Decree No. 17/2009/ND-CP Amending and Supplementing Certain Provisions of Decree No. 121/2007/ND-CP on Direct Investment Abroad in Oil and Gas Activities dated July 25, 2007.

DECREE

Regarding amendments and supplements to certain provisions of Decree No. 121/2007/NĐ-CP dated July 25, 2007 on direct investment abroad in oil and gas activities

Amendments and supplements to certain provisions of Decree No. 121/2007/NĐ-CP dated July 25, 2007 on direct investment abroad in oil and gas activities are as follows:

______________________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Investment Law dated November 29, 2005;

Considering the proposal of the Minister of Industry and Trade,

DECREE:

Article 1. "5. The operating entity is a business established by the Investor in accordance with Clause 14, Article 1 of this Decree to implement oil and gas projects abroad."

1. Supplementing Clause 5 of Article 3 as follows:

"1. Activities forming an oil and gas project conducted by the Investor abroad or in Vietnam aimed at directly or indirectly supporting the formation of an oil and gas project abroad include:

2. Clause 1 of Article 6 shall be amended and supplemented as follows:

d) Collecting and purchasing materials and information related to selecting an oil and gas project;

a) Market research and investment opportunities;

b) On-site surveys;

c) Document studies;

đ) Summarizing, evaluating, and appraising, including selecting and hiring consulting experts for evaluation and appraisal of the project;

e) Organizing and participating in scientific seminars and conferences;

g) Establishing and operating businesses in accordance with Clause 14, Article 1 of this Decree, the operations of representative offices, liaison offices, branches, and operating entities of the Investor abroad related to the formation of an oil and gas project;

h) Participating in international bidding, placing deposits, providing guarantees, or other financial assurance forms as required by the tenderer or the receiving country related to bidding conditions;

i) Negotiating oil and gas contracts;

k) Purchasing or leasing assets to support the formation of an oil and gas project abroad;

l) Other necessary activities."

"Article 7.

3. Article 7 is amended and supplemented as follows:

Approval authority for investment and investment decision 1. The Prime Minister approves investment for the following oil and gas projects:

a) Oil and gas projects formed through signing oil and gas contracts using state capital of VND 3,000 billion or more or capital from various economic sectors of VND 5,000 billion or more.

b) Oil and gas projects formed through transferring rights to participate in oil and gas contracts, transferring part or all of a company using state capital of VND 5,000 billion or more or capital from various economic sectors of VND 8,000 billion or more.

2. Representatives of owners or Investors decide on investment for oil and gas projects not covered by Clause 1 of this Article, adjusting total investment amounts for oil and gas projects in accordance with Article 16 of Decree No. 121/2007/NĐ-CP."

"5. A certified copy of the Business Registration Certificate or establishment decision of the Operator and the power of attorney agreement between the Investor and the Operator in cases where the Operator participates in the oil and gas project."

4. Adding Clause 5 of Article 9 as follows:

"5. Supplement Clause 7 of Article 11 as follows:

"7. A certified copy of the Business Registration Certificate or establishment decision of the Operator and the power of attorney agreement between the Investor and the Operator in cases where the Operator participates in the oil and gas project."

6. Point a of Clause 1 of Article 12 is amended and supplemented as follows:

"a) Legal status of the Investor and the Operator;"

7. Clauses 4, 5, and 6 of Article 12 are amended and supplemented as follows:

"4. For oil and gas projects within the investment decision-making authority of representatives of owners or Investors, within 25 working days from the date of receipt of complete and valid documents, the Ministry of Planning and Investment shall review the oil and gas project and issue the Investment Certificate.

5. For oil and gas projects formed through signing oil and gas contracts within the investment approval authority of the Prime Minister, within 20 working days from the date of receipt of complete and valid documents, the Ministry of Planning and Investment shall report the review results to the Prime Minister along with opinions of relevant ministries and agencies and recommendations regarding the project.

Within five working days from the date of receipt of the investment approval document from the Prime Minister, the Ministry of Planning and Investment shall issue the Investment Certificate.

6. In case the project dossier does not meet the conditions for issuing the Investment Certificate after review, the Ministry of Planning and Investment shall notify in writing, specifying the reasons for not approving the issuance of the Investment Certificate. The Investor has the right to appeal against the non-approval of the issuance of the Investment Certificate in accordance with the law."

Shortening the review period for issuing the Investment Certificate

8. Article 13 shall be amended and supplemented as follows:

“Article 13. The review and issuance of the Investment Certificate for oil and gas projects formed through transferring participation rights in oil and gas contracts, partial or full transfer of companies, and other oil and gas projects for which the Investor provides a clear explanation for requesting a shortened review period shall be carried out as follows:

1. The Investor sends to the Ministry of Planning and Investment and relevant ministries and agencies a request for shortening the review period along with the dossier in accordance with Article 11 of Decree No. 121/2007/NĐ-CP and Clause 5 of Article 1 of this Decree.

2. Within five working days from the date of receipt of complete and valid documents, the Ministry of Planning and Investment shall convene a meeting with relevant ministries and agencies to review and issue the Investment Certificate instead of soliciting opinions from ministries and agencies as stipulated in Clauses 2 and 3 of Article 12 of Decree No. 121/2007/NĐ-CP.

3. For oil and gas projects within the investment decision-making authority of representatives of owners or Investors, within three working days from the date of the meeting with ministries and agencies, the Ministry of Planning and Investment shall issue the Investment Certificate, except in cases where the review dossier for issuing the Investment Certificate is not approved. If the project dossier does not meet the conditions for issuing the Investment Certificate after review, the Ministry of Planning and Investment shall notify in writing, specifying the reasons for not approving the issuance of the Investment Certificate. The Investor has the right to appeal against the non-approval of the issuance of the Investment Certificate in accordance with the law.

4. For oil and gas projects within the investment approval authority of the Prime Minister, within three working days from the date of the meeting with ministries and agencies, the Ministry of Planning and Investment shall report the review results for issuing the Investment Certificate and recommendations regarding the project to the Prime Minister.

Within two working days from the date of receipt of the investment approval document from the Prime Minister, the Ministry of Planning and Investment shall issue the Investment Certificate.

Within two working days from the date of receipt of the investment approval document of the Prime Minister, the Ministry of Planning and Investment shall issue the Investment Certificate.

5. The Ministry of Planning and Investment shall send copies of the Investment Certificate to the Ministry of Industry and Trade, the Ministry of Finance, the State Bank of Vietnam, and the People's Committee of the province where the Investor registers business operations (for Investors that are organizations) or has permanent residence (for Vietnamese individual Investors).

9. Clause 1 of Article 14 shall be amended and supplemented as follows:

“1. When there is a need to adjust an oil and gas project which has already been granted an Investment Certificate concerning the form of investment, the implementation period of the project, or changes related to the Investor, the Operator, or the total investment amount of the project after adjustment increases by 30% or more compared to the total investment amount recorded in the Investment Certificate, then the Investor must go through the procedures to adjust the Investment Certificate.”

10. Clause 1 of Article 15 shall be amended and supplemented as follows:

“1. Oil and gas projects subject to registration for adjustment of the Investment Certificate are those that have been adjusted regarding the form of investment, the implementation period of the project, or changes related to the Investor, the Operator, or the total investment amount of the project after adjustment increases by 30% or more compared to the total investment amount recorded in the Investment Certificate, but the total investment amount after adjustment does not exceed 15 billion VND.”

11. Clause 1 of Article 16 shall be amended and supplemented as follows:

“1. Oil and gas projects subject to review for adjustment of the Investment Certificate are those whose total investment amount changes by 30% or more compared to the total investment amount recorded in the Investment Certificate and exceeds 15 billion VND after adjustment.”

12. Points d and đ of Clause 3 of Article 16 shall be amended and supplemented as follows:

“d) For oil and gas projects formed through signing oil contracts within the approval authority of the Prime Minister and oil and gas projects after adjustment with state capital usage of 30,000 billion VND or more or economic sector capital of 50,000 billion VND or more, within 25 working days from the date of receiving complete valid files, the Ministry of Planning and Investment shall submit a report on the review results along with opinions of relevant ministries and sectors and recommendations on adjusting the Investment Certificate to the Prime Minister.

Within 5 working days from the date of receiving the Prime Minister’s approval letter, the Ministry of Planning and Investment shall issue the adjusted Investment Certificate.

đ) For oil and gas projects not covered by point d of Clause 3 of this Article, the Ministry of Planning and Investment shall conduct the review and issue the adjusted Investment Certificate within 25 working days from the date of receiving complete valid files.”

13. Supplement Article 16a as follows:

“Article 16a. Shortening the Review and Issuance Period for Adjusted Investment Certificates

The review and issuance of adjusted Investment Certificates for oil and gas projects formed through the transfer of participation rights in oil contracts, partial or full company transfers, and other oil and gas projects where the Investor clearly explains urgent reasons for shortening the review period shall be conducted as follows:

1. The Investor shall submit a request for shortening the review period along with the required documents under Article 16 of Decree No. 121/2007/NĐ-CP to the Ministry of Planning and Investment and relevant ministries and sectors.

2. Within 5 working days from the date of receiving complete valid files, the Ministry of Planning and Investment shall convene a meeting with relevant ministries and sectors to review and issue the adjusted Investment Certificate instead of seeking opinions from ministries and sectors as stipulated in point c of Clause 3 of Article 16 of Decree No. 121/2007/NĐ-CP.

3. For oil and gas projects within the investment decision-making authority of the owner's representative or the Investor, within 3 working days from the date of the meeting with relevant ministries and sectors, the Ministry of Planning and Investment shall issue the adjusted Investment Certificate, except in cases where the review file for the adjusted Investment Certificate is not approved for adjustment. If the project file after review does not meet the conditions for issuing the adjusted Investment Certificate, the Ministry of Planning and Investment shall notify in writing, specifying the reasons for not approving the issuance of the adjusted Investment Certificate. The Investor has the right to appeal the non-approval of the issuance of the adjusted Investment Certificate according to the law.

4. For oil and gas projects within the investment approval authority of the Prime Minister and projects after adjustment with total investment amounts within the investment approval authority of the Prime Minister, within 3 working days from the date of the meeting with relevant ministries and sectors, the Ministry of Planning and Investment shall submit a report on the review results for the issuance of the adjusted Investment Certificate and recommendations on adjusting the project to the Prime Minister.

Within 2 working days from the date of receiving the Prime Minister’s approval letter, the Ministry of Planning and Investment shall issue the adjusted Investment Certificate.

5. The Ministry of Planning and Investment shall send copies of the adjusted Investment Certificate to the Ministry of Industry and Trade, the Ministry of Finance, the State Bank of Vietnam, and the People's Committee of the province where the Investor registers business operations (for Investors that are organizations) or has permanent residence (for Vietnamese individual Investors).”

14. Article 19 shall be amended and supplemented as follows:

“Article 19. Establishing a New Legal Entity and the Authority of the Operator

1. To prepare for investment or to carry out activities forming an oil and gas project or to implement an oil and gas project, the Investor is permitted to establish or participate in establishing a new enterprise in Vietnam, in the recipient country of investment, or in a third country in accordance with relevant laws.

2. In cases where the Investor authorizes the Operator to implement the oil and gas project, the Operator shall be named in the Investment Certificate issued to the Investor in accordance with Articles 10, 12, 13, 15, and 16 of Decree No. 121/2007/NĐ-CP and Clause 13 of Article 1 of this Decree. The Operator may use the Investment Certificate and the adjusted Investment Certificate for activities related to implementing the project. The Investor and the Operator are responsible for implementing the project in accordance with the Investment Certificate, the adjusted Investment Certificate, and the provisions of the law.”

15. Article 21 shall be amended and supplemented as follows:

“Article 21. Termination and Liquidation of Oil and Gas Projects

1. Prior to terminating the operation of the oil and gas project, the Investor must report to the competent authority as prescribed in Clause 3, Article 1 of this Decree for examination and decision.

2. The procedure for terminating the operation of an oil and gas project abroad shall be carried out in accordance with the provisions of the oil and gas contract and the laws of the host country.

16. Article 23 is amended and supplemented as follows:

"Article 23. Unrecoverable Costs

In cases where the oil and gas project is unable to recover costs, the Investor is permitted to allocate such portion of the costs into the production and business expenses of the Investor within a period not exceeding five years from the date of completion of the oil and gas project. For Investors subject to the provisions of Government Decree No. 142/2007/NĐ-CP dated September 5, 2007 on the Financial Management Regulations of the Vietnam Oil and Gas Group Parent Company, the oil and gas projects that are unable to recover costs of such Investors shall be implemented in accordance with the provisions of Government Decree No. 142/2007/NĐ-CP, Government Decree No. 121/2007/NĐ-CP, and this Decree."

17. Clause 1 of Article 24 is amended and supplemented as follows:

"1. After fulfilling all tax obligations and other financial obligations as prescribed by the laws of the host country and Vietnamese laws, the Investor may retain profits from the oil and gas project abroad for the following purposes:

a) Reinvestment in the oil and gas project which has been granted Investment Certificate and Investment Amendment Certificate.

b) Investment in other oil and gas projects abroad of the Investor which have been granted Investment Certificate and Investment Amendment Certificate."

18. Clause 2 of Article 30 is amended and supplemented as follows:

"2. The Investor may transfer foreign currency abroad before obtaining the Investment Certificate to meet the costs related to the formation of the oil and gas project as prescribed in Clause 2, Article 1 of this Decree."

19. The phrase "Ministry of Industry and Trade" replaces the phrases "Ministry of Industry" and "Ministry of Commerce" in Government Decree No. 121/2007/NĐ-CP.

20. The term "certify" replaces the term "notarize" in Articles 9, 11, 15, and 16 of Government Decree No. 121/2007/NĐ-CP.

Article 2. Effectiveness

This Decree takes effect from April 6, 2009.

Article 3. Responsibility for Implementation

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the Central Government shall be responsible for implementing this Decree.