Contents of the petroleum contract according to the Law amending and supplementing the Law on Petroleum in 2000 of Vietnam

Specifically, according to Clause 3 Article 1 of the Law amending and supplementing the Law on Petroleum in 2000 of Vietnam, which amends and supplements Article 15 of the Law on Petroleum 1993, a petroleum contract may be signed in the form of product-sharing contract, joint-venture contract or other contractual forms.

A petroleum contract must be in conformity with the model contract issued by the Government of Vietnam with the following principal contents:

- Legal status of organizations and/or individuals that shall jointly sign the contract;

- The contract’s object(s);

- The area delimitation and the time schedule for returning the contractual area;

- The contract’s duration;

- Conditions for termination of the contract ahead of time or for the extension of the contract;

- Commitments on working tempo and financial investment;

- Rights and obligations of the contractual parties;

- The recovery of investment capital, determination and distribution of profits; the host country’s right over fixed assets after the capital recovery and the contract termination;

- Conditions for the assignment of rights and/or obligations of the contractual parties; the right of the Vietnam Oil and Gas Corporation to contribute investment capital;

- Commitments on training and priority given to the employment of Vietnamese laborers and the use of Vietnamese services;

- Responsibilities to protect the environment and ensure safety while conducting petroleum activities;

- Methods of settling disputes which may arise from the contract and applicable laws.

In addition to provisions and clauses stipulated in the model contract, the contractual parties may agree on other provisions and clauses, which must not be contrary to provisions of the Law on Petroleum 1993 and other relevant provisions of Vietnamese law.

The parties to a petroleum contract may agree to nominate a party from among them to act as the executor or hire an executor or establish a joint-execution company according to the regulations of Vietnam’s Government.

In cases where they obtain the Prime Minister’s consent, the parties to the petroleum contract may agree not to apply the model contract, but the contract to be signed must contain the principal contents prescribed above.

View more details: The Law amending and supplementing the Law on Petroleum in 2000 takes effect from July 01, 2000.

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