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THE NATIONAL ASSEMBLY
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
19/2000/QH10
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Hanoi, June 09, 2000
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LAW
AMENDING AND SUPPLEMENTING A NUMBER OF
ARTICLES OF THE PETROLEUM LAW
Pursuant to the 1992 Constitution of the
Socialist Republic of Vietnam;
This Law amends and supplements a
number of articles of the Petroleum Law passed on July 6, 1993 by the National
Assembly of the Socialist Republic of Vietnam,
Article 1.- To amend and supplement a number of articles of
the Petroleum Law as follows:
1. To add Article 2a as follows:
"Article 2a.-
Petroleum activities must comply with the
provisions of the Petroleum Law and other relevant provisions of Vietnamese
law.
In case of any discrepancy between the
provisions of the Petroleum Law and other provisions of Vietnamese law on the
same specific matter related to petroleum activities, the Petroleum Law’s provisions shall apply.
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2. To add Points 11 and 12 to Article 3, as
follows:
"11. Executors are organizations and/or
individuals representing the parties to a petroleum contract and executing
activities within the authorized scope.
12. Petroleum investment promotion projects are
projects conducting petroleum activities in deep-water and offshore areas and
areas with exceptionally difficult geographical and geological conditions
according to the list of blocks decided by the Prime Minister."
3. Article 15 is amended and supplemented as
follows:
"Article 15.-
A petroleum contract may be signed in the form
of product-sharing contract, joint-venture contract or other contractual forms.
A petroleum contract must be in conformity with
the model contract issued by the Vietnamese Government with the following
principal contents:
1. Legal status of organizations and/or
individuals that shall jointly sign the contract;
2. The contract’s
object(s);
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4. The contract’s
duration;
5. Conditions for termination of the contract
ahead of time or for the extension of the contract;
6. Commitments on working tempo and financial
investment;
7. Rights and obligations of the contractual
parties;
8. The recovery of investment capital,
determination and distribution of profits; the host country’s right over fixed assets after the capital
recovery and the contract termination;
9. Conditions for the assignment of rights
and/or obligations of the contractual parties; the right of the Vietnam Oil and
Gas Corporation to contribute investment capital;
10. Commitments on training and priority given
to the employment of Vietnamese laborers and the use of Vietnamese services;
11. Responsibilities to protect the environment
and ensure safety while conducting petroleum activities;
12. Methods of settling disputes which may arise
from the contract and applicable laws.
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The parties to a petroleum contract may agree to
nominate a party from among them to act as the executor or hire an executor or
establish a joint-execution company according to the Vietnamese Government’s regulations.
In cases where they obtain the Prime Minister’s consent, the parties to the petroleum contract
may agree not to apply the model contract, but the contract to be signed must
contain the principal contents prescribed in this Article."
4. Article 16 is amended and supplemented as
follows:
"Article 16.-
Organizations and/or individuals wishing to sign
petroleum contracts shall have to go through biddings under the specific
regulations on bidding for projects on petroleum prospection, exploration and
exploitation, promulgated by the Vietnamese Government.
In special cases, the Prime Minister may appoint
bidders in order to select partners for signing petroleum contracts."
5. Article 17 is amended and supplemented as
follows:
"Article 17.-
The term of a petroleum contract shall not
exceed twenty five (25) years, of which the prospection and exploration period
shall not exceed five (5) years.
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The term of a petroleum contract may be
extended, but for not more than five (5) years. The prospection and exploration
period may also be extended, but for not more than two (2) years.
If discovering gas with commercial value, while
lacking the consumption market as well as conditions on pipelines and suitable
treatment facilities, contractors may retain the areas where gas is found. The
duration of retention of such an area shall not exceed five (5) years and may,
in special cases, be extended for two (2) more years. Pending the consumption
market and the conditions on pipelines and suitable treatment facilities, the
contractors shall have to proceed with the work already committed in the petroleum
contracts.
In force
majeure circumstances or other special cases, the parties to a petroleum
contract may agree upon the mode of temporary cessation of the exercise and
performance of a number of rights and obligations specified in the petroleum
contract. The temporary cessation period due to force majeure circumstances shall last till the disappearance of
such force majeure events. The
temporary cessation period in other special cases shall be specified by the
Vietnamese Government, but it must not exceed three (3) years.
The extended prospection and exploration period,
the period of retention of the area where gas with commercial value is found
and the period of temporary cessation of the exercise and performance of a
number of rights and obligations in a petroleum contract in force majeure circumstances or in
other special cases shall not be counted into the term of such petroleum
contract.
A petroleum contract may be terminated ahead of
time provided that the contractor has fulfilled its committed obligations and
such termination is agreed upon by the contractual parties.
6. Article 18 is amended as follows:
"Article 18.-
The prospection and exploration area for a
petroleum contract shall not cover more than two (2) blocks.
In special cases, the Vietnamese Government may
permit a prospection and exploration area for a petroleum contract to cover
more than two (2) blocks."
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"Article 19.-
The contractors shall have to return the
prospection and exploration areas according to the Vietnamese Government’s regulations.
Areas where temporary cessation agreements are
effected according to provisions of Article 17 of this Law shall not be
returned within the temporary cessation period."
8. To add Article 25a as follows:
"Article 25a.-
The parties to a petroleum contract may agree
upon a level of recovery of expenses for petroleum prospection, exploration,
field development and exploitation, of up to seventy percent (70%) of the
annual petroleum output for petroleum investment promotion projects, and up to
fifty percent (50%) for other projects, until the full recovery."
9. Article 27 is amended and supplemented as
follows:
"Article 27.-
Disputes arising from petroleum contracts must
be first of all settled through negotiations and conciliation.
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10. Article 28 is amended and supplemented as
follows:
"Article 28.-
1. A contractor shall have the following rights:
a/ To enjoy preferences and guarantees provided
for by the Vietnamese law;
b/ To use samples, data and information which
have been obtained for conducting petroleum activities;
c/ To recruit laborers to perform work of the
petroleum contract on the basis of preferential employment of Vietnamese
laborers;
d/ To hire sub-contractor(s) according to
provisions of this Law and in conformity with international practices of the
petroleum industry;
e/ To be exempted from import tax and export tax
according to provisions of Article 34 of this Law;
f/ To own its petroleum portion after fulfilling
the financial obligations toward the Vietnamese State;
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h/ To recover its investment capital as agreed
upon in the petroleum contract.
2. Contractors being foreign organizations or
individuals shall be entitled to open accounts in Vietnam and abroad; to
transfer abroad income from the sale of petroleum being part of recovered
expenses, profits and other lawful revenues earned in the course of petroleum
activities.
3. Contractors being foreign organizations or
individuals shall be entitled to buy foreign currencies at commercial banks to
meet requirements of current transactions and other permitted transactions
according to provisions of the legislation on foreign exchange management; and
to have foreign currency balance ensured for important projects."
11. Article 29 is amended and supplemented as
follows:
"Article 29.-
Sub-contractors shall enjoy rights prescribed at
Points a and c, Clause 1, Article 28 and Article 34 of this Law.
Sub-contractors being foreign organizations and
individuals shall be entitled to transfer abroad their recovered expenses and
profits earned in the course of petroleum service activities."
12. Article 30 is amended and supplemented as
follows:
"Article 30.-
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1. To comply with the Vietnamese law;
2. To fulfill its commitments inscribed in the
petroleum contract;
3. To pay taxes and fees as prescribed by the
Vietnamese law;
4. To transfer technologies; to train and employ
Vietnamese officials and workers, and to ensure laborers�
interests;
5. To apply measures for environmental
protection and ensuring of safety in petroleum activities;
6. To report petroleum activities to the
competent State management agency(ies) and the Vietnam Oil and Gas Corporation;
7. To supply necessary documents to inspection
delegations;
8. To remove and dismantle installations,
equipment and facilities upon the termination of petroleum activities at the
request of the competent State management agency(ies);
9. To sell on the Vietnamese market a portion of
crude oil under its ownership at the international competitive price at the
Vietnamese Government’s request and sell
natural gas on the basis of agreements in gas development and exploitation
projects."
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"Article 32.-
Organizations and individuals that exploit
petroleum must pay natural resources tax.
Natural resources tax shall be calculated
according to the actual exploitation output in the taxation period for each
petroleum contract.
Natural resources tax rate for crude oil shall
be set at between four percent (4%) and twenty five percent (25%).
Natural resources tax rate for natural gas shall
be set at between zero percent (0%) and ten percent (10%).
The Vietnamese Government shall prescribe
specific tax rates within tax rate bracket stipulated in this Article,
depending on the geographical, economic and technical conditions of petroleum
fields and crude oil or natural gas output."
14. Article 33 is amended and supplemented as
follows:
"Article 33.-
Organizations and individuals that conduct the
petroleum prospection, exploration and exploitation shall have to pay
enterprise income tax at the tax rate of fifty percent (50%).
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Organizations and individuals that conduct the
petroleum prospection, exploration and exploitation may be exempted from
enterprise income tax for a maximum period of two (2) years and entitled to the
fifty percent (50%) reduction of enterprise income tax for a maximum period of
two (2) subsequent years. The exemption or reduction of enterprise income tax
shall be provided for by the Vietnamese Government.
Profits for reinvestment shall not be subject to
reimbursement of enterprise income tax."
15. Article 34 is amended and supplemented as
follows:
"Article 34.-
Organizations and individuals that conduct the
petroleum activities shall have to pay export tax and import tax according to
provisions of the Law on Export Tax and Import Tax.
Equipment, machinery, spare parts and
specialized transport means, which are necessary for petroleum activities shall
be exempt from import tax.
Supplies necessary for petroleum activities
which cannot be produced at home, shall be exempt from import tax.
Goods temporarily imported for re-export in
service of petroleum activities shall be exempt from export tax and import tax.
Petroleum portion being part of natural
resources tax of the State shall not subject to export tax."
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"Article 35.-
In addition to taxes prescribed in Articles 32,
33 and 34 of this Law, organizations and individuals that conduct the petroleum
activities shall have to pay other taxes, rental for the use of land surface
and fees prescribed by the Vietnamese law. In cases where any changes in
provisions of Vietnamese law cause damage to the interests of organizations and
individuals that conduct the petroleum activities, the State shall take measures
to adequately settle the interests of such organizations and individuals
according to provisions of the Law on Foreign Investment in Vietnam.
Equipment, machinery, spare parts, specialized
transport means and supplies which need to be imported to conduct the
prospection, exploration and field development activities, which cannot be
produced at home, shall not be subject to value added tax.
Foreign organizations and individuals that
conduct petroleum activities shall have to pay tax on transfer of profits abroad
according to provisions of the Law on Foreign Investment in Vietnam."
17. Article 49 is amended and supplemented as
follows:
"Article 49.-
In cases where an international treaty which
Vietnam has signed or acceded to contains provisions different from those of
this Law, such international treaty’s
provisions shall apply."
Article 2.- This Law takes effect from July 1st, 2000.
Article 3.- The Government shall amend and supplement
documents detailing the implementation of the Petroleum Law to make them
consistent with this Law.
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CHAIRMAN OF THE NATIONAL ASSEMBLY
Nong Duc Manh