Decision No. 199/2006/QD-TTg On the establishment of the Parent Company - Vietnam Oil and Gas Group

Pursuant to …;

Regarding the establishment of the Parent Company - Vietnam Oil and Gas Group

___________________

 

PRIME MINISTER

 

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

Pursuant to the State Enterprise Law dated November 26, 2003;

Pursuant to the Enterprise Law dated November 29, 2005;

Pursuant to Decree No. 153/2004/NĐ-CP dated August 9, 2004 of the Government on the organization, management, and transformation of state-owned corporations and independent state enterprises into parent companies and subsidiaries;

Pursuant to Decision No. 198/2006/QĐ-TTg dated August 29, 2006 of the Prime Minister approving the project for the formation of the National Oil and Gas Corporation of Vietnam;

Considering the proposal of the Board of Directors of the Vietnam Oil Corporation,

 

DECISION:

Article 1. The Parent Company - Vietnam Oil and Gas Group (hereinafter referred to as the Vietnam Oil and Gas Group) shall be established based on restructuring the management, operation, advisory, and project management departments of the Vietnam Oil Corporation.

1. The Vietnam Oil and Gas Group is a state enterprise with legal personality, seal, emblem, Articles of Organization and Operation; it is entitled to open accounts at the State Treasury and banks in accordance with the law; it operates independently and assumes responsibility for inheriting all legal rights, obligations, and legitimate interests of the Vietnam Oil Corporation as of January 1, 2006, following an audit.

2. Full name: Vietnam Oil and Gas Group.

International trade name: VIETNAM OIL AND GAS GROUP; abbreviated as PETROVIETNAM, acronym PVN.

3. Head office: located in Hanoi City.

4. Organizational structure of the Vietnam Oil and Gas Group at the time of establishment includes:

- Office, advisory and support departments for the Board of Directors and General Management Board;

- Project management boards where the Vietnam Oil and Gas Group is the principal investor;

- Information Technology Center;

- Branches and representative offices.

5. The charter capital of the Vietnam Oil and Gas Group is the ownership capital of the Vietnam Oil Corporation as of January 1, 2006, after auditing.

6. Business sectors of the Vietnam Oil and Gas Group:

- Research, exploration, exploitation, processing, storage, transportation of oil and gas, and provision of oil and gas services;

- Import and export of oil and gas materials, equipment, products, petrochemicals;

- Trading and distribution of oil, gas products, and petrochemical raw materials;

- Surveying, designing, constructing, operating, and repairing facilities and means serving oil and gas and civilian purposes;

- Consulting on investment construction, designing facilities and means serving oil and gas and civilian purposes; production and trading of building materials;

- Investment and trading in real estate;

- Production and trading in electricity;

- Financial, securities, banking, insurance activities;

- Training and supplying oil and gas manpower; labor export;

- Hotel, tourism, and business office operations;

- Other business sectors as prescribed by law.

7. Management and operational structure of the Vietnam Oil and Gas Group includes:

a) The Vietnam Oil and Gas Group's Board of Directors represents the direct state ownership at the Vietnam Oil and Gas Group, consisting of a maximum of nine members. Among them, one representative from the Ministry of Industry and one representative from the Ministry of Finance serve as concurrently appointed members. Members of the Board of Directors are appointed by the Prime Minister upon the recommendation of the Minister of Industry;

b) The Vietnam Oil and Gas Group's Audit Board is appointed by the Vietnam Oil and Gas Group's Board of Directors, consisting of a maximum of five members, including the Chairman of the Audit Board who is also a member of the Board of Directors;

c) The General Director of the Vietnam Oil and Gas Group is appointed, dismissed, or contracted by the Vietnam Oil and Gas Group's Board of Directors after approval by the Prime Minister;

d) Supporting the General Director are Deputy General Directors and Chief Accountants appointed by the Vietnam Oil and Gas Group's Board of Directors upon the recommendation of the General Director;

đ) The advisory staff for the Board of Directors and the General Director of the Vietnam Oil and Gas Group include an office and functional departments providing advice.

8. The relationship between the Vietnam Oil and Gas Group and the state owner and its affiliated units shall be carried out in accordance with the law and the Articles of Organization and Operation of the Vietnam Oil and Gas Group.

9. The financial mechanism of the Vietnam Oil and Gas Group is stipulated in the Government's Decree.

10. The Government shall uniformly manage and implement the rights and obligations of the state owner towards the Vietnam Oil and Gas Group. The Prime Minister assigns Ministers, Heads of Ministries equivalent to Ministries, and the Vietnam Oil and Gas Group's Board of Directors to exercise certain rights of the owner as prescribed by law. Specifically as follows:

a) The Prime Minister decides:

- Approving the objectives, strategies, long-term plans, and business sectors of the Vietnam Oil and Gas Group upon the proposal of the Vietnam Oil and Gas Group's Board of Directors and opinions of the Ministries of Industry, Finance, and Planning and Investment;

- Approving the Articles of Organization and Operation, and approving amendments and supplements to the Articles of Organization and Operation of the Vietnam Oil and Gas Group upon the proposal of the Vietnam Oil and Gas Group's Board of Directors and opinions of the Ministries of Industry, Finance, and Planning and Investment.

- Restructuring, dissolving, and diversifying ownership of the Vietnam Oil and Gas Group upon the proposal of the Vietnam Oil and Gas Group's Board of Directors and opinions of the Ministries of Industry, Finance, and Planning and Investment.

- Appointing the Chairman and members of the Vietnam Oil and Gas Group's Board of Directors upon the proposal of the Minister of Industry and the review of the Ministry of Home Affairs;

- Approving the appointment or contracting of the General Director of the Vietnam Oil and Gas Group upon the proposal of the Vietnam Oil and Gas Group's Board of Directors and the review of the Ministry of Industry;

- Approving the establishment of new enterprises invested 100% by the Vietnam Oil and Gas Group; reorganization, ownership conversion, dissolution, and bankruptcy of affiliated enterprises of the Vietnam Oil and Gas Group; the Vietnam Oil and Gas Group's acceptance of new members;

- Approving investment projects of the Vietnam Oil and Gas Group, and investment projects outside the Vietnam Oil and Gas Group within the Prime Minister's decision-making authority as prescribed by the law on investment.

||| Decide on the investment of capital to form the charter capital and adjust the charter capital during the operation for the Vietnam Oil and Gas Group according to the proposal of the Board of Directors of the Vietnam Oil and Gas Group and the opinions of the Ministries of Industry, Finance, Planning and Investment.

b) The Ministry of Industry:

||| Submit to the Prime Minister for decision on the appointment of the Chairman and members of the Board of Directors of the Vietnam Oil and Gas Group;

||| Examine the implementation of procedures, formalities, standards, and conditions for appointing or signing contracts with the General Director of the Vietnam Oil and Gas Group proposed by the Board of Directors of the Vietnam Oil and Gas Group to the Prime Minister;

||| Direct the implementation and monitor the achievement of the goals, strategies, and long-term plans of the Vietnam Oil and Gas Group approved by the Prime Minister;

||| Report to the Prime Minister comments when the Board of Directors of the Vietnam Oil and Gas Group submits to the Prime Minister on:

||| + Goals, strategies, long-term plans, and business sectors and industries of the Vietnam Oil and Gas Group;

||| + Bylaws, approval of amendments and supplements to the bylaws of the Vietnam Oil and Gas Group;

||| + Restructuring, dissolution, and diversification of ownership of the Vietnam Oil and Gas Group.

||| Supervise the implementation of investment projects of the Vietnam Oil and Gas Group within its authority as prescribed by laws on investment.

c) Ministry of Finance:

||| Implement the investment of capital to form the charter capital and adjust the charter capital during the operation of the Vietnam Oil and Gas Group after being ||| approved by the Prime Minister;

||| Inspect and supervise the use of capital, implement the Decree on financial mechanisms for the Vietnam Oil and Gas Group; evaluate the effectiveness of business operations and management activities of the Board of Directors of the Vietnam Oil and Gas Group.

d) The Ministry of Home Affairs:

||| Examine the procedures, formalities, standards, and conditions for appointing the Chairman and members of the Board of Directors of the Vietnam Oil and Gas Group submitted by the Ministry of Industry to the Prime Minister;

||| Guide the procedures for appointing, dismissing, removing from office, rewarding, and disciplining the Chairman and members of the Board of Directors of the Vietnam Oil and Gas Group.

đ) The Ministry of Planning and Investment:

||| Supervise the implementation of objectives and tasks assigned by ||| the Prime Minister to the Vietnam Oil and Gas Group.

e) Ministries, agencies at the ministerial level, and government agencies perform state management functions in relevant fields concerning the Vietnam Oil and Gas Group;

g) The Board of Directors of the Vietnam Oil and Gas Group is the direct representative of the State's ownership at the Vietnam Oil and Gas Group and represents the ownership for companies invested entirely with the charter capital by the Vietnam Oil and Gas Group.

The Board of Directors of the Vietnam Oil and Gas Group:

||| Submit to the Prime Minister for approval, amendment, and supplementation of the Charter on Organization and Operation of the Vietnam Oil and Gas Group;

||| Develop proposals for establishing new organizations, restructuring, dissolving, and converting ownership within the Vietnam National Oil and Gas Group, submit to the Prime Minister; implement according to the approved proposal;

||| Decide on the goals, strategies, long-term plans, and business sectors of the Vietnam Oil and Gas Group after being approved by the Prime Minister and of companies wholly owned by the Vietnam Oil and Gas Group;

||| Approve bylaws, approve amendments and supplements to the bylaws of wholly-owned subsidiaries by the Vietnam Oil and Gas Group;

||| Decide on the use, investment, and adjustment of capital and other resources invested by the Vietnam Oil and Gas Group in subsidiaries but must ensure the required charter capital when establishing enterprises or the statutory capital for industries and businesses as prescribed by law;

||| Decide on using the capital of the Vietnam Oil and Gas Group to invest in setting up subsidiaries wholly owned by the Vietnam Oil and Gas Group but not exceeding the investment capital under the authority of the Board of Directors to decide and after obtaining the Prime Minister's approval;

||| Approve proposals for contributing capital from wholly-owned subsidiaries to establish new state-owned joint-stock companies, state-owned limited liability companies with one member, and state-owned limited liability companies with two or more members outside the scope and areas specified in Article 6 of the Law on State-Owned Enterprises;

||| Decide on group A investment projects within the planning and five-year development plan of the Vietnam National Oil and Gas Group approved by the Prime Minister;

||| Decide or authorize the General Director to decide on joint venture capital contribution projects with foreign investors and overseas investment projects of wholly-owned subsidiaries within the authority of the Board of Directors as prescribed by laws on investment;

||| Decide on the appointment, dismissal, removal from office, signing of contracts, termination of contracts, rewards, and punishments of the General Director after obtaining the Prime Minister's approval;

||| Inspect and supervise the Chairman and members of the Board of Directors, Chairmen of companies, General Directors, and directors of subsidiary units in performing their functions and duties as prescribed by the Law on State-Owned Enterprises, the Law on Enterprises, and the Charter on Organization and Operation of the Vietnam Oil and Gas Group.

11. Subsidiaries of the Vietnam Oil and Gas Group:

a) Holding companies operating under the parent company-subsidiary model, where the Vietnam Oil and Gas Group holds 100% of the charter capital:

||| PetroVietnam Exploration Production Joint Stock Company (formed based on the organization and reorganization of units engaged in oil and gas exploration and exploitation);

||| PetroVietnam Gas Corporation (formed based on the reorganization of PetroVietnam Gas Processing and Trading Corporation and other units engaged in wholesale gas production and business, joint ventures, and project management boards);

||| PetroVietnam Power Corporation (to be newly established when power plants invested by the Vietnam Oil and Gas Group commence operations);

||| PetroVietnam Refining and Petrochemical Corporation (to be newly established when oil refining and petrochemical plants invested by the Vietnam Oil and Gas Group commence operations).

The management structure of the above holding companies includes: Chairman of the Holding Company, General Director of the Holding Company, Deputy General Directors of the Holding Company, Chief Accountant of the Holding Company, and supporting staff.

b) Joint stock companies with limited liability owned 100% by the Vietnam Oil and Gas Group (to be implemented in 2006-2007):

- Oil Finance Company;

- Oil Trading Company;

- Oil Product Processing and Marketing Company;

- Oil Labor Supply and Export Limited Liability Company (newly established).

c) Companies held over 50% of charter capital by the Vietnam Oil and Gas Group:

- Joint stock companies:

+ Oil Technical Services Joint Stock Company;

+ Oil Tourism Services Joint Stock Company;

+ Oil Drilling and Well Services Joint Stock Company;

+ Oil Investment Consulting and Design Joint Stock Company;

+ Oil Construction Joint Stock Company;

+ Oil Drilling Fluids and Chemicals Joint Stock Company.

- Companies undergoing shareholding reform in 2006-2007:

+ Oil Insurance Company;

+ Oil Transport Company;

+ Oil Fertilizer and Chemicals Company.

d) Joint ventures:

- Vietnam-Soviet Oil Joint Venture Enterprise;

- Mekong Oil Joint Venture Company.

đ) New enterprises established in accordance with the law:

- Oil Real Estate Joint Stock Company;

- Oil Securities Joint Stock Company;

- Oil Commercial Bank.

12. Associated companies held less than 50% of charter capital by the Vietnam Oil and Gas Group:

a) Companies undergoing shareholding reform in 2006-2007:

- Northern Liquid Natural Gas Business Company;

- Southern Liquid Natural Gas Business Company.

b) Other companies formed in accordance with the law.

13. Science and technology enterprises: established based on restructuring the Oil Institute and research units within the Vietnam Oil General Corporation.

14. Training institutions:

- Oil Human Resources Training School;

- Oil University (to be established when conditions are met, operating under a business mechanism).

15. The Board of Directors of the Vietnam Oil and Gas Group supplements subsidiaries, associated companies, and other units in accordance with the law.

Article 2. Implementation organization:

1. The Ministry of Industry shall submit to the Prime Minister for decision on appointing the Chairman and members of the Board of Directors of the Vietnam Oil and Gas Group, no later than the fourth quarter of 2006.

2. The Ministry of Finance, in coordination with the Ministry of Industry, the Board of Directors of the Vietnam Oil and Gas Group, and relevant agencies, shall draft and submit to the Government for promulgation a Decree of the Government on the financial mechanism for the Vietnam Oil and Gas Group.

3. The Chairman and members of the Board of Directors, and the General Director of the Vietnam Oil General Corporation, shall continue to manage and operate the Vietnam Oil and Gas Group until the Chairman and members of the Board of Directors, and the General Director of the Vietnam Oil and Gas Group are appointed in accordance with the law.

4. The Board of Directors of the Vietnam Oil and Gas Group:

- Shall submit to the Prime Minister for approval the Charter on organization and operation of the Vietnam Oil and Gas Group.

- Shall submit to the Prime Minister for approval to appoint or enter into contracts with the General Director of the Vietnam Oil and Gas Group.

- Shall submit to the Prime Minister for approval the project to establish the general corporations mentioned in point a, Clause 11, and the formation of the companies mentioned in point đ, Clause 11, and Clause 13, Article 1 of this Decision; decide on the formation of the companies mentioned in point b, Clause 11, Article 1 of this Decision.

- Shall submit to the Ministry of Industry for decision on the shareholding reform of the companies mentioned in point c, Clause 11, and Clause 12, Article 1 of this Decision.

Article 3. This Decision takes effect fifteen days after its publication in the Official Gazette.

Ministers of the Ministries of Industry, Finance, Planning and Investment, Labor, War Invalids and Social Affairs, Home Affairs, Heads of relevant agencies, Steering Committee for Enterprise Reform and Development, Board of Directors of the Vietnam Oil General Corporation, and Board of Directors of the Vietnam Oil and Gas Group are responsible for implementing this Decision.