On July 1, 2023, the Government issued Decree 45/2023/ND-CP detailing a number of articles of the Law on Petroleum in 2022.
Basic information about Decree 45/2023/ND-CP promulgated by the Government detailing a number of articles of the Petroleum Law in 2022, including:
Decree 45/2023/ND-CP includes 10 chapters and 64 articles detailing a number of articles of the Petroleum Law on basic investigation of petroleum; list of petroleum lots; selection of contractors to sign petroleum contracts; petroleum contract; safety in petroleum activities; dossiers, order and procedures for implementing petroleum activities, petroleum projects; incentives in petroleum activities; fully exploiting petroleum mines, clusters and lots; settlement of expenses for petroleum activities, within the mainland, islands and waters of Vietnam.
According to the guidance of Decree 45/2023/ND-CP, the detailed outline and cost estimate of the basic petroleum survey project include the following main contents:
In addition, the following contents are included:
Point a, Clause 7, Article 3 of Decree 45/2023/ND-CP provides guidance within 60 days from the date of receipt of the notice from the Ministry of Industry and Trade as prescribed. Based on the detailed outline and cost estimate of project on basic investigation on petroleum is prepared by the organization in charge of implementing the project and consulted by the Vietnam Oil and Gas Group (Petrovietnam), this organization submit 2 dossiers (including 1 original and 1 copy, sent directly or by post) for approval of detailed outline and project cost estimate.
The application requires the following documents:
Decree 45/2023/ND-CP stipulating the appraisal of detailed outlines and cost estimates of petroleum fundamental investigation projects shall be carried out in the form of an appraisal council. The Minister of Industry and Trade shall promulgate the decision on establishment and operation regulations of the appraisal council (including representatives of relevant ministries and branches) and the expert group assisting the appraisal council.
Time limit for completing the appraisal: 50 days from the date of receiving the valid application, of which 45 days for the council to complete the assessment, 5 days submit to the Minister of Industry and Trade for consideration and approval.
Decree 43/2023/ND-CP specifically stipulates that contractors must ensure that all risks are identified, analyzed and assessed for all petroleum works, machinery, equipment, chemicals, and dangerous materials. The results of the risk assessment are used as input data for the organization to carry out the emergency response.
Risk management includes:
The Contractor must build and maintain an emergency response system to effectively conduct rescue operations when incidents or accidents that cause harm to people, the environment or property occur. Depending on the severity of the incident or accident, the contractor must notify the competent authority according to regulations. Exercises and drills to handle emergency situations at petroleum works must be conducted regularly to ensure that workers understand and master the procedures for responding to specific emergency situations. Based on the results of the risk assessment to determine the form and frequency of exercise. The results of drills and drills must be evaluated and recorded to complete the emergency response plan.
From the scope of regulation, new policies in the Petroleum Law 2022 and Decree 45/2023/ND-CP guiding the implementation of the Petroleum Law 2022, in the coming time, there will be many key petroleum projects and offshore exploitation will be developed synchronously, with the expectation of creating a favorable environment and conditions to increase investment attraction in petroleum activities, contributing to increasing State budget revenue, ensuring energy security and protecting Vietnam’s sovereignty over sea and islands.
Decree 45/2023/ND-CP supplementing articles 56 and 57 new regulations on incentives in petroleum activities. Decree 45 provides for:
Compared with Decree No. 95/2015/ND-CP, these contents are newly added in accordance with the provisions of the Petroleum Law in 2022.
Basically, compared to Decree 95/2015/ND-CP, the new added regulation are suitable and compatible with other legal regulations on tax, without changing or adjusting regulations on relevant investment incentives such as: forms of investment incentives, principles of application of investment incentives, principles of adjustment of investment incentives in accordance with the provisions of the Petroleum Law in 2022 and the Law on Investment in 2020; preferential policies on land rent, water surface rent, sea surface rent implemented in accordance with Decree No. 11/2021/ND-CP.
The addition of objects, investment incentive policies, and special investment incentives for petroleum projects according to petroleum lots through petroleum contracts is appropriate, compatible with the objects and preferential policies. Investment Law of 2022 and the Law of Investment 2020, taking into account specific factors in petroleum activities (many risks, many stages, long petroleum contract term).
Decree 45/2023/ND-CP supplementing articles 58, 59, 60, 61 compared to Decree 95/2015/ND-CP stipulating the full exploitation of specific petroleum fields, clusters and lots:
Compared to Decree No. 95/2015/ND-CP, these contents are new added in accordance with the provisions of the Petroleum Law in 2022 and the reality of petroleum activities in Vietnam. This is a necessary policy for petroleum exploitation activities, especially with fields that have been exploited for 20-30 years in Vietnam in order to take advantage of petroleum resources to contribute to the state budget instead of ending the project.
The Prime Minister assigned the Petrovietnam to directly manage, operate and fully exploit petroleum fields, clusters and lots. The provisions of the Decree are suitable to actual and specific activities in petroleum activities, whereby the Petrovietnam has been assigned by the Government to sign and manage petroleum contracts.
In petroleum exploitation, it is necessary to specify: the main content of the operating mechanism, work program, budget for the exploitation and exploitation, and the mechanism of management, accounting and use of assets received from the contractor for full exploitation. Regulations on petroleum exploitation of Decree 45/2023/ND-CP do not conflict with relevant law provisions, in accordance with the characteristics of petroleum activities and international petroleum industrial practices.
Decree 45/2023/ND-CP supplements Article 62 new regulations on settlement for petroleum activities under petroleum contracts compared to Decree 95/2015/ND-CP.
The pre-acceptance test for petroleum activities is the pre-acceptance test for petroleum projects and activities suitable to the characteristics of petroleum activities and international petroleum industry practices, whereby there are many risks, real implemented in many stages with a long petroleum contract implementation time.
Article 62 new regulations on settlement of costs of petroleum activities under the petroleum contract by each stage in the project’s contract. The final settlement of the petroleum project will reflect the characteristics of the petroleum industry with many risks, many stages, and a long time to perform petroleum contracts.
The new regulation inherits legal documents related to petroleum activities (Decree No. 33/2013/ND-CP), has ensured stability, inherits petroleum contracts and actual petroleum activities is taking place, in accordance with the characteristics of petroleum activities, not in conflict with other laws and in accordance with international petroleum industry practices.
The contents of the Petroleum Product Distribution Model Contract are enclosed with Appendix I of Decree 45 and are updated and supplemented in accordance with the provisions of the Petroleum Law 2022 such as regulations on competence approval, regulations on policies, forms of incentives. Model contract of petroleum product sharing contract inherits Decree No. 33/2013/ND-CP and legal documents related to petroleum activities, ensures stability, inherits contracts petroleum operations and actual petroleum activities are taking place, in accordance with the characteristics of petroleum activities, not in conflict with other laws and in accordance with international petroleum industry practices.
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