Regulations on handling of costs of Vietnam Oil and Gas Group

Regulations on handling of costs of Vietnam Oil and Gas Group (Internet image)

Regarding this matter, LawNet would like to answer as follows: 

1. Handling of costs of Vietnam Oil and Gas Group (PVN)

Regulations on handling costs of PVN according to Article 64 of the Petroleum Law 2022 are as follows:

- Costs for fundamental investigation of petroleum conducted by PVN apart from the funding secured by the state budget (if any) shall be paid by the post-tax profit of PVN.

- Costs for hydrocarbon exploration of the unsuccessful project for hydrocarbon exploration of PVN, after a decision of the Members’ Council of PVN on termination of the petroleum project and finalization of costs is issued, shall be covered from the annual post-tax profit of PVN and allocated for 05 years from the date on which the decision is issued.

- Costs prescribed in Clauses 1 and 2 of Article 64 of the Petroleum Law 2022 shall be handled from the post-tax profit of PVN before extracting funds in accordance with regulations of law on managing and using the state capital to invest in production and business in enterprises.

- PVN shall be permitted to transfer to state budget the revenues from selling the remaining petroleum products of the host country from petroleum contracts before determining interest shared to the host country to pay costs and fulfill obligations as follows:

+ Costs incurred by the host country, under the regulations of the petroleum contracts, which are paid by PVN on behalf of the host country;

+ The obligation fulfilled by PVN for the remaining petroleum products of the host country stated in the petroleum contracts on behalf of the host country;

+ Costs for management and supervision of petroleum contracts;

+ Costs for remaining petroleum contracts in case PVN receives the participating interest from the contractors for the speci

2. Regulations on obligations of PVN

Regulations on the obligations of PVN according to Article 62 of the Petroleum Law 2022 are as follows:

- Effectively and rationally manage and exploit petroleum resources, protect resources and environment, and ensure the safety in petroleum operations.

- Manage, store, preserve and use samples, documents, information, data and results of fundamental investigations of petroleum conducted by organizations apart from the state agencies and enterprises presiding over conducting fundamental investigation of petroleum; samples, documents, information and data collected during the process of performing petroleum operations and after ending petroleum contracts to ensure the right to access of organizations and individuals to such documents, information, data and results of the fundamental investigations of petroleum and petroleum operations.

- Manage and supervise the fulfillment of agreements on fundamental investigation of petroleum related to the exploitation of information, data and results of the fundamental investigation of petroleum in accordance with the regulations of law and the signed agreements.

- Strictly and effectively manage and supervise the execution of petroleum contracts in accordance with the regulations of law and the petroleum contract.

- Report petroleum operations to competent authorities periodically or upon request.

- Propose solutions and cooperate in making policies, strategies, and orientations related to the rational and effective exploitation of petroleum resources, protection of environmental resources and sustainable development at the request of competent authorities.

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