The Government recently issued Decree No 95/2015/ND-CP (October 16, 2015) on implementation of a number of articles of Law on Petroleum. The Decree applies to organisations and individuals conducting petroleum operations and relating to petroleum operations in Viet Nam.

Petroleum contract and investment registration certificate

1. Vietnamese and foreign organizations and individuals conduct petroleum exploration and production based on the petroleum contract ("PC") or other agreement entered with Vietnam Oil and Gas Group (PVN) or Viet Nam's Government. Additionally, PVN also may directly conduct petroleum exploration and production. PC is entered in the form of petroleum sharing contract or other form agreed between petroleum contractor ("Contractor") and PVN and approved by Prime Minister ("PM"). Within 10 working days after receipt of executed PC submitted by PVN, the Ministry of Industry and Trade (MoIT) will review and issue an investment registration certificate ("IRC").

2. For security and national defence, upon receipt of the Contractor's request for assignment of participating interests in the PC, PVN must report to MoIT a list of and its preliminary assessment on the organisations and individuals receiving the assignment. MoIT will review and issue amended IRC within 10 working days after receipt of PM approval of assignment proposal.

3. If the Contractor's merger, acquisition, split, change of name, change of company nationality, or others cause changes of the Contractor's significant information in IRC or PC, the Contractor must register for IRC amendment, except changes of address, legal representative, or ownership.

In case of changing address or legal representative, the Contractor must notify MoIT, PVN, and contractors specified in PC.

In case of changing ownership, the Contractor must report the change to MoIT and PVN. Additionally, the Contractor must provide the new owner's parent company guarantee, which must be approved by PVN.

Petroleum operations

1. Petroleum safety requirements. The Contractor must carry out the safety works such as establishment of the safety zone and maintenance of safety signals for petroleum structures, machinery and equipment and meet other safety requirements. From time to time the Contractor must prepare a safety management and risk evaluation program including mitigation plan, an emergency response plan, and an environmental impact assessment; and then submit the same to the competent authorities for approval.

2. Supply of petroleum services and goods. Organisations and individuals conducting petroleum operations are entitled to enter into petroleum services contract or purchase contract with subcontractors or other organisations and individuals to support petroleum operations under PC and the principles: (i) ensuring effective investment of the project, and publicity and transparency during bidding and contract execution; (ii) complying with specifications of petroleum industry; and (iii) using Vietnamese organisations and individuals' petroleum services and goods based on competitiveness of price, quality and schedule.

3. Selling crude oil and natural gas in Vietnamese market. The Contractor, at the request of the Viet Nam Government, must sell (i) a portion or all of its crude oil with internationally competitive price; and (2) a portion or all of its natural gas based on agreement in gas development and production projects in Vietnamese market.

Petroleum reserves report and field development plan

1. Petroleum reserves report. Within 90 days after commercial discovery declaration, the Contractor and PVN must submit the report on petroleum reserves to MoIT and the evaluation council for petroleum reserves reports ("Evaluation Council"). Within 30 days after receipt of the complete dossier, MoIT and the Evaluation Council will organise the evaluation of the petroleum reserves report and submit the result to PM for approval.

2 Field Development Plan (FDP). FDP is prepared on the basis of the approved outline development plan (ODP) or the update of early production plan. Within18 months after the ODP is approved or 6 months prior to the expiry of early production scheme, the Contractor and PVN must submit FDP to MoIT and the Evaluation Council. Within 30 days after receipt of the complete dossier, MoIT and the Evaluation Council will evaluate FDP and submit the result to PM for approval.

Abandonment plan and fund

1. The Contractor must prepare a plan for removal of fixed installations, equipment and facilities used for petroleum operations and also establish an abandonment fund and then submit the same to MoIT for approval.

2. Establishing the abandonment fund as a financial obligation security is a requirement to the Contractor, except PC has different provisions on the subject matter. The abandonment fund is established within one year after the date of commencement of commercial production, and managed by PVN. Particularly, PVN will deposit the amount of abandonment fund in a separate interest-bearing account at a credit institution in Viet Nam having the highest reputation level as assessed by the State Bank of Viet Nam.

The Decree takes effect on December 1, 2015 and replaces the Government Decrees No 48/2000/ND-CP (September 12, 2000), 34/2001/ND-CP (July 6, 2001), 115/2009/ND-CP (December 24, 2009).

MAI COUNSEL