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Lua^.t Da^`u Khi'

National Politics Publishers, Hanoi 1993

This English translation of the Petroleum Law is an
unofficial translation provided for informational purposes
only. All questions of interpretation must be resolved by
reference to the official Vietnamese text.

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PRESIDENT       SOCIALIST REPUBLIC OF VIETNAM
No.18 L/CTN     Independence Freedom Happiness

ORDINANCE

PRESIDENT OF THE SOCIALIST REPUBLIC OF VIETNAM

Pursuant to Articles 103 and 106 of the 1992 Constitution of
the Socialist Republic of Vietnam;

Pursuant to Article 78 of the Law on the Organisation of the
National Assembly;

PROCLAIMS

THE PETROLEUM LAW which was ratified by the Ninth National
Assembly of the Socialist Republic of Vietnam on the sixth
of July, 1993.

Hanoi, the 19th of July, 1993

PRESIDENT OF THE SOCIALIST REPUBLIC OF VIETNAM

LE DUC ANH

PETROLEUM LAW

In order to effectively conserve, exploit and utilise
Petroleum resources for the development of the national
economy and the promotion of cooperation with foreign
countries;

Pursuant to Articles 17, 29 and 84 of the 1992 Constitution
of the Socialist Republic of Vietnam;

This Law governs Petroleum exploration and production
activities carried out within the territory, the exclusive
economic zone and the continental shelf of the Socialist
Republic of Vietnam.

CHAPTER I

GENERAL PROVISIONS

ARTICLE 1:

All-the Petroleum existing in the subsoil of the land,
islands, internal waters, territorial sea, exclusive
economic zone and continental shelf of the Socialist
Republic of Vietnam is the property of the Vietnamese People
under the sole management of the State of Vietnam.

ARTICLE 2:

The State of Vietnam encourages Vietnamese and foreign
organisations and individuals to invest capital and
technology to conduct Petroleum Operations on the basis of
respect for the independence, sovereignty, territorial
integrity and national security of Vietnam and in compliance
with the Laws of Vietnam.

The State of Vietnam protects ownership rights with respect
to the capital investments, assets and other lawful rights
of Vietnamese and foreign organisations and individuals
conducting Petroleum Operations in Vietnam.

ARTICLE 3:

As used in this Law, the following terms shall have the
following meanings:

1. "Petroleum" means crude oil, natural gas, and
hydrocarbons whether in natural liquid, gaseous, solid or
semisolid state including sulphur and other similar
substances associated with hydrocarbons except coal, shale,
bitumen or other minerals from which oil can be extracted.

2. "Crude Oil" means hydrocarbons in natural liquid state,
asphalt, ozokerite and liquid hydrocarbons obtained by
distillation or extraction of Natural Gas.

3. "Natural Gas" means hydrocarbons in gaseous state
produced from wells, including wet gas, dry gas, wellhead
gas and residue gas after the extraction of liquid
Hydrocarbon from wet gas.

4. "Petroleum Operations" mean activities in exploration,
field development, and production of Petroleum, including
services directly related to or supporting such activities.

5. "Petroleum Contract" means a written agreement entered
into by and between the Vietnam Oil and Gas Corporation and
any organisation or individual to carry out Petroleum
Operations.

6. "Petroleum Services" mean activities conducted by
Sub-Contractors related to exploration, field development
and production of Petroleum.

7. "Block" means an area delimited by geographical
coordinates, designated for the exploration and production
of Petroleum.

8. "Contractor" means any Vietnamese or foreign organisation
or individual who is permitted to conduct Petroleum
Operations under a Petroleum Contract.

9. "Sub-Contractor" means any Vietnamese or foreign
organisation or individual who enters into a Contract with a
Contractor or Petroleum Joint Venture Enterprise to render
Petroleum Services.

10. "Petroleum Joint Venture Enterprise" means a joint
venture enterprise established under a Petroleum Contract or
a Treaty entered into by and between the Government of
Vietnam and a foreign government.

CHAPTER 11

PETROLEUM OPERATIONS

ARTICLE 4:

Any organisations, individuals conducting Petroleum
Operations shall utilise advanced technology and comply with
Vietnamese Laws regarding the protection of natural
resources and the environment, and the safety of person and
property.

ARTICLE 5:

Any organisations, individuals conducting Petroleum
Operations shall have a plan for environmental protection,
take all measures to prevent pollution, promptly eliminate
sources of pollution, and be responsible for remedying all
results of pollution.

ARTICLE 6:

Any organisations, individuals conducting Petroleum
prohibition.

ARTICLE 10:

The Government of Vietnam permits organisations, individuals
to conduct scientific research, exploration for and
production of minerals and natural resources other than
Petroleum in the area covered by a Petroleum Contract in
compliance with Vietnamese Laws. These operations shall not
hinder or be detrimental to Petroleum Operations.

ARTICLE 11:

All the samples, cores, data and information acquired during
the conduct of Petroleum Operations are the property of the
State of Vietnam. The handling and utilisation of such
samples, cores, data and information shall comply with
Vietnamese Laws.

ARTICLE 12:

Any organisations, individuals conducting Petroleum
Operations is permitted to install, operate and maintain
fixed installations and equipment servicing Petroleum
Operations; to construct and use transport routes,
pipelines, warehouses for the purpose of transporting and
storing Petroleum in compliance with Vietnamese Laws.

The ownership of the above installations and equipment shall
belong to the State of Vietnam from the date agreed upon by
the parties to a Petroleum Contract.

ARTICLE 13:

Upon the termination of Petroleum Operations, the
organisations, individuals shall clear the used acreage,
remove fixed installation and equipment at the request of
the competent State management authorities.

ARTICLE 14:

The Vietnam Oil and Gas Corporation (known in its
international dealings as "PETROVIETNAM") is a State owned
business enterprise founded by the Government of Vietnam to
conduct Petroleum Operations and enter into Petroleum
Contracts with organisations,  individuals for the conduct
of Petroleum Operations in accordance with this Law.

CHAPTER III

PETROLEUM CONTRACT

ARTICLE 15:

A Petroleum Contract may be entered into in the form of a
production sharing contract, joint venture agreement or
other forms of contract.

A Petroleum Contract shall conform to the Model Contract
issued by the Government of Vietnam, and shall contain the
following essential provisions:

1. enter into the contract;

2. Objects of the contract;

3. Acreage delimitation and schedule for the relinquishment
of the contract area;

4. Duration of the contract;

5. Conditions for early termination or any extension of the
contract;

6. Commitments on work programme and financial investment;

7. Rights and obligations of each party to the contract;

8. Recovery of capital investment, determination and sharing
of profit; rights of the host country to fixed assets after
the recovery of capital investment and termination of the
contract;

9. Conditions for assignment of rights and obligations of
the parties to the contract; the right of the Vietnam Oil
and Gas Corporation to participate in the capital
investment;

10. Commitments on training and preferential employment of
Vietnamese personnel and use of Vietnamese services;

11. Obligations to protect the environment, and to secure
safety during the conduct of Petroleum Operations;

12. Procedures for the settlement of disputes which may
arise from the contract.

In addition to the provisions of the Model Contract, the
parties to the contract may agree upon other provisions
which are not inconsistent with the provisions of this Law
and Vietnamese Laws.

ARTICLE 16:

Any organisations, individuals wishing to enter into a
Petroleum Contract shall be subject to the bidding or other
procedures stipulated by the Government of Vietnam. Such
organisations, individuals shall explicitly present their
financial resources, technical competence and professional
expertise in the conduct of Petroleum Operations.

ARTICLE 17:

The duration of a Petroleum Contract shall not exceed twenty
five (25) years during which the exploration period shall
not exceed five (5) years.

The duration of a Petroleum Contract with regard to
deep-water or remote offshore areas, and contractual
duration of exploration for and production of Natural Gas
shall not exceed thirty (30) years during which the
exploration period shall not exceed seven (7) years.

At the request of the Contractor and subject to the decision
of the Government of Vietnam, the duration of a Petroleum
Contract may be extended provided that the extended term
does not exceed five (5) years, and the exploration period
may be extended provided that the extended period does not
exceed one (1) year.

A Petroleum Contract may terminate prior to its stated term
provided that the commitments and obligations of the
Contractor have been fulfilled and that such early
termination has been agreed upon by the parties to the
contract.

ARTICLE 18:

An exploration acreage under a Petroleum Contract shall not
cover more than two (2) blocks.

In special cases, the Government of Vietnam may award an
exploration acreage of more than two (2) blocks but not
exceeding four (4) blocks for a Petroleum Contract.

ARTICLE 19:

The Contractor shall relinquish the exploration acreage as
stipulated by the Government of Vietnam.

ARTICLE 20:

The Contractor and the Vietnam Oil and Gas Corporation shall
agree in a Petroleum Contract upon a work programme and
commitments on minimum financial in-vestment during the
exploration period.

ARTICLE 21:

Upon discovering Petroleum, the Contractor and the Vietnam
Oil and Gas Corporation shall submit a report and provide
all the required information about such discovery to the
competent State management authority.

In case a commercial discovery is made, the Contractor shall
proceed immediately with an appraisal programme, prepare a
reserves evaluation report, and a field development and
production scheme to submit to the competent State
management authority for approval.

ARTICLE 22:

The language of Petroleum Contracts signed with foreign
organisations, individuals and the documents attached there
to shall be the Vietnamese language and a commonly used
foreign language as may be agreed upon by the Vietnam Oil
and Gas Corporation and such organisations, individuals.
Both the Vietnamese version and the foreign language version
are equally authentic.

ARTICLE 23:

A Petroleum Contract shall take effect upon approval of the
Government of Vietnam.

ARTICLE 24:

Any total or partial assignment of a Petroleum Contract by
the parties to the Contract shall only be effective after it
is approved by the Government of Vietnam.

The Vietnam Oil and Gas Corporation shall have the
preemptive right to acquire the Petroleum Contract or
portion thereof subject to assignment.

ARTICLE 25:

The Vietnam Oil and Gas Corporation shall have the right to
participate in capital investment under a Petroleum
Contract. Its share of capital investment, term of
participation, reimbursement of expenses incurred by
Contractor, and operating agreement shall be provided in the
Petroleum Contract in accordance with the international
practices of the petroleum industry.

ARTICLE 26:

The Contractor is entitled to enter into Petroleum Service
Contracts with preference given to Vietnamese organisations,
individuals.

Vietnam will undertake flight service or enter into a joint
venture contract with a foreign company to provide flight
service in support of Petroleum Operations.

ARTICLE 27:

Any disputes arising from a Petroleum Contract shall first
and foremost be settled through negotiation and
reconciliation.

In case no reconciliation can be made, if the disputing
parties are Vietnamese organisations, individuals, the
dispute will be resolved in accordance with Vietnamese Laws;
if a disputing party is a foreign organisation, individual,
the dispute will be resolved in compliance with the
provisions of the Law on Foreign Investment in Vietnam.

CHAPTER IV

RIGHTS AND OBLIGATIONS OF CONTRACTORS

ARTICLE 28:

Contractors shall have the following rights:

1. To enjoy privileges and guarantees as stipulated by
Vietnamese Laws;

2. To use samples, cores, data and information which have
been acquired fur the conduct of Petroleum Operations;

3. To recruit personnel for the performance of the work
under the Petroleum Contract on the basis of preferential
employment of Vietnamese personnel;

4. To hire Sub-Contractors in accordance with the provisions
of this Law and the international practices of the petroleum
industry;

5. To be exempted from import tax with regard to equipment,
materials required for Petroleum Operations and from
re-export tax with regard to such equipment that are not
permanently installed, or unused materials, in accordance
with Vietnamese Laws;

6. To be entitled to ownership of their share of Petroleum
after fulfilment of their financial obligations owing to the
State of Vietnam;

7. To export their share of Petroleum as provided in the
Petroleum Contract;

8. To recover their capital investment under the terms of
the Petroleum Contract;

9. Foreign organisations, individuals shall have right to
transfer abroad their recovered capital investment and
profit obtained during Petroleum Operations in accordance
with the provisions of the Law on Foreign Investment in
Vietnam.

ARTICLE 29:

Sub-Contractors shall have the rights stipulated at Items 1,
3 and 5 of Article 28 of this Law.

Sub-Contractors which are Foreign organisations, individuals
shall also have the right provided in Item 9 of Article 28
of this Law.

ARTICLE 30:

Contractors shall have the following obligations:

1. To comply with by Vietnamese Laws;

2. To fulfil their commitments as stipulated in the
Petroleum Contract,

3. To pay royalty, taxes, fees as stipulated by Vietnamese
Laws;

4. To transfer technology, train and employ Vietnamese staff
and workers and to respect their interests;

5. To take environmental protection measures;

6. To submit their Petroleum Operations reports to the
competent State management authority and to the Vietnam Oil
and Gas Corporation;

7. To provide documents as may be requested by the
inspection team;

8. To remove installations, equipment, facilities upon the
termination of Petroleum Operations at the request of the
competent State management authority;

9. To sell in the Vietnamese market a portion of their share
of Petroleum when requested by the Government of Vietnam.

ARTICLE 31:

Sub-Contractors shall have the obligations stipulated in
items 1,  2, 3, 4, 5, and 7 of Article 30 of this Law.

CHAPTER V

ROYALTY, TAXES AND FEES

ARTICLE 32:

Any organisations, individuals producing Petroleum shall pay
royalty.

Royalty shall be calculated on the actual production rate
during the relevant taxable period for each Petroleum
Contract.

The rate of royalty shall range from six percent (6%) to
twenty five percent (25%) for Crude Oil and can be higher in
specia1 cases.

The rate of royalty shall range from zero percent (0%) to
ten percent (10%) for Natural Gas.

Specific rates of royalty will be established by the
Government of Vietnam within the aforesaid rate framework
depending on geographical, economic and technical field
conditions and the level of production of Crude Oil or
Natural Gas.

ARTICLE 33:

Organisations, individuals conducting Petroleum exploration
and production shall pay corporate income tax at a rate of
50% of taxable income during the relevant taxable period.

In special cases, organisations, individuals conducting of
Petroleum Exploration and Production may be granted an
exemption from corporate income tax or a reduction in
corporate income tax rate. Such exemption or reduction will
be granted by the Government of Vietnam.

ARTICLE 34:

Sub-Contractors which are Vietnamese organisations,
individuals with operations in Vietnam shall pay Corporate
income tax in accordance with the Income Tax Law.

Sub-Contractors which are foreign organisations, individuals
registered to operate in Vietnam shall pay corporate income
tax in accordance with the Law an Foreign investment in
Vietnam. Sub-Contractors which are foreign organisations,
individuals not registered to operate in Vietnam shall pay
tax in accordance with Vietnamese Laws.

ARTICLE 35:

Organisations, individuals conducting Petroleum Operations
shall pay export and import taxes, rental for use of land or
real estate tax, other taxes and fees as stipulated by
Vietnamese Laws.

Foreign organisations, individuals conducting Petroleum
Operations shall pay a profit transfer tax in accordance
with the Law on Foreign Investment in Vietnam.

ARTICLE 36:

Employees of Vietnamese and foreign nationality working for
Contractors, Petroleum Joint Venture Enterprises,
Sub-Contractors shall pay personal income tax as stipulated
by Vietnamese Laws.

ARTICLE 37:

As may be agreed in a Petroleum Contract, royalty and all
other taxes payable by a Contractor or Petroleum Joint
Venture Enterprise maybe included in the share of production
of the Vietnam Oil and Gas Corporation, provided that the
Vietnam Oil and Gas Corporation undertakes to pay such
royalty, taxes an behalf of the Contractor or Petroleum
Joint Venture Enterprise.

CHAPTER VI

STATE MANAGEMENT OF PETROLEUM OPERATIONS

ARTICLE 38:

The State management of Petroleum Operations shall include:

1. Making decision on strategies, plans and policies for the
development of the petroleum industry;

2. Issuing regulations with respect to the management of
Petroleum Operations;

3. Monitoring, inspecting and supervising Petroleum
Operations;

4. Designating and delimiting blocks or acreage for
Petroleum exploration and production;

5. Making decision on policies and forms of cooperation with
foreign entities;

6. Approving Petroleum Contracts;

7. Establishing policies to promote or to restrict Petroleum
export to protect the interest of the State while taking
into account of the Contractor's interest;

8. Monitoring, giving instruction and guidance to relevant
authorities and localities in carrying out activities
related to Petroleum Operations;

9. Resolving issues related to the right to conduct
Petroleum Operations, and adjudicating any violation of this
Law.

ARTICLE 39:

The Government of Vietnam shall solely exercise the State
management of Petroleum Operations.

The State Petroleum Management Authority shall be
established in accordance with the Law on Governmental
Organisation to assume the State management of Petroleum
Operations.

Ministries and other State authorities shall carry out the
State management of Petroleum Operations in accordance with
their respective functions, powers and responsibilities.

CHAPTER VII

INSPECTION OF PETROLEUM OPERATIONS

ARTICLE 40:

Inspection of Petroleum Operations constitutes an inspection
in the petroleum industry with a view to ensure compliance
with the provisions of this Law and regulations, technical
procedures, specifications and rules, conserve Petroleum
resources, protect the environment, enforce safety rules,
and the performance of obligations owing to the State of
Vietnam by organisations, individuals conducting of
Petroleum Operations.

ARTICLE 41:

The State Petroleum Management Authority shall establish and
organise the implementation the Petroleum Operations
inspection function.

In conducting the inspection of Petroleum Operations, the
inspection team shall have the right:

1. to request relevant organisations, individuals to provide
documents and clarify issues relevant to the inspection;

2. to take measures for on-site technical verification;

3. to suspend or make recommendation to the competent State
authority to suspend Petroleum Operations likely to cause
accident or serious damages to life or property, Petroleum
resources and pollution;

4. to adjudicate any violation of this Law within its
jurisdiction or make recommendation regarding the
adjudication of violations to the competent State authority.

ARTICLE 42:

Organisations, individuals conducting Petroleum Operations
shall facilitate the inspection team's performance of its
duties, and shall strictly observe all decisions made by the
inspection team.

Organisations, individuals shall have the right to appeal
decisions of the inspection team as stipulated by Vietnamese
Laws.

ARTICLE 43:

CHAPTER VIII

ADJUDICATION OF VIOLATION

Any organisations, individuals violating any provision of
this Law shall be subject to warning or  fine or
confiscation of their facilities or other administrative
sanctions depending on the severity of their violation.

Any individual whose violation also constitutes a crime
shall be prosecuted in accordance with Vietnamese Laws.

ARTICLE 44:

Organisations, individuals conducting Petroleum Operations
which cause damages ta Petroleum resources, other natural
resources, the environment or property of the State, any
organisation, any individual shall be liable for
compensation for such damages in accordance with Vietnamese
Laws.

ARTICLE 45:

Organisations, individuals who illegally obstruct Petroleum
Operations shall be prosecuted for their violation in
accordance with Vietnamese Laws.

ARTICLE 46:

Organisations, individuals shall have the right to appeal
any decisions made on adjudication of violations as
stipulated by Vietnamese Laws.

CHAPTER IX

IMPLEMENTATION PROVISIONS

ARTICLE 47:

This Law and other provisions of Vietnamese Laws shall also
apply to:

1. All installations, structures, facilities, equipment for
purpose of Petroleum Operations in the exclusive economic
zone and on the continental she]f of the Socialist Republic
of Vietnam;

2. Installations, structures, facilities, equipment owned by
Vietnamese organisations, individuals for purpose of
Petroleum Operations on the basis of cooperation with
foreign entities in areas not under the jurisdiction of the
Socialist Republic of Vietnam.

ARTICLE 48:

The Government of Vietnam shall protect the economic
interests of the parties to Treaties, Petroleum Contracts
approved by the Government of Vietnam prior to the effective
date of this Law.

ARTICLE 49:

Based upon the provisions of this Law, the Government of
Vietnam may enter into with foreign government(s) treaties
of cooperation to conduct Petroleum Operations in Vietnam.

ARTICLE 50:

All prior regulations which are inconsistent with this Law
are abrogated.

The Government of Vietnam shall provide Regulations for the
implementation of this Law.

ARTICLE 51:

This Law shall take effect on the first of September, 1993.

This Law was ratified by the Ninth National Assembly of the
Socialist Republic of Vietnam at its third Session on the
sixth of July, 1993.

CHAIRMAN OF THE NATIONAL ASSEMBLY

NONG DUC MANH (Signed)

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