What is the form of the petroleum product sharing contract in Vietnam in 2023 according to Decree 45/2023/ND-CP?
What is the form of the petroleum product sharing contract in Vietnam in 2023 according to Decree 45/2023/ND-CP?
Pursuant to the provisions of Clause 5, Article 3 of the Law on Petroleum 2022, the concept of a petroleum product sharing contract is clearly stated as follows:
“Petroleum production sharing agreement” means a petroleum contract, including regulations on the production sharing among parties on the basis of oil production obtained from petroleum operations within a respective contract area; the contractor is entitled to recover costs from the oil production and is responsible for all financial and technical aspects and at its own risk.
Pursuant to the Appendix issued together with Decree 45/2023/ND-CP stipulating the latest form of petroleum product sharing contract in 2023 has the following form:
Download sample petroleum product sharing contract: Here
What is the form of the petroleum product sharing contract in Vietnam in 2023 according to Decree 45/2023/ND-CP?
What content can the Vietnam National Oil and Gas Group and the contractor negotiate?
Pursuant to the provisions of Article 24 of Decree 45/2023/ND-CP stipulates as follows:
Petroleum product sharing contract
1. Petroleum product sharing contracts must conform to contract form under Appendix attached hereto.
2. PVN and contractors shall only negotiate details mentioned under “dependent on bidding or negotiation results” and other details under Article 20.7 of the contract form.
According to the above provisions, PVN and contractors shall only negotiate details mentioned under “dependent on bidding or negotiation results” and other details under Article 20.7 of the contract form
What are the main contents of a petroleum product sharing contract in Vietnam?
Pursuant to the provisions of Article 30 of the Law on Petroleum 2022, the following regulations:
Main terms of petroleum contracts
1. Main terms of an petroleum production sharing agreement include:
a) Legal status, participating interests of contractors selected for signing the agreement;
b) Eligible entities of the agreement;
c) Area limit and schedule for return of contract area;
d) Effective date, term and phases of the agreement, conditions for extension of the phases of the agreement and amendments to the agreement and extension thereof.
dd) Rights and obligation of contracting parties and operator;
e) Minimum work obligation and minimum expenditure obligation in phases of the agreement;
g) Rules for sharing of petroleum products and determination of recoverable costs;
h) Rules for selection of contractors for provision of petroleum services and goods for petroleum operations;
i) Rights of the host country for petroleum installations and assets after cost recovery and contract termination;
k) Conditions for transfer of rights and obligation of contracting parties;
l) Rights of PVN to participate in the agreement when a commercial discovery is determined and priority over purchase of participating interests, rights and obligation assigned by the contractor in the agreement whenever possible;
m) Commitments to have commissions, training, scientific research funds and take priority over use of Vietnamese employees and services;
n) Charges for environmental protection and safety measures conducted in petroleum operations; obligation to decommission petroleum installations;
o) Requirements for termination of the agreement and handling of violations thereof;
p) Methods for settling disputes arising from the agreement and applicable law.
2. The Prime Minister shall decide main contents of other petroleum contracts suitable for specific characteristics of oil fields, groups of oil fields and blocks.
3. The Government shall issue an petroleum production sharing agreement template.
Accordingly, Main terms of an petroleum production sharing agreement include:
- Legal status, participating interests of contractors selected for signing the agreement;
- Eligible entities of the agreement;
- Area limit and schedule for return of contract area;
- Effective date, term and phases of the agreement, conditions for extension of the phases of the agreement and amendments to the agreement and extension thereof.
- Rights and obligation of contracting parties and operator;
- Minimum work obligation and minimum expenditure obligation in phases of the agreement;
- Rules for sharing of petroleum products and determination of recoverable costs;
- Rules for selection of contractors for provision of petroleum services and goods for petroleum operations;
- Rights of the host country for petroleum installations and assets after cost recovery and contract termination;
- Conditions for transfer of rights and obligation of contracting parties;
- Rights of PVN to participate in the agreement when a commercial discovery is determined and priority over purchase of participating interests, rights and obligation assigned by the contractor in the agreement whenever possible;
- Commitments to have commissions, training, scientific research funds and take priority over use of Vietnamese employees and services;
- Charges for environmental protection and safety measures conducted in petroleum operations; obligation to decommission petroleum installations;
- Requirements for termination of the agreement and handling of violations thereof;
- Methods for settling disputes arising from the agreement and applicable law.
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