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The Ministry of Industry and Trade proposes to amend the Petroleum Law

The Ministry of Industry and Trade proposes to amend the Petroleum Law - 

The Ministry of Industry and Trade (MOIT) has just issued a document to propose amending the Petroleum Law to remove the currently arising inadequacies and problems, and create a more favorable legal corridor for investors, contribute to improving the investment environment in the petroleum sector of Vietnam.

According to the MOIT, the 1993 Petroleum Law was an important milestone marking the formation of the system of legal documents for petroleum development. This Law was gradually improved in 2000 and 2008.

However, there have been many changes in the international and domestic context, greatly affecting the petroleum development of Vietnam. During the implementation process of the petroleum activities, there were some shortcomings and problems having been not regulated by the Petroleum Law and other legal documents, law guidelines or the regulations either inappropriate or inconsistency, overlapping with other legal provisions, leading the activities of the petroleum upstream enterprises and state management actions to many difficulties and troubles.

The main issues and principles for establishing the Amended Petroleum Law:

Firstly, adjusting and supplementing regulations on the petroleum contract in the direction that the contract term is more flexible, it is a priority policy to extend contract term for the current operator, allowing to keep a small discovery without the development value at present, but may have potential in other plans (joint development, new technology ...).

Secondly, supplementing regulations to expand the investment scope of upstream petroleum projects as well as for a number of onshore projects (formerly under the midstream and downstream projects) to create favorable legal corridors for investment in the gas value chain of the petroleum industry, contributing to improving the attractiveness of the investment environment in the petroleum sector.

Thirdly, supplementing a legal framework suitable for receiving the property transferred by the contractor after exploitation to the host country at finishing the petroleum contract for maximally taking all the resources in the remaining time (about 3 to 5 years) or continue to invest in exploration for increasing exploitation output.

Fourthly, supplementing regulations on the special encouraging petroleum projects as well as directions on the appropriate tax policies (the taxes on natural resources, export productions, corporate income ...).

Fifthly, supplementing specific regulations on investment procedures for the upstream petroleum projects, ensuring consistency with the law on investment and state capital management with a number of the points as:

1 / For foreign contractors: To clarify the investment order and procedures for steps in petroleum activities; it needs more specific regulations on the priority to apply the petroleum law (Specialized Law) in implementing investment procedures for the petroleum projects.

2 / For state-owned enterprises (PVN, PVEP ...): to determine the investment form for the domestic petroleum projects (determining whether the project is ordinary project investment or out-of-business investment to have a clear handling mechanism). Supplementing the regulations on procedures and process for sale of working interest and participation benefits of PVN/PVEP in accordance with the specific characteristics of the petroleum activities.

VER.

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