| THE GOVERNMENT | SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness |
| No. 121/2007/ND-CP | Hanoi, July 25, 2007 |
DECREE
PROVIDING FOR OFFSHORE DIRECT INVESTMENT IN PETROLEUM ACTIVITIES
THE GOVERNMENT
Pursuant to the Law on Organization of the Government dated December 25, 2001;
Pursuant to the November 29, 2005 Investment Law;
At the proposal of the Ministry of Industry,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1. Governing scope
1. This Decree provides for offshore direct investment in petroleum activities by investors based in Vietnam.
2. If a treaty to which Vietnam is a contracting party contains provisions different from the provisions of this Decree, the provisions of that treaty apply.
3. Vietnam-based investors making offshore direct investment in petroleum activities shall adhere to this Decree, the regulations on offshore investment and relevant provisions of law. If the provisions of this Decree are different from those of relevant decrees, the provisions of this Decree apply.
Article 2. Subjects of application
This Decree applies to Vietnam-based investors (below referred to as investors), including:
1. Limited liability companies, joint-stock companies, partnerships or private enterprises which have been granted business registration certificates under the enterprise Law.
2. Enterprises set up under the State Enterprise Law which have not been re-registered under the Enterprise Law.
3. Foreign invested enterprises set up under the Foreign Investment Law which have not been re-registered under the Enterprise Law and the Investment Law.
4. Enterprises of political organizations or socio-political organizations which have not been re-registered under the Enterprise Law.
5. Cooperatives and unions of cooperatives set up under the Law on Cooperatives.
6. Vietnamese business households and individuals.
Article 3. Interpretation of terms
In this Decree, the terms below are construed as follows:
1. Petroleum activities means activities of formulating and executing petroleum projects on oil and gas prospecting and exploration, field development or exploitation, including the piping and processing of crude oil and other directly related activities.
2. Petroleum contract means a written agreement signed between the representative of an owner of petroleum resources and an investor or other partners, under which the investor then enjoy the benefits of participation in the petroleum contract.
3. Petroleum assets means values or products created in the course of investment in a petroleum project.
4. Total investment in a petroleum project means all expenses for the formulation and execution of a project which is classified and formulated according to Article 4 of this Decree.
Article 4. Formulation and classification of petroleum projects
1. A petroleum project is formulated by one of the following modes:
a) Signing a petroleum contract;
b) Transferring the benefits of participation in a petroleum contract;
c) Transferring part or the whole of a company.
2. Petroleum projects include:
a) Oil and gas prospecting, exploration, development and exploitation projects which are executed from the prospecting and exploitation stage;
b) Oil and gas development and exploitation projects which are executed from the development and exploitation stage.
Article 5. Application of investment incentives
1. If newly promulgated laws or policies provide for benefits or incentives higher than those investors are entitled to under their investment certificates, investors may enjoy the benefits and incentives according to new regulations from the date those regulations take effect.
2. If benefits and incentives stated in his/her/its investment certificate or permit for offshore direct investment in petroleum activities are higher than those he/she/it is entitled to under current regulations, and investor may continue enjoying the benefits and incentives stated in that investment certificate or permit.
Article 6. Formulation and execution of petroleum projects
1. Activities of formulating a petroleum project are carried out by an investor in a foreign country or in Vietnam, aimed to directly or indirectly support the formulation of an offshore petroleum project, including:
a) Researching into markets and investment opportunities;
b) Conducting field surveys;
c) Reviewing documents;
d) Col1ecting and purchasing documents and information related to the selection of the petroleum project;
e) Conducting synthesization, assessment and evaluation, including hiring consultants for the assessment and evaluation;
f) Participating in, organizing seminars and symposiums;
g) Activities of the investor's overseas representative offices, liaison offices, branches and executive offices, which are related to the formulation of the petroleum project;
h) Participating in international bidding;
i) Negotiating petroleum contracts;
j) Other necessary activities.
2. Activities of executing a petroleum project include organization of the execution of the project according to the approved working program and budget, based on petroleum contracts or written agreements on investment signed with partners or written agreements on transfer of the benefits of participation in the contracts or transfer of part or the whole of a company which has been granted an investment certificate.
Chapter II
COMPETENCE TO APPROVE INVESTMENT AND PROCEDURES FOR THE GRANT AND ADJUSTMENT OF INVESTMENT CERTIFICATES
Article 7. Competence to approve investment
1. The Prime Minister shal1 approve investment in petroleum projects each funded with state budget capital of VND 1,000 bill1on or more or with other economic sectors' capital of VND 3,000 billion or more
2. Petroleum projects other than those defined in Clause 1 of this Article shal1 be decided by their owners' representatives or by investors.
Article 8. Investment certificates
1. Approval of a petroleum project takes the form of an investment certificate granted by the Ministry of Planning and Investment.
2. An investment certificate is granted for a petroleum project according to either of the following two processes:
a) Registration for the grant of an investment certificate, for petroleum projects capitalized at under VND 15 billion each;
b) Verification for the grant of an investment certificate, for petroleum projects capitalized at VND 15billion or more each.
Article 9. Dossiers of registration for the grant of investment certificates
A dossier of registration for the grant of an investment certificate comprises:
1. A written registration for the grant of an investment certificate, made according to the form promulgated by the Ministry of Planning and Investment.
2. A notarized copy of the investment certificate, for investors holding foreign investment capital; of the business registration certificate or the enterprise establishment decision, for domestic institutional investors; or of the people's identity card or passport, for investors being individuals.
For an investor holding foreign investment capital that has been granted an investment license before July 1, 2006, but has not been re-registered or transformed according to the Investment Law, a notarized copy of the investment license is required.
3. The offshore investment decision, issued by a competent authority specified in Clause 2, Article 7 of this Decree.
4. The petroleum contract or written agreement on investment signed with a partner or the written agreement on transfer and receipt of contract participation benefits or of a part or the whole of a company.
A dossier of registration for the grant of an investment certificate is submitted to the Ministry of Planning and Investment in 3 sets, including one original.
Article 10. Process of registration and grant of investment certificates
1. The Ministry of Planning and Investment shall examine the validity of a dossier of registration for the grant of an investment certificate according to Article 9 of this Decree.
If it is necessary to clarify some contents related to that dossier, within 3 working days after receiving it, the Ministry of Planning and Investment shall send a written request to the investor for explanation.
2. Within 15 working days after receiving a valid dossier, the Ministry of Planning and Investment shall grant the investor an investment certificate.
If disapproving a dossier of registration for the grant of an investment certificate, the Ministry of Planning and Investment shall notify such in writing, stating the reasons for disapproval. The investor may lodge a complaint about such disapproval in accordance with law.
3. The Ministry of Planning and Investment shall send copies of an investment certificate to the Ministry of Industry, the Ministry of Finance, the State Bank of Vietnam, the provincial-level People’s Committee of the locality where the investor registers business (for institutional investors) or permanent residence (for investors being Vietnamese individuals).
Article 11. Dossiers of verification for the grant of investment certificates
A dossier of verification for the grant of an investment certificate comprises:
1 A written request for verification for the grant of an investment certificate, made according to the form promulgated by the Ministry of Planning and Investment.
2. A notarized copy of the investment certificate, for investors holding foreign investment capital; of the business registration certificate or the enterprise establishment decision, for domestic institutional investors; or the people's identity card or passport, for investors being individuals.
For an investor holding foreign investment capital that has been granted an investment license before July 1, 2006, but has not been re-registered or transformed according to the Investment Law, a notarized copy of the investment license is required.
3. The report on the feasibility of the petroleum project, stating its objectives, location, scale, investment capital sources, execution schedule and economic efficiency.
4. The financial capacity report, made by the investor that is also responsible for it.
5. The offshore investment decision, issued by a competent authority specified in Clause 2, Article 7 of this Decree.
6. The petroleum contract or written agreement on investment with a partner or the written agreement on transfer and receipt of the participation benefits or of a part or the whole of a company.
A dossier of verification for the grant of an investment certificate is submitted to the Ministry of Planning and Investment in 8 sets, including one original.
Article 12. Process of verification for the grant of investment certificates
1. Contents of verification for the grant of an investment certificate:
a) The investor's legal status;
b) The legality of investment capital;
c) The project's execution schedule (for development and exploitation projects).
2. Within 3 working days after receiving a valid dossier of verification for the grant of an investment certificate, the Ministry of Planning and Investment shal1 send its copies to relevant ministries and branches for comment.
3. Within 10 working days after receiving a dossier, ministries and branches shal1 send their written comments to the Ministry of Planning and Investment. Past this time limit, any agency which gives no written comments is considered having agreed with the investor's request in the dossier of verification for the grant of an investment certificate.
4. Within 25 working days after receiving a complete and valid dossier, the Ministry of Planning and Investment shall verify the petroleum project and grant an investment certificate.
5. If disapproving a dossier of verification for the grant of an investment certificate, the Ministry ofPlanning and Investment shal1 notify such in writing, stating the reasons for disapproval. The investor may lodge a complaint about such disapproval in accordance with law.
6. With regard to petroleum projects falling within the approving competence of the Prime Minister, within 20 working days after receiving a complete and valid dossier, the Ministry of Planning and Investment shall submit to the Prime Minister a report on verification results and opinions of ministries and branches, and suggestions on the grant of an investment certificate.
Within 5 working days after getting the Prime Minister's approval, the Ministry of Planning and Investment shal1 grant an investment certificate.
7. The Ministry of Planning and Investment shall send copies of an investment certificate to the Ministry of Industry, the Ministry of Finance, the State Bank of Vietnam, the provincial-level People's Committee of the locality where the investor registers business (for institutional investors) or permanent residence (for investors being Vietnamese individuals).
Article 13. Shortening of the time limit for verification for the grant of investment certificates
For an urgent petroleum project, the investor shall send a written explanation together with the dossier stipulated in Article 11 of this Decree to the Ministry of Planning and Investment and relevant ministries and branches, requesting shortening of the verification time limit. Within 5 working days after receiving a valid dossier, the Ministry of Planning and Investment shall preside over meetings with relevant ministries and branches in order to conduct verification and grant an investment certificate without having to consult ministries and branches under the provisions of Clauses 2 and 3, Article 12 of this Decree.
With regard to petroleum projects falling within the approving competence of the Prime Minister according to Clause 1, Article 7 of this Decree, within 3 working days after completing the verification, the Ministry of Planning and Investment shall submit to the Prime Minister a report on verification results.
Within 2 working days after getting the Prime Minister's approval, the Ministry of Planning and Investment shall grant an investment certificate.
Article 14. Adjustment of investment certificates
1. If wishing to adjust a petroleum project which has been granted an investment certificate in terms of the form of investment, execution term, or total investment amounts which, after being adjusted, is 30% lower or higher than the amount stated in the investment certificate, the investor shall carry out procedures for adjustment of the investment certificate.
2. Adjustment of a petroleum project follows one of the following processes:
a) Registration, grant of an adjusted investment certificate;
b) Verification, grant of an adjusted investment certificate.
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