Decision No. 40/2007/QĐ-TTg On the Removal of Fixed Structures, Equipment, and Means Serving Oil Activities

DECISION OF THE PRIME MINISTER

On the clearance of fixed structures, equipment and means serving oil and gas activities

and means serving petroleum activities

____________

PRIME MINISTER

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

Pursuant to the Oil Law dated July 6, 1993 and the Law Amending and Supplementing Certain Provisions of the Oil Law dated June 9, 2000;

Pursuant to Decree No. 48/2000/NĐ-CP dated September 12, 2000 of the Government detailing the implementation of the Oil Law;

Considering the proposal of the Minister of Industry,

DECISION:

PART I

GENERAL PROVISIONS

Article 1. Scope of regulation and applicable subjects

This Decision stipulates the clearance of fixed structures, equipment and means serving oil and gas activities by organizations and individuals conducting oil and gas activities in Vietnam (hereinafter referred to as organizations and individuals).

Article 2. Application of international treaties and agreements in oil and gas contracts

1. In cases where international treaties to which the Socialist Republic of Vietnam has signed or acceded provide different provisions from those of this Decision, the provisions of such international treaties shall be followed.

2. The provisions of this Decision apply to all oil and gas contracts already concluded. As for the financial guarantee for the clearance of fixed structures, equipment and means as provided for in Chapter IV of this Decision, if there are different agreements in the oil and gas contracts already concluded compared to the provisions of this Decision, they shall be implemented according to the agreements in those oil and gas contracts.

Article 3. General Principles

1. Organizations and individuals responsible for clearing fixed structures, equipment and means must do so according to the approved plan for the clearance of fixed structures, equipment and means by the Ministry of Industry. In cases where the Ministry of Industry requests not to clear all or part of the fixed structures, equipment and means, organizations and individuals must comply with such requests.

2. The clearance of fixed structures, equipment and means must ensure requirements for land protection, restoration of ecological environmental conditions, traffic safety, and other marine resources.

3. Fixed structures, equipment and means must be designed to ensure their ability to be cleared after the completion of operations.

Article 4. Definitions

In this Decision, the following terms shall be understood as follows:

1. "Fixed structure" refers to construction and installation works that are permanently established and used to serve oil and gas activities;

2. "Buried pipeline" refers to pipelines buried deep in trenches according to designs approved by competent authorities;

3. "Exposed section of pipeline" refers to sections of buried pipelines that, over time, due to erosion of protective coatings, become exposed or displaced from their original positions;

4. "Clearance plan for fixed structures, equipment and means" refers to a document containing technical and technological solutions, total costs, and schedules related to the clearance of fixed structures, equipment and means serving oil and gas activities;

5. "Foundation block of offshore fixed structures" refers to steel structures fixed by steel or concrete piles driven deeply into the seabed to support the upper structure;

6. "Upper structure" refers to the topmost part of a fixed structure, comprising structural components and equipment placed on the foundation block;

7. "Equipment" refers to mechanical and electronic components installed and used to serve oil and gas activities.

Chapter II

REQUIREMENTS FOR THE CLEARANCE

OF FIXED STRUCTURES, EQUIPMENT AND MEANS

Article 5. Clearance of oil and gas wells

The clearance of oil and gas wells must follow the procedures for well preservation and abandonment prescribed by the Ministry of Industry.

Article 6. Clearance of upper structures and accompanying equipment

Organizations and individuals must clear and bring ashore the upper structures and accompanying equipment of fixed structures for reuse or disposal at designated locations. Waste materials before disposal must be treated in accordance with laws on environmental protection, maritime affairs, and fisheries.

Article 7. Clearance of foundation blocks and accompanying equipment

1. Foundation blocks of offshore fixed structures and accompanying equipment must be cleared for reuse or disposal at designated locations.

2. Piles, pipes, and structures embedded in the seabed must be cut below the natural seabed surface so as not to protrude and obstruct transportation, fishing, and other activities.

Article 8. Floating means

Floating means, structures, and accompanying equipment must be removed from their operational positions, transferred elsewhere for reuse or storage, or disposed of in accordance with the law.

Article 9. Clearance of submarine pipelines

1. Organizations and individuals must carry out the clearance of all floating pipelines and exposed sections of pipelines. The clearance of floating pipelines and exposed sections can only be carried out once these pipelines have been cleaned of oil, gas, and chemicals.

2. Organizations and individuals are not required to clear buried pipelines but must clean them of oil, gas, and chemicals.

Article 10. Special cases

1. During oil and gas operations, organizations and individuals must immediately commence partial or full clearance of fixed structures, equipment, and means if these structures, equipment, and means suffer severe damage or deterioration affecting the safety and efficiency of oil and gas operations.

2. When carrying out the clearance of fixed structures, equipment, and means, if unforeseen causes arise that hinder the clearance work and prevent its completion within the schedule, organizations and individuals may develop an adjusted plan and submit it to the Ministry of Industry for approval.

Article 11. Waste management

Prior to the clearance of fixed structures, equipment, and means, organizations and individuals must collect and treat solid and liquid waste attached to these structures, equipment, and means in accordance with laws on waste management.

Article 12. Requirements for safety and environmental protection

1. Contents ensuring safety and environmental protection must be included in the clearance plan for fixed structures, equipment, and means.

2. Before implementing the clearance of fixed structures, equipment, and means, organizations and individuals must submit safety documents as prescribed in Articles 4, 5, and Article 39 of the Safety Management Regulations for Oil and Gas Activities issued together with Decision No. 41/1999/QĐ-TTg dated March 8, 1999 of the Prime Minister to the Ministry of Industry.

3. Environmental monitoring program:

a) Prior to commencing clearance activities, organizations and individuals must conduct environmental monitoring, prepare an Environmental Monitoring Report, and submit it to the Ministry of Natural Resources and Environment;

b) The network of monitoring stations, environmental analysis parameters, and assessment shall be organized similarly to the environmental monitoring during the oil and gas exploitation process;

c) Within nine months from the completion of the removal of fixed structures, equipment, and vessels, organizations and individuals must organize environmental monitoring, prepare an Environmental Monitoring Report, and submit it to the Ministry of Natural Resources and Environment. The Environmental Monitoring Report must assess the impacts that have occurred during the removal of fixed structures, equipment, and vessels.

Article 13. Removal of fixed structures, equipment, and vessels on land

The Ministry of Industry shall specify the details regarding the removal of fixed structures, equipment, and vessels on land.

Article 14. Report on the removal of fixed structures, equipment, and vessels

Within nine months from the completion of the removal of fixed structures, equipment, and vessels, organizations and individuals must prepare a report on the completion of the removal of fixed structures, equipment, and vessels and submit it for approval by the Ministry of Industry.

Within thirty working days from the date of receipt of the report, the Ministry of Industry shall review and approve the report. In cases where the requirements for removal according to the approved plan for the removal of fixed structures, equipment, and vessels are not met, the Ministry of Industry has the right to require organizations and individuals to comply with those requirements and supplement the report for re-examination.

Chapter III

ESTABLISHMENT AND APPROVAL OF REMOVAL PLANS

OF FIXED STRUCTURES, EQUIPMENT AND MEANS

Article 15. Submission of the removal plan for fixed structures, equipment, and vessels

1. Within one year from the start of commercial exploitation, organizations and individuals must prepare a removal plan for fixed structures, equipment, and vessels and submit it for examination and approval by the Ministry of Industry.

2. For organizations and individuals currently conducting oil and gas exploitation but have not yet submitted a removal plan for fixed structures, equipment, and vessels, they must prepare such a plan and submit it for approval by the Ministry of Industry in accordance with this Decision and other relevant laws.

Article 16. Removal Plan for Fixed Structures, Equipment, and Vessels

1. The basic contents of the removal plan for fixed structures, equipment, and vessels include:

a) Introduction to the removal plan for fixed structures, equipment, and vessels;

b) Summary of the content of the removal plan for fixed structures, equipment, and vessels; implementation solutions for the removal;

c) List of types of structures, equipment, and vessels to be removed;

d) Detailed description of the components of fixed structures, equipment, and vessels to be removed;

đ) Removal options;

e) Content related to safety and environmental protection;

g) Pipeline removal;

h) Debris removal;

i) Total removal costs;

k) Implementation schedule;

l) Project management and inspection procedures;

m) Supporting research results.

2. Adjusted plans: During the course of oil and gas operations, if deemed necessary, organizations and individuals may prepare adjusted plans and submit them for approval by the Ministry of Industry.

Article 17. Approval time limit for the removal plan for fixed structures, equipment, and vessels

Within thirty working days from the date of receipt of the application file for the removal plan for fixed structures, equipment, and vessels or the adjusted plan from organizations and individuals, the Ministry of Industry shall issue a decision on approval.

If the removal plan for fixed structures, equipment, and vessels or the adjusted plan is not approved, the Ministry of Industry must notify the organization or individual and clearly state the reasons for non-approval.

Chapter IV

ENSURING FINANCIAL OBLIGATIONS FOR REMOVAL

OF FIXED STRUCTURES, EQUIPMENT AND MEANS

Article 18. Method of establishing a financial guarantee fund

Ensuring financial obligations for the removal of fixed structures, equipment, and vessels shall be carried out through the establishment of a financial guarantee fund.

Article 19. Time limit for establishing a financial guarantee fund

1. Within one year from the date of the first production of oil or gas, organizations and individuals must establish a financial guarantee fund for the removal of fixed structures, equipment, and vessels.

2. For organizations and individuals currently conducting oil and gas exploitation but have not established a financial guarantee fund for the removal of fixed structures, equipment, and vessels, they must establish such a fund immediately upon the effectiveness of this Decision.

Article 20. Principles for setting up, adjusting, and finalizing the financial guarantee fund

1. The financial guarantee fund for the removal of fixed structures, equipment, and vessels shall be set up annually in accordance with Article 21 of this Decision. The level of contribution to the Fund by each organization or individual shall correspond to their share in the oil and gas contract and shall be included in the recovery costs.

2. Within one year before the end of the oil and gas contract or the end of the exploitation period specified in the approved field development plan by the Prime Minister, organizations and individuals must reassess the financial guarantee fund based on the reassessment of total removal costs and production within the framework of the oil and gas contract and recoverable reserves at that time.

If the surplus in the Fund exceeds the necessary amount for the removal of fixed structures, equipment, and vessels, the excess amount will be distributed back to the organizations and individuals according to their share in the oil and gas contract.

If the surplus in the Fund is insufficient compared to the necessary amount for the removal of fixed structures, equipment, and vessels, within six months before the end of the oil and gas contract or the end of the exploitation period, organizations and individuals must contribute according to their share in the oil and gas contract.

3. Upon completion of the removal of fixed structures, equipment, and vessels, organizations and individuals must conduct a settlement consistent with the accounting principles agreed upon in the oil and gas contract. If the fund is not fully utilized, the remaining amount will be redistributed among the organizations and individuals according to the profit-sharing ratio if the surplus is part of the recovered costs or the capital contribution ratio if the surplus is part of the unrecovered costs.

Article 21. Level of contribution to the financial guarantee fund

The annual level of contribution to the financial guarantee fund for the removal of fixed structures, equipment, and vessels shall be determined according to the following formula:

Article 22. Management and Utilization of Financial Obligation Guarantee Fund

1. The management of the financial obligation guarantee fund for the cleanup of fixed structures, equipment, and means shall be carried out by the Vietnam Oil and Gas Group.

2. During the period when the financial guarantee fund is not utilized, the Vietnam Oil and Gas Group shall deposit the amount of the financial obligation guarantee fund into a separate interest-bearing account at a credit institution in Vietnam. Interest generated annually after fulfilling financial obligations to the State shall be credited to the financial obligation guarantee fund.

3. The financial obligation guarantee fund shall be used for the purpose of cleaning up fixed structures, equipment, and means. Organizations and individuals may use the funds in the Guarantee Fund to fulfill their cleanup obligations for fixed structures, equipment, and means according to the approved cleanup plan.

4. In cases where all or part of the fixed structures, equipment, and means are not cleaned up as stipulated in Clause 1, Article 3 of this Decision, the financial obligation guarantee fund shall still be managed by the Vietnam Oil and Gas Group and used for cleanup when such fixed structures, equipment, and means cease operations.

Chapter V

IMPLEMENTING PROVISIONS

Article 23. Responsibilities of Ministries

1. Ministry of Industry

Lead and coordinate with the Ministries of Transport, Natural Resources and Environment, Construction, Finance, and Fisheries to conduct inspections and oversight of the cleanup activities of fixed structures, equipment, and means.

2. Ministry of Finance

Coordinate with the Ministry of Industry to provide detailed guidance on the management and utilization of the financial obligation guarantee fund for the cleanup of fixed structures, equipment, and means.

3. Ministries of Natural Resources and Environment, Construction, Transport, and Fisheries within their respective functions and authorities shall cooperate with the Ministry of Industry to perform state management functions over the cleanup activities of fixed structures, equipment, and means.

Article 24. Responsibilities of the Vietnam Oil and Gas Group

1. Monitor the cleanup activities of fixed structures, equipment, and means conducted by organizations and individuals.

2. Manage the financial obligation guarantee fund based on principles of safety, efficiency, and unconditional responsibility for returning the amount in the financial obligation guarantee fund, including interest, to enable organizations and individuals to fulfill their cleanup obligations for fixed structures, equipment, and means.

3. Annually report to organizations and individuals on the management and utilization of the financial obligation guarantee fund. Exchange and agree with organizations and individuals on the use of the financial obligation guarantee fund.

4. Be subject to inspection by the Ministry of Finance and the Ministry of Industry regarding the management of the financial obligation guarantee fund.

Article 25. Handling of violations

Organizations and individuals violating the provisions of this Decision shall be dealt with according to the law.

Article 26. Effectiveness

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

Article 27. Implementation

1. The Ministry of Industry shall guide and organize the implementation of this Decision.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the central government are responsible for implementing this Decision./.