Procedures for assessment, approval of list of oil blocks, oil fields eligible for investment incentive policies and special investment incentive policies in Vietnam

Procedures for assessment, approval of list of oil blocks, oil fields eligible for investment incentive policies and special investment incentive policies in Vietnam (Internet image)

1. Criteria for determining oil blocks in deep waters, offshore waters, areas with extremely difficult geographic conditions, complicated geological situations; marginal fields in Vietnam

Article 56 of Decree 45/2023/ND-CP stipulates the criteria for determining oil blocks in deep waters, offshore waters, areas with extremely difficult geographic conditions, complicated geological situations; marginal fields as follows:

- Oil blocks in deep waters, offshore waters, areas with extremely difficult geographic conditions, complicated geological situations are oil blocks where:

+ the shallowest point is located at a minimum depth of 150 m;

+ the point closest to shore is at least 150 km away from shore.

- Marginal fields are fields whose internal rate of return for the entire project lifetime is below 10% in USD and is lower than average cost of capital.

2. Procedures for assessment, approval of list of oil blocks, oil fields eligible for investment incentive policies and special investment incentive policies in Vietnam

Article 57 of Decree 45/2023/ND-CP stipulates the procedures for assessment, approval of list of oil blocks, oil fields eligible for investment incentive policies and special investment incentive policies in Vietnam as follows:

- Depending on eligible entities under Article 53 of the Law on Petroleum 2022, the PVN shall develop list of oil blocks and oil fields eligible for investment incentive policies and special investment incentive policies and submit 2 sets of documents (including 1 set of original documents and 1 set of copies) to the Ministry of Industry and Trade directly or via post service. The documents consist of:

+ Written request for approval of list of oil blocks, oil fields eligible for investment incentive policies and special investment incentive policies;

+ Assessment of compliance with eligibility under Article 53 of the Law on Petroleum 2022 together with detail calculation for each oil block and oil field in respective list (including economic effectiveness assessment of the project);

+ Other relevant documents.

- Within 5 working days from the date on which adequate documents are received, the Ministry of Industry and Trade shall send request for feedback to Ministry of Planning and Investment, Ministry of Finance, Ministry of Justice, Ministry of Natural Resources and Environment, Ministry of National Defense, Ministry of Public Security, and relevant ministries and central departments.

- Within 15 days from the date on which written request for feedback sent by the Ministry of Industry and Trade is received, ministries and central departments must send written feedback within their competence to the Ministry of Industry and Trade.

- Within 45 days from the date on which adequate documents are received, the Ministry of Industry and Trade shall assess lists of oil fields and oil blocks eligible for investment incentive policies and special investment incentive policies and request the Prime Minister to approve. The documents consist of:

+ Written presentation of assessment results and written request for approval of lists of oil blocks and oil fields eligible for investment incentive policies and special investment incentive policies to be sent to the Prime Minister;

+ Documents under Clause 1 of Article 57 of Decree 45/2023/ND-CP;

+ Consolidated report on acknowledgement and presentation of feedback of ministries, central departments, and copies of written feedback of ministries and central departments.

- On an annual basis, the PVN shall review and evaluate negotiation, signing of petroleum contracts, and implementation of petroleum operations in oil blocks and oil fields, and propose adjustment to lists of oil blocks and oil fields eligible for investment incentive policies and special investment incentive policies (if necessary), request the Ministry of Industry and Trade to assess, and request the Prime Minister to approve in accordance with Article 57 of Decree 45/2023/ND-CP.

To Quoc Trinh

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