The MoIT and Petrovietnam held the Workshop introducing the Petroleum Law 2022 to oil and gas operators.

Abstract

On March 9, 2023, in Ho Chi Minh City, the Ministry of Industry and Trade (MoIT) and the Vietnam Oil and Gas Group (Petrovietnam) held a workshop introducing the Petroleum Law 2022 to oil and gas operators.

Speaking at the opening workshop, Mr. Le Ngoc Son - Petrovietnam Vice President and Mr. Tran Thanh Tung - Deputy Director of MoIT Petroleum and Coal Department shared the significance of disseminating the Petroleum Law 2022 to the directly affected targets, especially oil and gas operators. The workshop is also an opportunity to recognize objective and multi-dimensional exchanges that will contribute to the drafting agency to complete the Decree detailing a number of articles of the Petroleum Law 2022, bringing the Law to come into effect from July 1, 2023.

On November 14, 2022, the 15th National Assembly of the Socialist Republic of Vietnam voted to approve the Petroleum Law 2022. It is the first time the Petroleum Law in force has been comprehensively revised since its first enactment on July 6, 1993. The Petroleum Law No. 12/2022/QH15, consisting of 11 Chapters and 69 Articles and taking effect from July 1, 2023, stipulates issues related to oil and gas basic surveys and follow-up operations.

The 2022 Petroleum Law has many new progressive and breakthrough points. Its governing scope is expanded to encompass petroleum basic surveys and petroleum operations. Some new definitions are added to be in line with the adjusted scope of Petroleum Law, such as petroleum basic surveys, unconventional petroleum objects (hydrate, coalbed methane, shale oil or clay oil, shale gas or clay gas); in line with the practice of oil and gas activities as well as the state management over the sector such as petroleum projects, fields and marginal fields, decommissioning, etc. Some definitions have been adapted to meet actual requirements during implementation contracts: petroleum operations, petroleum installations, cost recovery, etc. Regulations on the compliance of the 2022 Petroleum Law, relevant laws, and rules of applying international laws or petroleum industry practices (Article 4), etc. are also included.

Petroleum basic survey is a new content to establish a legal framework for the implementation and state management of this activity. The State policy on petroleum sector is clearly shown and updated, e.g., Article 5 – Clause 3 (no fees for using marine area for basic survey and oil and gas activities), Clause 4 (incentive policy for investment) and Clause 5 (encouraging to share existing petroleum infrastructure/ constructions).

The basis to conduct any oil and gas operations is a petroleum contract to be signed upon the Prime Minister’s approval or specific decision issued by the Prime Minister in the case of production continuation beyond petroleum contract term. This is a new content reflecting the actual needs at many oil and gas fields being produced in the final stage.

At the workshop, oil and gas operators focused on discussing and commenting on the draft Decree detailing the 2022 Petroleum Law in order to concretize a number of articles to ensure a consistency of implementation method and coordination among stakeholders (organizations, individuals, contractors, Petrovietnam, authorities). Based on the principles of Decree formulation mentioned above, the content of the draft Decree Version 1, being sent for feedback in Official Dispatch No. 274/BCT-DKT dated January 18, 2023, includes 68 articles and 1 appendix of PSC template. The draft Decree is divided into several groups of issues: Basic investigation on oil and gas potential; Process to select contractor for signing petroleum contracts; Petroleum contract; Regulations on incentives for petroleum activities; Policy on full exploiting fields, clusters of fields and blocks; Settlement of petroleum operation costs under petroleum contract.

Also in the workshop, Petrovietnam introduced the plan to select operators to sign oil and gas contracts in obedience with the 2022 Petroleum Law for several open blocks expected to be held in 2023.