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THE
PRIME MINISTER
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
143/2008/QD-TTg
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Hanoi,
October 29, 2008
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DECISION
PROMULGATING
THE REGULATION ON SETTING UP, MANAGEMENT AND USE OF THE OIL AND GAS PROSPECTING
AND EXPLORATION FUND
THE PRIME MINISTER
Pursuant to the December 25,
2001 Law on Organization of the Government;
Pursuant to the 1993 Petroleum Law and the 2000 Law Amending and Supplementing
a Number of Articles of the Petroleum Law;
Pursuant to the Government's Decree No. 142/2007/ND-CP of September 5, 2007,
promulgating the Financial Management Regulation applicable to the parent
company -the Vietnam National Oil and Gas Group;
At the proposal of the Minister of Finance,
DECIDES:
Article 1.- To promulgate
together with this Decision the Regulation on setting up, management and use of
the Oil and Gas Prospecting and Exploration Fund.
Article 2.-The Vietnam
National Oil and Gas Group shall set up, manage and use the Fund in accordance
with this Regulation.
Article 3.- This Decision
takes effect 15 days after its publication in "CONG BAO." All
previous regulations on the setting up. management and use of the Oil and Gas
Prospecting and Exploration Fund of the Vietnam National Oil and Gas
Corporation which are contrary to this Decision are annulled.
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PRIME
MINISTER
Nguyen Tan Dung
REGULATION
ON
SETTING UP, MANAGEMENT AND USE OF THE OIL AND GAS PROSPECTING AND EXPLORATION
FUND
(Promulgated together with the Prime Minister's Decision No. 143/2008/QD-TTg
of October 29, 2008)
Chapter I
GENERAL PROVISIONS
Article 1.- The Oil and
Gas Prospecting and Exploration Fund (below referred to as the Fund) is set up
to provide financial supports and offset part of risks in oil and gas
prospecting and exploration (at home and overseas) and reserves assessment.
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Article 2.- In this
Regulation, the terms below are construed as follows:
1. Oil and gas prospecting and
exploration activities means activities aiming to prospect and assess oil and
gas potential and determine the existence of oil and gas reserves and the
capacity of oil and gas commercial exploitation within structure objects
(seams, formations), structure clusters, blocks or sedimentary basins,
covering: geological, geo-physical and geo-chemical preparations and surveys
and other surveys; analyses and researches, well drilling and closing; seam
test; well improvement; well repair; well destruction and reserves assessment
planning.
2. Risks in oil and gas
prospecting and exploration (risks) means achieved prospecting and exploration
results which fail to attain the minimum objectives already approved by
competent authorities.
Article 3.- Fund use
purposes
The Fund is used for the Group's
implementation of. or capital contribution to, domestic and overseas oil and
gas prospecting and
exploration projects which fully
satisfy the conditions specified in Clause 1. Article 4 of this Regulation; and
for offsetting part of risks in oil and gas basic survey, prospecting,
exploration and reserves assessment activities.
Article 4.- Conditions on
projects to be financed by the Fund
1. To be financed by the Fund,
an oil and gas basic survey or prospecting and exploration project must fully
satisfy the following conditions:
a/ Having been approved by a
competent authority under regulations and being other than those specified in
Article 5 of this Regulation;
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2. The Group's Board of
Directors shall, based on the provisions of Clause 1 of this Article and the
Fund's capital-balancing capacity, decide on the use of the Fund for investment
in specific projects in the following order of priority:
a/ Projects in overlapping areas
and areas under disputes with regional countries which are related to national
sovereignty or security: projects implemented by the Group in Laos and
Cambodia, and other projects as decided by the Prime Minister.
b/ Encouraged oil and gas
investment projects according to the list of oil and gas blocks decided by the
Prime Minister;
c/ Other projects which fully
satisfy the conditions specified in Clause 1, Article 4 of this Regulation.
Article 5.- Projects not
to be financed the Fund
1. Projects funded with capital
of other sources.
2. Projects aiming to increase
oil and gas reserves under exploitation projects or development projects, of
which the development for oil and gas exploitation has been decided by a
competent authority.
Chapter II
SETTING UP, MANAGEMENT AND
USE OF THE FUND
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Annual deductions shall be made
for the Fund from the following sources:
1. Not more than 10% of the host
country's annual oil and gas profit allocated to the parent company - the
Group.
2. 10% of the annual after-tax
profit of the parent company - the Group.
3. Other sources (if any).
Deductions mentioned in Clauses
1 and 2 of this Article will not be made for the Fund once its balance has
reached 10% of the charter capital of the parent company - the Group.
Article 7.- The Group's
general director shall work out and submit annual plans on the use of the Fund
to the Group's Board of Directors for approval as a basis for implementation,
and include them as a separate item in the Group's annual financial plans.
Article 8.- Advance,
take-over test, payment
1. The Group shall advance funds
from the Fund for the implementation of oil and gas basic survey, prospecting
and exploration projects on the basis of approved plans, implementation
progress and detailed cost estimates. The specific advance level for each job
item of a project shall be decided by the Group's general director but must not
exceed 90% of the project's total estimate.
Advanced funds must be used for
proper purposes; if they are used for improper purposes or not used up, they
must be returned to the Fund within 15 days after a decision to this effect is
issued by the Group's Board of Directors Chairman or a state agency competent
to conduct examination, inspection or state audit.
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3. The payment of all expenses
for project implementation is based on project test results.
Article 9.- Management
and use of the Fund's idle capital
The Group may use the Fund's
idle capital for its production and business needs other than the Fund's use
purposes specified in Article 1 of this Regulation on the principle that it
must refund this capital and ensure the Fund's sufficient capital to meet
arising funding needs. The use of the Fund for the above purposes must not
affect oil and gas prospecting and exploration activities.
The Group's general director
shall take responsibility before the Board of Directors and law for the
efficient use of Fund's idle capital in accordance with the above principles.
Article 10.- Settlement
of allocated funds upon project termination
1. Upon the termination of an
oil-and gas prospecting and exploration project, if oil and gas discoveries are
of commercial value and when such project is decided to be transformed into a
development project by a competent authority, the Fund's allocations for the
project shall be debited and, at the same time, the Group owner's investment
capital shall be credited
2. In case an oil and gas
prospecting and exploration project faces risks and is incapable to retrieve
expenses:
a/ For projects on basic surveys
and projects specified at Points a and b, Clause 2, Article 4 of this
Regulation, the Group may debit the Fund's allocations in proportion to the
volumes of the projects' oil and gas prospecting and exploration jobs already
paid by the Fund;
b/ For other projects, the
parent company the Group shall use its financial provision fund to cover
expenses; if this fund is deficient, the deficit shall be accounted as the
parent company's production and business expenses within 5 years from the date
of project termination.
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Within 6 months after an oil and
gas prospecting and exploration project is completed or is forced to terminate
ahead of schedule, the Group's Board of Directors shall evaluate and approve
the settlement of the Fund's allocations for the project. Its approval decision
must clearly state the actual value used from the Fund after subtracting the
damages of the insurer or concerned collectives and individuals and the value
of supplies and assets paid by the project (if any).
Article 12.- Year-end
reports
Within 90 days after the
year-end, the Group shall make a report on the setting up, use and settlement
of the Fund and send it to the Ministry of Financeand the Ministry of Industry
and Trade for monitoring and supervision.
The Ministry of Finance shall
inspect and supervise the setting up, management and use of the Fund; guide in
detail accounting regulations and the form of report on the setting up, use and
settlement of the Fund.
Chapter III
IMPLEMENTATION PROVISIONS
Article 13.- The Group's
Board of Directors shall, based on this Regulation, direct the Group in the
setting up, management and use of the Fund, and take responsibility for the
setting up, management and efficient and proper use of the Fund. Problems
arising in the course of implementation should be reported to the Ministry of
Finance for study, synthesis and submission tc the Prime Minister for amendment
and supplementation.
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