The Ministry of Industry and Trade (MOIT) has released a draft amended Petroleum Law, which is expected to be submitted to the National Assembly (NA) for passage this October.
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| Nghi Son refinery and petrochemical plant in Thanh Hoa province Photo: https://nhadautu.vn/ |
The 56-article draft focuses on six groups of policies relating to petroleum contracts; baseline petroleum survey; sequential implementation of petroleum projects; investment incentives; accounting, auditing and settlement of funds for petroleum activities, and responsibility to share existing infrastructure facilities of the petroleum sector.
Article 22 of the draft says that the Prime Minister would be vested with the power to approve contents of petroleum contracts for use as a basis for contractors to sign petroleum contracts. Such approval would replace the approval of investment policy under the Law on Investment and the Law on Public Investment.
Under the draft, both the validity period of a petroleum contract and oil and gas prospecting and exploration period might be extended but the extension must not exceed five years. In special cases for national defense or security reasons or due to complicated geological conditions or particular difficulties in petroleum activities, the Prime Minister would decide to permit an extension beyond the maximum five-year duration as usual.
Regarding investment incentives, the draft says that incentive policies for petroleum blocks would be provided through petroleum contracts. Accordingly, petroleum contracts for petroleum blocks eligible for investment incentives would enjoy the corporate income tax rate of 32 percent, and export duty of 10 percent on crude oil, and cost recovery rate of 70 percent of annual oil and gas production. As for blocks eligible for special investment incentives, these rates would be 25 percent, 5 percent, and 80 percent, respectively.
The State would not collect any charge for use of maritime zones for baseline petroleum survey; oil and gas prospecting and exploration; oil and gas exploitation; and processing and pipeline conveyance of oil and gas exploited in Vietnam’s maritime zones.- (VLLF)
