of this Article are as follows:

a/ For oil and gas fields or discoveries with a total volume of oil in place of below 30 million cubic meters or a total volume of natural gas in place of below 30 billion cubic meters, the Vietnam National Industry-Energy Group shall appraise and approve the reports;

b/ In cases other than those specified in Point a of this Clause, the Vietnam National Industry-Energy Group shall submit the reports to the state management agency in charge of oil and gas for appraisal and approval.

3. The appraisal and approval of adjusted oil and gas resources and reserves reports are as follows:

a/ In case the volume of oil initially-in-place or the volume of natural gas initially-in-place changes by 30% or less compared to the most recently approved volume; or the volume of oil in place changes by more than 30% but does not cause the volume of oil in place to exceed 30 million cubic meters, or the volume of natural gas in place changes by more than 30% but does not cause the volume of natural gas in place to exceed 30 billion cubic meters, the Vietnam National Industry-Energy Group shall appraise and approve the reports;

b/ In cases other than those specified in Point a of this Clause, the Vietnam National Industry-Energy Group shall submit the reports to the state management agency in charge of oil and gas for appraisal and approval.

4. Contractors shall update oil and gas resources and reserves reports for each field within 3 years from the date of first commercial oil or gas flow and every 5 years thereafter.

5. The Vietnam National Industry-Energy Group shall monitor and summarise information on the oil and gas resources and reserves of oil and gas fields within the territory of Vietnam and annually submit updated reports on such resources and reserves to the state management agency in charge of oil and gas.

6. The Government shall specify the dossiers, order and procedures for the formulation, appraisal and approval of oil and gas resources and reserves reports and adjusted oil and gas resources and reserves reports.

Article 35. Preparation, appraisal and approval of outline plans on oil and gas field development

1. Contractors shall prepare outline plans on oil and gas field development based on approved oil and gas resources and reserves reports and submit them to the Vietnam National Industry-Energy Group for appraisal and approval.

2. Outline plans on oil and gas field development will replace prefeasibility study reports for construction investment of oil and gas projects as prescribed by the law on construction and other relevant laws.

3. Contractors shall formulate adjusted outline plans on oil and gas field development in cases of changes in land use plans or selected development options, or additional investment in production platforms or floating storage units. For other changes, contractors are not required to formulate adjusted outline plans on oil and gas field development.

4. In case an oil and gas field is developed without investment in production platforms or floating storage units but is connected to existing oil and gas installations for processing, contractors shall not be required to formulate outline plans on oil and gas field development.

5. The Government shall specify the dossiers, order and procedures for the formulation, appraisal and approval of outline plans on oil and gas field development and adjusted outline plans on oil and gas field development.

Article 36. Formulation, appraisal and approval of early production plans for oil and gas fields

1. After an outline plan on oil and gas field development is approved, or in the case specified in Clause 4, Article 35 of this Law, if it is necessary to conduct further studies or collect additional information to minimise risks associated with full-field development activities, contractors may prepare early production plans for oil and gas fields and submit them to the Vietnam National Industry-Energy Group for appraisal and approval.

2. Early production plans for oil and gas fields will replace feasibility study reports for construction investment of oil and gas projects as prescribed by the law on construction and other relevant laws.

3. In case additional production platforms or floating storage units are to be constructed, or additional investment is made in drilling infill wells, exploration wells, appraisal-cum-production wells or injection wells, or in constructing in-field pipelines, contractors shall formulate adjusted early production plans for oil and gas fields and submit them to the Vietnam National Industry-Energy Group for appraisal and approval. The decision approving an adjusted early production plan for an oil and gas field concurrently serves as the decision approving the adjusted outline plan on oil and gas field development.

4. In case the total investment capital under an early production plan for an oil and gas field increases, contractors shall submit an adjusted early production plan for the oil and gas field to the Vietnam National Industry-Energy Group for appraisal and approval. In case the total investment capital increases by less than 10%, the Vietnam National Industry-Energy Group may approve the increase as part of its approval of annual work programmes and budgets.

5. For adjustments other than those specified in Clauses 3 and 4 of this Article, contractors are not required to formulate adjusted early production plans for oil and gas fields.

6. Upon completion of an early production plan for an oil and gas field, contractors shall report to the Vietnam National Industry-Energy Group on the results of its implementation and update the production model, together with supporting data, analyses and conclusions, for use in the formulation of oil and gas field development plans and in oil and gas field production.

7. The Government shall specify the dossiers, order and procedures for the formulation, appraisal and approval of early production plans for oil and gas fields and adjusted early production plans for oil and gas fields.

Article 37. Formulation, appraisal and approval of oil and gas field development plans

1. After an outline plan on oil and gas field development is approved or before the expiry of the implementation period of an early production plan for an oil and gas field, or in the case specified in Clause 4, Article 35 of this Law, contractors shall formulate oil and gas field development plans and submit them to the Vietnam National Industry-Energy Group for appraisal and approval.

2. Oil and gas field development plans will replace feasibility study reports for construction investment of oil and gas projects as prescribed by the law on construction and other relevant laws.

3. In case additional production platforms or floating storage units are to be constructed, or additional investment is made in drilling infill wells or injection wells, or in constructing in-field pipelines, contractors shall formulate adjusted oil and gas field development plans and submit them to the Vietnam National Industry-Energy Group for appraisal and approval. The decision approving an adjusted oil and gas field development plan concurrently serves as the decision approving the adjusted outline plan on oil and gas field development.

4. In case the total investment capital under an oil and gas field development plan increases, contractors shall submit an adjusted oil and gas field development plan to the Vietnam National Industry-Energy Group for appraisal and approval. In case the total investment capital increases by less than 10%, the Vietnam National Industry-Energy Group may approve the increase as part of its approval of annual work programmes and budgets.

5. For adjustments other than those specified in Clauses 3 and 4 of this Article, contractors are not required to formulate adjusted oil and gas field development plans.

6. In the cases specified in Points b and c, Clause 3, Article 20, and in Articles 43 and 44, of this Law, after a modified investment registration certificate is issued, the Vietnam National Industry-Energy Group shall approve oil and gas field development plans or adjusted oil and gas field development plans.

7. The Government shall specify the dossiers, order and procedures for the formulation, appraisal and approval of oil and gas field development plans and adjusted oil and gas field development plans.

Article 38. Gas flaring and venting

1. Contractors shall collect as much gas as possible after gas has been used for in-field operations (if any) during oil and gas production.

2. Contractors may flare and vent gas in the following cases:

a/ During formation testing to clean up wells; well completion, repair and treatment; well pressure relief; and commissioning of technological systems;

b/ In emergencies to ensure the safety of people, property and oil and gas activities, or in case gas processing or transportation systems are temporarily shut down due to incidents;

c/ Under annual gas flaring and venting plans approved by the Vietnam National Industry-Energy Group on the basis of early production plans for oil and gas fields and oil and gas field development plans, taking into account operational safety, periodical maintenance and actual production conditions of oil and gas fields.

Article 39. Formulation, appraisal, approval and implementation of decommissioning plans for oil and gas installations

1. In the course of conducting oil and gas activities, upon completion of each phase or termination of an oil and gas contract, contractors shall decommission oil and gas installations that are no longer in use or can no longer serve oil and gas activities due to serious damage or technological obsolescence, thus affecting the safety and efficiency of oil and gas activities.

2. Within 1 year from the date of the first oil or gas flow from oil and gas contract areas, contractors shall formulate decommissioning plans for oil and gas installations and submit them to the Vietnam National Industry-Energy Group for appraisal and approval.

3. At least 1 year before the expiry of oil and gas contracts or the end of the production period of oil and gas fields, contractors shall update decommissioning plans for oil and gas installations and submit them to the Vietnam National Industry-Energy Group for appraisal and approval.

4. Contractors shall formulate adjusted decommissioning plans for oil and gas installations and submit them to the Vietnam National Industry-Energy Group for appraisal and approval in case of adding or expanding installations, equipment or wells, or there are changes in technological or technical requirements or costs for decommissioning of oil and gas installations. In other cases, contractors are not required to formulate adjusted decommissioning plans for oil and gas installations.

5. During the implementation of oil and gas projects, if an oil and gas installation is found to have suffered an incident that cannot be repaired or remedied, or cannot be safely maintained in operation, the contractor shall submit a decommissioning plan for the oil and gas installation to the Vietnam National Industry-Energy Group for approval.

6. Contractors shall submit proposals for deferring the decommissioning of part or the whole of oil and gas installations to the Vietnam National Industry-Energy Group for approval, except the case specified in Clause 7 of this Article.

7. In special cases involving national defence or security, the Prime Minister shall decide on the deferral of decommissioning or the retention of part or the whole of oil and gas installations.

8. Organisations and individuals shall formulate decommissioning plans for relevant oil and gas installations, including gathering platforms and sea-to-shore oil and gas pipeline systems, oil and gas processing and refining plants, distribution stations and pipeline systems for distributing gas to consumers to serve oil and gas activities according to the Government’s regulations.

9. The Government shall specify the dossiers, order and procedures for the formulation, appraisal and approval of decommissioning plans for oil and gas installations and adjusted decommissioning plans for oil and gas installations; and the dossiers, order and procedures for approval of the deferral of decommissioning of part or the whole of oil and gas installations or the retention of part or the whole of oil and gas installations.

Article 40. Fund for securing oil and gas installation decommissioning obligations

1. Financial security for oil and gas installations decommissioning obligations shall be provided through the establishment of a fund which shall be used exclusively for the fulfilment of oil and gas installation decommissioning obligations.

2. Within 1 year from the date of the first oil or gas flow from an oil and gas contract area, the concerned contractors shall establish a fund for securing oil and gas installation decommissioning obligations. Annual contributions to the fund shall be determined on the basis of the approved decommissioning plan for oil and gas installations and paid to the Vietnam National Industry-Energy Group. Each contractor’s contribution to the fund must correspond to its participating interest in the oil and gas contract and shall be included in the recoverable costs under the oil and gas contract.

3. Before the termination of an oil and gas contract or the end of the production phase of an oil and gas field, the concerned contractors shall complete their contributions to the fund for securing oil and gas installation decommissioning obligations for the relevant oil and gas contract area or oil and gas field.

4. The Vietnam National Industry-Energy Group shall manage the fund for securing oil and gas installation decommissioning obligations in accordance with law and the requirements for oil and gas installation decommissioning under the approved decommissioning plans for oil and gas installations. Pending the use of the fund, the Vietnam National Industry-Energy Group shall deposit its money to a commercial bank selected by the Vietnam National Industry-Energy Group, ensuring the safety of the deposits. Interest accrued annually, after fulfilment of financial obligations under relevant laws, shall be added to the value of the fund.

5. In case the balance of the fund for securing oil and gas installation decommissioning obligations is insufficient to cover the costs necessary for oil and gas installation decommissioning, contractors shall make additional contributions to ensure the fulfilment of their decommissioning obligations. In case the balance of the fund exceeds the amount required for oil and gas installation decommissioning, the surplus left after the fulfilment of decommissioning obligations shall be refunded to the parties to the oil and gas contract in accordance with the oil and gas contract.

6. The Government shall specify the level of contributions to, and management and use of, the fund for securing oil and gas installation decommissioning obligations.

Chapter VI

INCENTIVES FOR OIL AND GAS ACTIVITIES AND RESOURCE EXPLOITATION POLICIES APPLICABLE TO OIL AND GAS FIELDS, FIELD CLUSTERS AND BLOCKS SUBJECT TO TAIL-END PRODUCTION

Article 41. Objects eligible for incentives

1. Oil and gas blocks and fields will be eligible for investment incentives if satisfying any of the following criteria:

a/ Oil and gas blocks are located in deep-water, offshore areas, areas with difficult geographical conditions or areas with complex geological conditions;

b/ Ordinary oil and gas blocks have been put up for bidding under the economic and technical conditions applicable to oil and gas contracts, but no contractors or investors have submitted bid dossiers;

c/ Oil and gas blocks are formed from areas relinquished under oil and gas contracts applicable to ordinary oil and gas blocks;

d/ Ordinary oil and gas blocks are relinquished by contractors before the expiry of oil and gas contracts;

dd/ Oil and gas blocks are formed by consolidating relinquished areas as specified in Point c and oil and gas blocks relinquished by contractors as specified in Point d of this Clause;

e/ Marginal oil and gas fields are located within ordinary oil and gas blocks covered by oil and gas contracts that remain in effect;

g/ Upon the expiry of oil and gas contracts, production at oil and gas fields within ordinary oil and gas blocks can be continued but fails to achieve the minimum investment efficiency under the economic and technical conditions of the signed oil and gas contracts;

h/ New oil and gas plays are not yet explored or no oil and gas discoveries are made in sedimentary basins;

i/ Other cases involving national defence, security or foreign relations, as decided by the Prime Minister.

2. Oil and gas blocks and fields will be eligible for special investment incentives if satisfying any of the following criteria:

a Oil and gas blocks are located in deep-water, offshore areas, areas with extremely difficult geographical conditions or areas with complex geological conditions;

b/ Oil and gas blocks have been put up for bidding under the conditions applicable to oil and gas blocks eligible for investment incentives, but no contractors or investors have submitted bid dossiers;

c/ Oil and gas blocks are formed from areas relinquished under oil and gas contracts applicable to oil and gas blocks eligible for investment incentives;

d/ Oil and gas blocks eligible for investment incentives are relinquished by contractors before the expiry of oil and gas contracts;

dd/ Oil and gas blocks are formed from relinquished areas as specified in Point c and oil and gas blocks relinquished by contractors as specified in Point d of this Clause;

e/ Marginal oil and gas fields are located within ordinary oil and gas blocks or oil and gas blocks eligible for investment incentives covered by oil and gas contracts that remain in effect;

g/ Upon the expiry of oil and gas contracts, production at oil and gas fields within ordinary oil and gas blocks or oil and gas fields within oil and gas blocks eligible for investment incentives can be continued but fails to achieve the minimum investment efficiency under the economic and technical conditions of the signed oil and gas contracts;

h/ Oil and gas blocks contain unconventional oil and gas plays;

i/ Other cases involving national defence, security or foreign relations, as decided by the Prime Minister.

3. The Prime Minister shall promulgate a list of oil and gas blocks and fields eligible for investment incentives or special investment incentives.

4. In case there is a change in the incentive policies applicable to marginal oil and gas fields on the list of oil and gas blocks and fields promulgated by the Prime Minister under Clause 3 of this Article and covered by oil and gas contracts that remain in effect, procedures for modification of such list are not required.

5. The Government shall detail this Article.

Article 42. Incentive policies

1. Incentive policies applicable to oil and gas blocks and fields shall be implemented through oil and gas contracts.

2. Oil and gas contracts for oil and gas blocks and fields eligible for investment incentives will be entitled to a corporate income tax rate of 32%, a crude oil export duty rate of 10%, and a cost recovery limit of up to 70% of the annual oil and gas production volume.

3. Oil and gas contracts for oil and gas blocks and fields eligible for special investment incentives will be entitled to a corporate income tax rate of 25%, a crude oil export duty rate of 5%, and a cost recovery limit of up to 80% of the annual oil and gas production volume.

4. The Prime Minister shall decide on the application of other investment incentives when it is necessary to encourage the development of particularly important oil and gas projects.

Article 43. Investment incentives for the development of marginal oil and gas fields

1. For a marginal oil and gas field of an ordinary oil and gas block under an oil and gas contract in force and, upon reaching the field development stage, if the development of such oil and gas field fails to achieve the minimum economic efficiency, the contractor may propose the investment incentive policies provided in Clause 2, Article 42 of this Law.

2. For a marginal oil and gas field of an ordinary oil and gas block or an oil and gas block entitled to investment incentive policies under an oil and gas contract in force, upon reaching the field development stage, if the development of such oil and gas field fails to achieve the minimum economic efficiency required by the investment incentive policies, the contractor may propose the special investment incentive policies provided in Clause 3, Article 42 of this Law.

3. For a marginal oil and gas field of an ordinary oil and gas block, an oil and gas block entitled to investment incentive policies, or an oil and gas block entitled to special investment incentive policies under an oil and gas contract in force, upon reaching the field development stage, if the development of such oil and gas field fails to achieve the minimum economic efficiency required by the special investment incentive policies, the contractor may propose the following incentive policies:

a/ Tax incentive levels under the special investment incentive policies provided in Clause 3, Article 42 of this Law;

b/ After fulfilling the royalties and export duty obligations (if any), the contractor is entitled to use the whole of the remaining oil and gas quantity to recover costs of oil and gas activities of such oil and gas field, starting from the time the oil and gas field development plan is approved;

c/ After fully recovering the costs incurred that are permitted for recovery and fulfilling tax obligations under regulations, the contractor is entitled to the whole of the remaining oil and gas quantity.

4. In case the marginal oil and gas field specified in Clause 3 of this Article belongs to an oil and gas block having other oil and gas fields, the contractor may propose the application of the incentive policies specified in Clause 3 of this Article or an additional cost recovery level not exceeding 10% of the cost recovery level of the oil and gas contract in force in order to recover costs for oil and gas activities of the marginal oil and gas field.

5. The Vietnam National Industry-Energy Group shall consider and appraise the oil and gas field development plan for development of marginal oil and gas fields in accordance with the policies specified in Clauses 1, 2, 3 and 4 of this Article for use as a basis for proposing the modification of contents of oil and gas contracts under Article 18 of this Law.

6. The Government shall detail this Article.

Article 44. Investment incentives for raising the oil and gas recovery factor

1. In case of applying a solution or technology to raise the oil and gas recovery factor, the contractor may propose the application of an additional cost recovery level not exceeding 10% of the cost recovery level of the oil and gas contract in force in order to recover costs of activities of raising the oil and gas recovery factor from the time the modified oil and gas field development plan is approved. After such costs are fully recovered, the cost recovery level must comply with the oil and gas contract.

2. The Vietnam National Industry-Energy Group shall consider and appraise the modified oil and gas field development plan in accordance with this Law for the application of a solution or technology to raise the oil and gas recovery factor as a basis for proposing the modification of contents of the oil and gas contract under Article 18 of this Law.

3. The Government shall detail this Article.

Article 45. Policies on exploitation of natural resources applicable to oil and gas fields, field clusters and blocks under tail-end production

1. Policies on exploitation of natural resources applicable to oil and gas fields, field clusters and blocks under tail-end production shall be implemented as follows:

a/ The difference between revenues and costs of exploitation of natural resources applicable to oil and gas fields, field clusters and blocks under tail-end production shall be remitted into the state budget in adherence to the principle of ensuring the efficiency of tail-end production and strict control of costs of oil and gas activities; and is exempted from crude oil export duty (if any);

b/ Operators of projects on tail-end production for oil and gas fields, field clusters and blocks may use free of charge information, data, documents, specimens, supplies in stock, oil and gas installations and other assets that have been installed and invested to serve oil and gas activities under terminated oil and gas contracts for conducting tail-end production;

c/ The additional investment in the exploitation of natural resources for oil and gas fields, field clusters and blocks under tail-end production, the decommissioning of oil and gas installations and the handling measures after the decommissioning when exploitation is completed must comply with this Law and on the basis of balancing revenues from tail-end production for oil and gas fields, field clusters and blocks.

d/ The fund for securing the performance of oil and gas installation decommissioning obligations shall be received by the Vietnam National Industry-Energy Group from contractors with additional deductions set aside in accordance with this Law to perform oil and gas installation decommissioning obligations. In case the balance of the fund for securing the performance of oil and gas installation decommissioning obligations of projects on tail-end production for oil and gas fields, field clusters and blocks is insufficient to cover actual costs of the decommissioning activities, the deficit shall be made up for under Point c, Clause 4, Article 60 of this Law.

2. The Government shall detail this Article.

Chapter VII

ACCOUNTING, AUDITING AND ACCOUNT-FINALISATION OF COSTS OF OIL AND GAS ACTIVITIES

Article 46. Financial and accounting work

1. Accounting work for oil and gas activities shall be carried out under oil and gas contracts, in accordance with Vietnam’s law, and in conformity with international oil and gas industry practices.

2. Corporate income tax on oil and gas activities shall be determined on the basis of oil and gas contracts in accordance with this Law and the Law on Corporate Income Tax, regardless of production and business results (loss or profit) of enterprises entering into oil and gas contracts.

3. For oil and gas fields of oil and gas blocks for which oil and gas contracts have been signed under Articles 43 and 44 of this Law, the accounting and tax declaration and payment shall be carried out for each field and under oil and gas contracts.

4. Commissions, training costs, minimum financial commitments, compensations for failure to fully perform minimum commitments, fee for reading and use of oil and gas documents, the oil and gas scientific research and technology development fund, and the fund for securing the performance of oil and gas installation decommissioning obligations shall be paid or executed by the contractor in US dollars.

Article 47. Auditing and account-finalisation of costs of oil and gas activities

1. The Vietnam National Industry-Energy Group shall conduct annual auditing of oil and gas activities under oil and gas contracts, upon the completion of a stage, or upon the termination of oil and gas contracts in accordance with the oil and gas contracts and relevant laws.

2. Auditing activities must adhere to the principle that costs are reflected truthfully, fully, reasonably and validly in accordance with oil and gas contracts and Vietnam’s law.

3. The account-finalisation of costs of oil and gas activities shall be carried out on the basis of results of the auditing of costs of oil and gas activities in compliance with oil and gas contracts. The Vietnam National Industry-Energy Group shall organise the verification and approval of reports on account-finalisation of costs of oil and gas activities prepared and submitted by contractors. The Vietnam National Industry-Energy Group may hire independent auditors to audit such reports.

Chapter VIII

FRAMEWORK REGULATIONS ON CCS ACTIVITIES ASSOCIATED WITH OIL AND GAS ACTIVITIES AND THE DEVELOPMENT OF OFFSHORE ENERGY STRUCTURES ASSOCIATED WITH OIL AND GAS ACTIVITIES

Section 1

FRAMEWORK REGULATIONS ON CCS ACTIVITIES ASSOCIATED WITH OIL AND GAS ACTIVITIES

Article 48. Policies on CCS activities associated with oil and gas activities

1. The State shall encourage Vietnamese and foreign organisations and individuals to invest in, research and deploy CCS activities associated with oil and gas activities in Vietnam in order to reduce carbon emissions in potential areas, deep-water areas and offshore areas, thereby contributing to national economic development and protecting Vietnam’s legitimate rights and interests in accordance with treaties to which the Socialist Republic of Vietnam is a contracting party.

2. The State shall promote the sharing and use of information, data, documents and samples collected in the course of basic oil and gas investigations and oil and gas activities for research, evaluation and deployment of CCS activities in accordance with law.

3. The State shall promote the utilisation of oil and gas installations of existing oil and gas fields and appropriate CO₂ storage geological formations to carry out CCS activities for CO₂ emissions generated from oil and gas activities and other emission activities.

Article 49. Principles for deploying CCS activities associated with oil and gas activities

1. The deployment of CCS activities associated with oil and gas activities must comply with this Law, the law on environmental protection, the law on marine and island resources and environment, and other relevant laws.

2. Upon the termination of CCS activities, contractors shall carry out activities for well abandonment and decommissioning of CCS structures.

3. Following the decommissioning of CCS structures, contractors shall monitor, observe, and ensure the safety of CO2 storage facilities, and remedy leakage and environmental pollution incidents (if any) within the time limit specified by the Government at their own expense before handing such facilities back to the Vietnam National Industry-Energy Group for management.

4. The Government shall detail this Article.

Article 50. Implementation of CCS activities associated with oil and gas activities

1. Based on information collected in the course of implementing oil and gas activities, contractors may propose adding the provisions on CCS activities to the signed oil and gas contracts. The Vietnam National Industry-Energy Group shall consider contractors’ proposal together with reports on CO₂ storage potential assessment or outline plans on deployment of CCS activities under Clause 4 of this Article or plans on deployment of CCS activities under Clause 5 of this Article, and report to the state management agency in charge of oil and gas for approval the modification of oil and gas contracts, and issue modified investment registration certificates under Article 18 of this Law. The deployment of CCS activities must not affect oil and gas activities.

2. A contractor may carry out CCS activities:

a/ Within the area of the existing oil and gas contract;

b/ In case the geological formation for CO₂ storage or CO₂ injection zone extends beyond the area of the existing oil and gas contract into an adjacent open block, the contractor may propose expanding the contract area for CO₂ storage purpose;

c/ In case the geological formation for CO₂ storage or CO₂ injection zone extends beyond the area of the existing oil and gas contract into a block of an oil and gas contract in force, the contractors of the related oil and gas contracts shall reach an agreement and report such to the state management agency in charge of oil and gas.

3. Contractors may apply the financial mechanisms specified in Article 51 of this Law to deploy CCS activities associated with oil and gas activities.

4. Contractors shall formulate outline plans on deployment of CCS activities within outline plans on development of oil and gas fields or modified outline plans on development of oil and gas fields as specified in Article 35 of this Law, or formulate separate outline plans on deployment of CCS activities.

5. Contractors shall include plans on deployment of CCS activities in plans on development of oil and gas fields or modified plans on development of oil and gas fields as specified in Article 37 of this Law, or formulate separate plans on deployment of CCS activities.

6. Contractor shall include plans on decommissioning of CCS structures in plans on decommissioning of oil and gas installations or modified plans on decommissioning of oil and gas installations as specified in Article 39 of this Law, or formulate separate plans on decommissioning of CCS structures.

7. Upon the termination of oil and gas production activities under oil and gas contracts, the continued deployment of CCS activities must comply with the Government’s regulations.

8. The Government shall detail this Article.

Article 51. Financial mechanisms for CCS activities associated with oil and gas activities

1. Contractors deploying CCS activities have the right to own, exchange and trade in carbon credits in accordance with the law on environmental protection.

2. Proceeds from the sale of carbon credits shall be accounted as a reduction in recovered costs.

3. Costs of the implementation of CCS activities constitute costs of oil and gas activities of oil and gas contracts that are permitted for recovery.

4. The Government shall detail this Article.

Section 2

DEVELOPMENT OF OFFSHORE ENERGY STRUCTURES ASSOCIATED WITH OIL AND GAS ACTIVITIES

Article 52. Development of offshore energy structures associated with oil and gas activities

1. The State shall encourage Vietnamese and foreign organisations and individuals, and existing contractors to conduct basic oil and gas investigations and oil and gas activities combined with research and basic investigation serving the development of offshore energy, thereby contributing to ensuring national energy security and national economic development.

2. Contractors may research and deploy offshore energy structures within the field development area of existing oil and gas contracts, utilise existing oil and gas installations, or integrate them into the construction of new oil and gas installations in order to meet the need for oil and gas activities of existing oil and gas fields and adjacent oil and gas fields, aiming to increase economic efficiency.

3. Costs of deployment of offshore energy structures serving oil and gas activities as specified in Clause 2 of this Article shall be included in costs of oil and gas activities of oil and gas contracts that are permitted for recovery.

4. In the course of deploying oil and gas activities, contractors under oil and gas contracts may propose the development of offshore energy projects within the area of oil and gas contracts and organise the implementation of independent offshore energy projects in accordance with relevant laws, causing no adverse impact on oil and gas activities.

Chapter IX

HI-TECH OIL AND GAS TECHNICAL SERVICES ASSOCIATED WITH OIL AND GAS ACTIVITIES

Article 53. Hi-tech oil and gas technical services associated with oil and gas activities

1. The State shall adopt priority policies and promote research, development, testing, application and transfer of technologies to perform hi-tech oil and gas technical services serving basic oil and gas investigations and oil and gas activities as soon as such products and services satisfy one of the following criteria:

a/ Satisfying specific technical requirements in basic oil and gas investigations and oil and gas activities;

b/ Being capable of substituting imported products and services or going to the international market;

c/ Contributing to the development of the domestic supply chain of hi-tech oil and gas technical services, and improving the competitiveness and economic efficiency of the oil and gas industry.

2. The production and manufacturing and provision of hi-tech oil and gas technical products and services specified in Clause 1 of this Article will be entitled to incentives provided by the laws on investment, tax and land, and other relevant laws.

3. The import of specialised machinery, supplies, equipment and spare parts that cannot yet be produced domestically for direct use in the research, development, testing, production and manufacturing and provision of hi-tech oil and gas technical service products and services will be exempt from import duty in accordance with the law on export duty and import duty.

4. The Government shall detail this Article.

Chapter X

RIGHTS AND OBLIGATIONS OF CONTRACTORS

Article 54. Rights of contractors

1. Contractors have the following rights:

a/ To enjoy investment incentives and guarantees provided by Vietnam’s law;

b/ To use collected samples, information and data to carry out oil and gas activities;

c/ To recruit employees with priority given to Vietnamese nationals;

d/ To hire organisations and individuals to provide oil and gas services and goods serving oil and gas activities in accordance with this Law and in conformity with international oil and gas industry practices;

dd/ To be entitled to import duty and export duty exemption for oil and gas activities in accordance with the Law on Export Duty and Import Duty;

e/ To own the oil and gas products and other products extracted under oil and gas contracts after fulfilling financial obligations in accordance with law; to jointly sell these products on a shipment-by-shipment and time-by-time basis without being deemed as violating the competition law;

g/ To export and sell in the Vietnamese market the products under their ownership as agreed in oil and gas contracts, unless they are obliged to sell products in the Vietnamese market under Clause 9, Article 55 of this Law. Contractors are not required to obtain export licenses when exporting products under their ownership;

h/ To recover costs of oil and gas activities as agreed in oil and gas contracts;

i/ To access and use existing transport systems, infrastructure, and oil and gas installations in accordance with law; to access and use existing infrastructure and oil and gas installations to serve the implementation of oil and gas activities under contracts or agreements with owning or operation management units of such infrastructure and oil and gas installations on the basis of ensuring interests of the parties in accordance with relevant laws;

k/ To purchase foreign currencies or authorise operators to purchase foreign currencies from commercial banks to make capital contributions for participation in oil and gas contracts and perform the state budget remittance obligation;

l/ To take over existing oil and gas installations and assets installed or invested within the area of oil and gas contracts for operation without having to make payment to conduct oil and gas activities based on new oil and gas contracts;

m/ The rights provided in Chapter VIII of this Law upon the deployment of CCS activities and offshore energy structures associated with oil and gas activities;

n/ Other rights provided by this Law.

2. In addition to the rights specified in Clause 1 of this Article, contractors being foreign organisations or individuals have the following rights:

a/ To open accounts in Vietnam and foreign countries in accordance with the law on foreign exchange management;

b/ To remit lawful income amounts generated from oil and gas activities under oil and gas contracts abroad in accordance with the law on foreign exchange management and relevant regulations after fulfilling their financial obligations as specified by law;

c/ To purchase foreign currencies from commercial banks to execute current transactions and other licensed transactions in accordance with the law on foreign exchange management;

d/ To contribute capital in Vietnam dong or foreign currency in conformity with actual needs and terms of oil and gas contracts.

Article 55. Obligations of contractors

1. To perform their commitments and financial obligations under oil and gas contracts.

2. To declare and pay taxes, charges and fees in accordance with Vietnam’s law.

3. To transfer technology, provide training, prioritise the employment of Vietnamese nationals, and ensure the legitimate and lawful rights and interests of employees.

4. To comply with regulations on national defence and national security; to implement environmental protection and safety measures in oil and gas activities; to comply with regulations and guidance of related state management agencies regarding cost norms and techno-economic norms, conform to national technical regulations, and apply standards that are compliant with Vietnam’s law and international oil and gas industry practices.

5. To report on oil and gas activities to competent state management agencies and the Vietnam National Industry-Energy Group, and report to competent tax authorities in accordance with the tax laws upon the occurrence of transfer transactions that change the ownership of contractors currently holding participating interests in oil and gas contracts in Vietnam.

6. To be responsible for progress, safety and quality of the deployment of oil and gas activities in accordance with this Law; the appraisal and approval by state management agencies and the Vietnam National Industry-Energy Group may not replace or diminish contractors’ responsibility.

7. To provide necessary documents to examination teams and inspection teams of functional authorities upon request.

8. To decommission structures, equipment and means upon the termination of oil and gas activities.

9. When requested by the Government, to sell in the Vietnamese market the following products:

a/ The natural gas volumes under their ownership as agreed in gas production development projects;

b/ The crude oil volumes under their ownership at selling prices determined in adherence to the principles of transparency and conformity with international market prices.

10. To transfer capital contributions into joint accounts opened by operators or operators’ executive offices in Vietnam for making payments serving oil and gas activities under oil and gas contracts.

11. To share the use of existing infrastructure and oil and gas installations with third parties on the basis of contracts or agreements between the parties provided that such use does not affect oil and gas activities and is compliant with Vietnam’s law and international oil and gas industry practices.

12. To create conditions for organisations and individuals to carry out scientific research, prospecting, exploration and exploitation of minerals and natural resources other than oil and gas within the area of oil and gas contracts in accordance with Vietnam’s law and in adherence to the principles of neither obstructing oil and gas activities nor causing damage to humans, property or the environment.

13. To organise the selection of contractors to provide oil and gas services and goods serving oil and gas activities on the basis of adhering to principles of competition, fairness, transparency and efficiency and compliance with oil and gas contracts; to report to the Vietnam National Industry-Energy Group on the organisation of the selection of contractors to provide oil and gas services and goods serving oil and gas activities under oil and gas contracts.

14. The obligations specified in Chapter VIII of this Law upon the deployment of CCS activities and offshore energy structures associated with oil and gas activities.

15. Other obligations as specified by this Law and other relevant laws.

Chapter XI

FUNCTIONS, RIGHTS AND OBLIGATIONS OF THE VIETNAM NATIONAL INDUSTRY-ENERGY GROUP IN BASIC OIL AND GAS INVESTIGATIONS AND OIL AND GAS ACTIVITIES

Article 56. Functions of the Vietnam National Industry-Energy Group in basic oil and gas investigations and oil and gas activities

1. To conduct basic oil and gas investigations in accordance with this Law.

2. To carry out oil and gas activities in the capacity as an investor in the following cases:

a/ A contractor entering into an oil and gas contract under Article 28 of this Law;

b/ A contractor entering into an oil and gas contract for oil and gas blocks related to national defence, security and foreign affairs.

3. To perform assigned functions in accordance with this Law, including:

a/ Signing agreements on basic oil and gas investigations with organisations other than state agencies and state enterprises that assume the prime responsibility for implementing basic oil and gas investigation schemes after such schemes are approved;

b/ Organising the selection of contractors for entering into oil and gas contracts; entering into oil and gas contracts with organisations and individuals; exercising rights and performing obligations of the host country in the course of performance of oil and gas contracts; supervising oil and gas activities; exercising the participation right and the right of first refusal for part or the whole of the contractor’s interests in an oil and gas contract, even in special cases;

c/ Receiving, supervising and operating oil and gas fields, field clusters and blocks from contractors upon the expiration of the time limit for selecting contractors to enter into new oil and gas contracts;

d/ Conducting exploitation activities for oil and gas fields, field clusters and blocks under tail-end production according to natural resource exploitation policies;

dd/ Supervising CCS activities and offshore energy structures associated with oil and gas activities under Chapter VIII of this Law.

Article 57. Rights of the Vietnam National Industry-Energy Group

1. To conclude agreements with organisations other than state agencies and state enterprises that assume the prime responsibility for implementing basic oil and gas investigation schemes; to manage and supervise the implementation of agreements related to the exploitation of basic oil and gas investigation information, data and results in accordance with this Law and other relevant laws.

2. To enter into oil and gas contracts with organisations and individuals to carry out oil and gas activities in accordance with this Law and other relevant laws.

3. To manage and supervise the performance of oil and gas contracts; to approve annual operation programs and operation budgets; to audit oil and gas activities under oil and gas contracts and relevant regulations.

4. To approve schemes, reports, plans, programmes and proposals on oil and gas activities submitted by contractors in accordance with this Law.

5. To supervise the engineering and construction of oil and gas installations under oil and gas contracts.

6. To organise the sale of host countries’ share of products and be permitted to jointly sell these products with other contractors under oil and gas contracts under Point e, Clause 1, Article 54 of this Law.

7. To manage and administer oil and gas activities; to carry out tail-end production and make additional investments to exploit natural resources for oil and gas fields, field clusters and blocks under tail-end production, and monitor and use assets related to the takeover of contractors’ participating interests and the takeover of oil and gas fields, field clusters and blocks in accordance with this Law.

Article 58. Obligations of the Vietnam National Industry-Energy Group

1. To organise the management, operation, and rational and efficient exploitation of oil and gas resources, protect natural resources and the environment, and ensure safety in oil and gas activities.

2. To organise the management, retention, preservation and use of oil and gas information, data, documents and specimens, and basic oil and gas investigation results provided by organisations other than state agencies and state enterprises assuming the prime responsibility for basic oil and gas investigation; information, data, documents and specimens obtained in the course of deployment of oil and gas activities and upon the completion of oil and gas contracts; to guarantee the right of organisations and individuals to access oil and gas documents, information and data, and results of basic oil and gas investigations and oil and gas activities.

3. To manage and supervise the implementation of basic oil and gas investigation agreements related to the exploitation of information, data, and basic oil and gas investigation results in accordance with law and signed agreements.

4. To manage and supervise the performance of oil and gas contracts in a strict and efficient manner in accordance with law and oil and gas contracts.

5. To take responsibility for results of the approval and acceptance of contents in oil and gas activities under its competence in accordance with this Law.

6. To summarise periodical investment monitoring reports on oil and gas projects in the territory of Vietnam; to report on oil and gas activities to competent state management agencies on a periodical basis or upon request.

7. To propose solutions and coordinate with competent state management agencies upon the latter’s request in formulating policies, strategies and orientations related to the rational and efficient exploitation of oil and gas resources, protection of natural resources and the environment, and sustainable development.

8. On behalf of the host country, to perform obligations towards the state budget under oil and gas contracts and the tax laws.

9. To periodically report to the state management agency in charge of oil and gas on matters delegated to it for acceptance or approval in accordance with this Law for inspection and supervision under the Government’s regulations.

Article 59. Approval of the use of capital by the Vietnam National Industry-Energy Group and enterprises with 100% of charter capital held by the Vietnam National Industry-Energy Group in oil and gas activities

The Members’ Council of the Vietnam National Industry-Energy Group shall:

1. Approve the use of capital by the Vietnam National Industry-Energy Group and enterprises with 100% of charter capital held by the Vietnam National Industry-Energy Group, regardless of their capital contribution amounts, after being approved in accordance with this Law in the following cases:

a/ They exercise the right to participate in oil and gas contracts and the right of first refusal for part or the whole of participating interests under Article 28 of this Law;

b/ They carry out oil and gas activities in different phases of oil and gas contracts and oil and gas projects;

2. Approve the termination of unsuccessful oil and gas projects of the Vietnam National Industry-Energy Group and enterprises with 100% of charter capital held by the Vietnam National Industry-Energy Group;

3. Report to the owner’s representative agency on approved contents under Clauses 1 and 2 of this Article for monitoring, inspection and supervision.

Article 60. Handling of costs payable by the Vietnam National Industry-Energy Group

1. Costs of basic oil and gas investigations conducted by the Vietnam National Industry-Energy Group outside the state budget funds (if any) shall be paid with after-tax profits of the Vietnam National Industry-Energy Group.

2. Costs of unsuccessful investment in oil and gas projects of the Vietnam National Industry-Energy Group, following a decision by the Members’ Council of the Vietnam National Industry-Energy Group on the termination of the oil and gas project and account-finalisation of costs, may not be deducted upon the determination of taxable income in accordance with the law on corporate income tax and may be offset with annual after-tax profits of the Vietnam National Industry-Energy Group.

3. The costs specified in Clauses 1 and 2 of this Article shall be paid with after-tax profits of the Vietnam National Industry-Energy Group before funds are set aside in accordance with the law on management and investment of state capital in enterprises.

4. The Vietnam National Industry-Energy Group may use proceeds from the sale of the host country’s share of oil and gas products divided from oil and gas contracts before determining the host country’s profits to be remitted into the state budget for offsetting and paying the following costs and obligations:

a/ Costs related to the sale and consumption of the host country’s oil and gas products on the basis of relevant trade agreements falling under the responsibility of the host country performed on its behalf by the Vietnam National Industry-Energy Group;

b/ Financial obligations for the host country’s share of oil and gas from oil and gas contracts performed on its behalf by the Vietnam National Industry-Energy Group;

c/ Deficient costs of the decommissioning of oil and gas installations for projects on tail-end production for oil and gas fields, field clusters and blocks in case the balance of the fund for securing the performance of oil and gas installation decommissioning obligations is insufficient for fulfilment of the obligation;

d/ Costs of the management and supervision of oil and gas contracts;

dd/ Costs of the maintenance of oil and gas contracts in case of takeover of participating interests from contractors for special reasons or performance of tasks assigned by the Prime Minister in relation to oil and gas activities.

5. The Government shall detail this Article.

Chapter XII

IMPLEMENTATION PROVISIONS

Article 61. Effect

1. This Law takes effect on March 1, 2027.

2. Law No. 12/2022/QH15 on Oil and Gas ceases to be effective on the effective date of this Law, except the cases specified in Clause 3 of this Article and Clauses 3, 4 and 5, Article 62 of this Law.

3. Clause 2, Article 67 of Law No. 12/2022/QH15 on Oil and Gas, amending and supplementing Clause 1, Article 3 of Law No. 45/2009/QH12 on Royalties, which has a number of articles amended and supplemented under Law No. 71/2014/QH13, remains in effect until being amended, supplemented, replaced or annulled.

Article 62. Transitional provisions

1. Contractors entering into oil and gas contracts for which/whom investment registration certificates are issued before the effective date of this Law may continue performing such contracts in accordance with the issued investment registration certificates.

2. Oil and gas schemes, reports, plans and programmes approved before the effective date of this Law may continue to be implemented in accordance with approved contents without being required to add this Law’s relevant provisions.

3. Oil and gas schemes, reports, plans, programmes and contracts submitted to competent authorities before the effective date of this Law are not required to be re-submitted and shall be appraised and approved in accordance with law before the effective date of this Law.

4. Tail-end production operations under administration mechanisms approved before the effective date of this Law shall continue to be carried out under issued decisions and relevant regulations before the effective date of this Law.

5. The settlement of costs currently carried out by the Vietnam National Industry-Energy Group must continue to comply with law before the effective date of this Law.

6. Financial obligations for the host country’s share of oil and gas from oil and gas contracts performed the Vietnam National Industry-Energy Group on the former’s behalf before the effective date of Law No. 12/2022/QH15, with costs thereof remaining unsettled before the effective date of this Law, shall be performed under Clause 4, Article 60 of this Law after obtaining approval from competent authorities.

This Law was passed on August 23, 2026, by the 16^th National Assembly of the Socialist Republic of Vietnam, at its first extraordinary session.

President of the National Assembly
TRAN THANH MAN