Vietnam: When is it necessary to set up a fund to ensure the obligation to clean up oil and gas works? What are the regulations on the implementation of oil and gas cleanup?
- Is cleanup considered an oil and gas operation? What is the cleanup plan for oil and gas works in Vietnam?
- When is it necessary to set up a fund to ensure the obligation to clean up oil and gas works in Vietnam?
- How is the main content of the oil and gas cleanup plan regulated in Vietnam?
- How is the implementation of oil and gas cleanup regulated in Vietnam?
- When does the contractor have to clean up the oil and gas works in Vietnam?
Is cleanup considered an oil and gas operation? What is the cleanup plan for oil and gas works in Vietnam?
Pursuant to Clause 3, Article 3 of the Petroleum Law 2022 of Vietnam stipulates as follows:
Oil and gas activities include oil and gas exploration activities, oil and gas field development, oil and gas exploitation, and cleanup of oil and gas works.
At the same time, based on Clause 17, Article 3 of the Law on Petroleum 2022 stipulates as follows:
Oil and gas cleanup plan is a document presenting research contents on technical plans, solutions, technology, environment, costs and progress of cleaning up oil and gas works.
Accordingly, cleaning up oil and gas works is one of the oil and gas activities
Oil and gas cleanup plan is a document presenting research contents on technical plans, solutions, technology, environment, costs and progress of cleaning up oil and gas works.
Vietnam: When is it necessary to set up a fund to ensure the obligation to clean up oil and gas works? What are the regulations on the implementation of oil and gas cleanup?
When is it necessary to set up a fund to ensure the obligation to clean up oil and gas works in Vietnam?
Pursuant to Clause 2, Article 51 of the Law on Petroleum 2022 stipulates as follows:
Fund to ensure the obligation to clean up oil and gas works
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2. Within 01 year from the date on which the first oil and gas flow is commercially exploited from the oil and gas contract area, the contractor must establish a fund to ensure the obligation to clean up the oil and gas project. The fund to ensure the obligation to clean up oil and gas works is deducted annually on the basis of the approved oil and gas cleanup plan and submitted to Vietnam Oil and Gas Group. The amount of deduction paid by each contractor corresponds to the percentage of the contractor's participation interest in the oil and gas contract and is included in the recovery cost of the oil and gas contract.
Accordingly, the fund to ensure the obligation to clean up oil and gas works must be established by the contractor within 01 year from the date of the first oil and gas flow to be commercially exploited from the oil and gas contract area.
How is the main content of the oil and gas cleanup plan regulated in Vietnam?
Pursuant to Clause 4, Article 50 of the Petroleum Law 2022 of Vietnam, the main contents of the plan for cleaning up oil and gas works are as follows:
The main contents of the oil and gas cleanup plan include:
- List and description of means, equipment complexes and construction structures of oil and gas works to be cleaned up;
- Technical solutions and plans for the cleanup of oil and gas works;
- Waste management plan, marine pollution control, environmental monitoring plan, environmental incident prevention and response plan, safety assurance plan during the cleanup of oil and gas works;
- Estimation of cleanup costs, plans and progress of appropriation of funds to ensure the obligation to clean up oil and gas works;
- Progress of cleanup work on oil and gas works.
How is the implementation of oil and gas cleanup regulated in Vietnam?
Pursuant to Article 52 of the Petroleum Law 2022 of Vietnam, the following provisions on the cleanup of petroleum works are provided:
- The contractor is obliged to clean up the oil and gas project according to the approved oil and gas cleanup plan.
- The cleanup of oil and gas works must meet the requirements of safety and environmental protection in accordance with the provisions of law.
- The contractor shall submit to the Vietnam Oil and Gas Group a report to the Ministry of Industry and Trade for approval to leave part or all of the oil and gas works; postpone the partial or complete cleanup of oil and gas works.
- The contractor must immediately carry out the cleanup of each or all of the heavily damaged oil and gas works; seriously degraded oil and gas works are not capable of repairing and overcoming impacts on the safety of oil and gas activities.
- In the process of oil and gas exploitation, the contractor may pre-clean up each or some items and equipment and cancel the wells included in the approved oil and gas cleanup plan that are no longer usable to reduce operating and maintenance costs
- The Government shall prescribe dossiers, order and procedures for submission, appraisal and approval of the leaving, postponing the cleanup or carrying out the cleanup of part or all of the oil and gas works.
When does the contractor have to clean up the oil and gas works in Vietnam?
Pursuant to Clause 1, Article 50 of the Law on Petroleum 2022 stipulates as follows:
Formulation, appraisal and approval of plans for cleanup of oil and gas works
1. In the course of conducting oil and gas activities, after the end of each stage or the end of the petroleum contract, the contractor must clean up oil and gas works that are no longer in use or cannot continue to serve oil and gas activities due to severe damage, incompatibility with technologies affecting the safety and efficiency of oil and gas activities.
At the same time, based on Clause 2, Article 50 of the Law on Petroleum 2022 and Clause 3, Article 50 of the Law on Petroleum 2022 stipulating the preparation, appraisal and approval of plans for cleanup of petroleum works:
The contractor must clean up oil and gas works that are no longer in use or cannot continue to serve oil and gas activities due to severe damage, unsuitable for technology that affects the safety and efficiency of oil and gas activities after the end of each stage or the end of the oil and gas contract.
At the same time, the contractor must make a plan to clean up the oil and gas project and submit it to the Vietnam Oil and Gas Group to report to the Ministry of Industry and Trade for appraisal and approval within 01 year from the date the first gas is commercially exploited from the oil and gas contract area.
In addition, at least 01 year before the end of the oil and gas contract or the end of the oil and gas exploitation period, the contractor must update the plan to clean up the oil and gas project and submit it to the Vietnam Oil and Gas Group to report to the Ministry of Industry and Trade for appraisal and approval.
Petroleum Law 2022 of Vietnam will come into force from July 01, 2023.
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