Decision No. 49/2017/QD-TTg On the removal of facilities, equipment, and means serving oil and gas activities

Pursuant to …;

Regarding the clearance of facilities, equipment, and means serving oil and gas activities

for oil and gas activities

||| Pursuant to the Law on Organization of the Government dated June 19, 2015;

Pursuant to the Oil Law dated July 6, 1993; the Law Amending and Supplementing Certain Provisions of the Oil Law dated June 9, 2000; the Law Amending and Supplementing Certain Provisions of the Oil Law dated June 3, 2008;

Decree No. Decree No. 95/2015/NĐ-CP dated October 16, 2015 of the Government detailing certain provisions of the Oil Law;

At the proposal of the Minister of Industry and Trade,

The Prime Minister issues this Decision on the clearance of facilities, equipment, and means serving oil and gas activities:

 

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

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

Article 2. Application of agreements in oil contracts

1. The provisions of this Decision shall apply to oil contracts and gas facilities with investment project approval decisions made by competent authorities before and after the effective date of this Decision.

2. In cases where oil contracts already signed contain specific agreements regarding financial guarantees different from the provisions on setting up a fund for financial obligations related to the clearance of oil and gas facilities under Chapter IV of this Decision, organizations and individuals shall implement according to the agreements in those oil contracts.

Article 3. General Principles

1. Organizations and individuals responsible for clearing oil and gas facilities must follow the approved oil and gas facility clearance plan by the Ministry of Industry and Trade and comply with the provisions of this Decision and relevant legal documents. In cases where the approved oil and gas facility clearance plan requires that not all or part of the oil and gas facilities be cleared, organizations and individuals shall implement accordingly.

2. The clearance of oil and gas facilities must ensure safety for people, protect the environment; requirements for protecting underground areas, restoring the environment, ensuring traffic safety, and other resources of the sea and land where the facilities are constructed.

3. Oil and gas facilities must be designed to ensure they can be cleared when the project ends or when they are no longer needed for oil and gas activities or do not guarantee safety for people and the environment.

Article 4. Definitions

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

1. "Oil and gas exploration, development, and production facilities" are floating platforms, combinations of equipment, structures built, equipped, and installed either permanently or temporarily on land or in marine areas to serve oil and gas exploration, development, and production activities.

2. "Gas facilities" are facilities and equipment serving the collection, processing, and transportation of gas, offshore gas pipelines, onshore gas pipelines, gas processing plants, distribution stations, and pipelines from gas processing plants to end-users (excluding low-pressure gas pipelines or similar pipelines supplying end-users).

3. "Buried pipeline" is a pipeline buried under the ground or seabed according to a design approved by the competent authority;

4. "Exposed pipeline section" is a section of a buried pipeline that has been exposed due to erosion of its protective layer over time, moved from its original position, or placed on the surface of the sea, land, or river/lake.

5. "Oil and gas facility clearance plan" is a document containing contents related to the clearance plan, technical solutions, environmental protection measures, total costs, and schedule for clearing fixed facilities, equipment, and means serving oil and gas activities.

6. "Foundation block" is a steel structure fixed by steel or concrete piles driven deep into the seabed to support the upper structure;

7. "Upper structure" is the top part of the facility, consisting of structures and equipment placed on the foundation block;

8. "Gas processing plant" is a place where gas is received and processed;

9. "Equipment" is a combination of mechanical and electronic components installed and used to serve oil and gas activities;

10. "Gas distribution station" is a place where treated gas is received and distributed to organizations and individuals consuming it;

 

Chapter II

ESTABLISHMENT, REVIEW AND APPROVAL OF THE CLEARANCE PLAN

CLEARANCE IMPLEMENTATION AND COMPLETION REPORT

Article 5. Submission of Decommissioning Plan for Oil and Gas Facilities

Within nine months from the date of commercial exploitation or one year from the date of operation of the oil and gas facility, organizations and individuals must prepare a decommissioning plan for the oil and gas facility and submit it to the Ministry of Industry and Trade for examination and approval.

Article 6. Submission for Approval of Decommissioning Plan for Oil and Gas Facilities

1. Organizations and individuals shall submit one set of documents directly to the Ministry of Industry and Trade or via postal service.

2. The documents for submission for approval of the decommissioning plan for oil and gas facilities include:

a) A request for approval of the decommissioning plan for oil and gas facilities;

b) A consent document from Vietnam Oil and Gas Group regarding the decommissioning plan for oil and gas facilities (applicable to oil and gas contractors and member enterprises of Vietnam Oil and Gas Group);

c) One copy of the decommissioning plan for oil and gas facilities;

d) Twenty-five copies of the summary of the decommissioning plan for oil and gas facilities.

3. The basic contents of the decommissioning plan for oil and gas facilities include:

a) Introduction to the decommissioning plan for oil and gas facilities;

b) Summary of the contents of the decommissioning plan for oil and gas facilities;

c) List of equipment, facilities, and structures of the oil and gas facility to be decommissioned;

d) Detailed description of the equipment, facilities, and structures of the oil and gas facility to be decommissioned;

đ) Technical solutions and methods for implementing the decommissioning process;

e) Waste management plan and marine environmental pollution control plan (including detailed descriptions of types, quantities of waste, collection, storage, transportation, and treatment during the decommissioning process; emergency response plan for environmental incidents);

g) Total decommissioning costs, plan and schedule for establishing a financial guarantee fund for decommissioning the oil and gas facility;

h) Implementation schedule;

i) Project management and inspection procedures;

k) Supporting research results (if any);

n) Other relevant contents.

Article 7. Review and Approval Process for Decommissioning Plan for Oil and Gas Facilities

1. Within fifteen working days from the date of receipt of the complete decommissioning plan for oil and gas facilities according to this Decision, the Ministry of Industry and Trade shall lead and coordinate with relevant ministries and sectors to review. Within fifteen working days from the date of review, the Ministry of Industry and Trade shall examine and approve the decommissioning plan for oil and gas facilities.

2. In cases where the review results indicate that modifications or supplements to the decommissioning plan for oil and gas facilities are necessary, within five working days from the date of review, the Ministry of Industry and Trade shall issue a document requesting organizations and individuals to revise, complete, or explain the review comments.

Within fifteen working days from the date of receipt of the modified or supplemented decommissioning plan for oil and gas facilities or explanations from organizations and individuals, the Ministry of Industry and Trade shall examine and approve.

Article 8. Update and Adjustment of Decommissioning Plan for Oil and Gas Facilitiesupdate, adjust the cleanup plan 1. Organizations and individuals must update and adjust the decommissioning plan for oil and gas facilities when any of the following situations occur:

a) When the development plan for the field or early production plan or pipeline construction project or oil and gas facility construction project is approved and adjusted, or the oil and gas facility is upgraded, expanded, or additional investment projects are added leading to a forecast change of more than twenty percent (20%) in the total decommissioning cost of the oil and gas facility compared to the most recently approved plan;

b) Within one year before the end of the oil and gas contract or the end of the oil and gas exploitation period or the end of the operation of the gas facility;

c) When the oil and gas facility cannot ensure safety for continued operation and/or suffers an incident that cannot be repaired or remedied;

d) Partial decommissioning or postponement of decommissioning of the oil and gas facility.

2. Organizations and individuals shall submit one set of documents for the adjusted decommissioning plan for oil and gas facilities according to the provisions of Clause 3 of this Article, either directly at the Ministry of Industry and Trade or via postal service.

3. The documents for submission of the adjusted decommissioning plan for oil and gas facilities include:

a) A request for approval of the adjusted decommissioning plan for oil and gas facilities;

b) A consent document from Vietnam Oil and Gas Group regarding the adjusted decommissioning plan for oil and gas facilities (applicable to oil and gas contractors and member enterprises of Vietnam Oil and Gas Group);

c) One copy of the adjusted decommissioning plan for oil and gas facilities;

d) Twenty-five copies of the summary of the adjusted decommissioning plan for oil and gas facilities.

4. The basic contents of the adjusted decommissioning plan for oil and gas facilities include:

a) Contents already approved;

b) Changes from the previously approved contents, clearly stating the reasons for the changes;

c) One copy of the previous decommissioning plan approval decisions; the previous adjusted decommissioning plan (if applicable).

5. The procedure for examining and approving the adjusted decommissioning plan for oil and gas facilities shall be carried out according to the provisions of Article 7 of this Decision.

Preparation and

Article 9. Reporting Completion of Decommissioning price framework for power generation 1. Within nine months from the completion of the decommissioning activities, organizations and individuals must prepare a report on the completion of decommissioning of the oil and gas facility and submit it to the Ministry of Industry and Trade for approval. 1. Organizations and individuals must update and adjust the decommissioning plan for oil and gas facilities when any of the following situations occur:

2. The basic contents of the report on the completion of decommissioning of the oil and gas facility include:

a) Description of the actual oil and gas facility and decommissioning activities performed;

b) Progress of the decommissioning activities;

c) Presentation and evaluation of differences between actual decommissioning activities and the approved plan (if applicable);

d) Actual decommissioning costs;

đ) Summary of environmental safety measures implemented including: actual waste collection, transportation, and disposal plans,...

e) Commitment to responsibility for remaining facilities (if applicable);

g) Conclusions and recommendations (if applicable).

3. The procedure and formalities for approving the report on the completion of decommissioning of the oil and gas facility shall be carried out according to the provisions of Article 7 of this Decision.

Decommissioning of Exploration, Development, and Production Facilities

Chapter III

WELL DECOMMISSIONING

Section 1

Cleanup of facilities

Decommissioning of Fixed Offshore Facilities

Article 10. Cleanup of fixed marine structures

1. Removal of Topside Structures and Associated Equipment

a) The technological systems (trees, manifolds, separators, storage tanks, oil pumps, pipelines,...), fluid systems, cementing systems, energy systems, fire prevention and extinguishing systems, drilling frames, production conduits, protective structures, anchors and anchor points, mooring lines, risers and riser bases,... must be cleaned before removal or brought ashore for disposal in accordance with regulations;

b) Topside structures and associated equipment must be completely removed, collected, and classified for reuse, recycling, or disposal in accordance with applicable laws;

c) Waste materials must be collected and treated in accordance with applicable laws.

2. Removal of Base Structures and Associated Equipment

a) Base structures and associated equipment must be removed for reuse or disposal in accordance with applicable laws;

b) All piles, pipes, and structures embedded on the seabed must be cut flush below the natural seabed surface to ensure that no part protrudes above the seabed surface, causing hindrance to maritime activities or other marine exploitation operations. The depth of cutting will depend on the seabed erosion conditions in that area.

Article 11. Removal of Floating Equipment Floating facilities

1. Organizations and individuals must carry out cleaning of oil and chemicals in floating equipment, structures, and accompanying connecting devices (flexible hoses, pipelines, etc.) before removal.

 

2. Floating equipment, structures, and accompanying devices must be removed from their installed positions, completely cleared, relocated for priority reuse, or brought ashore for storage or disposal in accordance with legal provisions.

Article 12. Vehicle Pipeline Removal within Offshore Oil Fields

1. Organizations and individuals must carry out the complete removal of floating pipelines and suspended pipeline sections. The removal of floating pipelines and suspended pipeline sections can only be carried out after organizations and individuals have cleaned oil, gas, and chemicals from those pipelines.

2. Other means and equipment related to oil and gas facilities (electrical cables, optical cables, subsea valves, control devices, etc.) must be completely removed, collected, and sorted according to reuse, recycling, or disposal purposes as prescribed by law.

3. Organizations and individuals are not required to remove buried pipelines or pipelines that do not need to be removed, but they must clean oil, gas, and chemicals from those pipelines.

4. Plans for leaving buried pipelines or pipelines that do not need to be removed, as well as cleaning these pipelines, must be included in the oil and gas facility removal plan. The results of the pipeline cleaning operation must be reported in the completion report of the removal work.

Article 13. Preservation or Abandonment of Oil and Gas Wells

In cases where oil and gas wells are abandoned or preserved after the end of their operational period but cannot yet be removed, the preservation or abandonment of oil and gas wells must comply with current legal regulations.

Article 14. Removal of Onshore Oil and Gas Facilities

The removal of onshore oil and gas facilities shall be carried out in accordance with Articles 10, 12, and 13 of this Decision and must ensure safety for people and the environment as prescribed by law.

Section 2

Removal of Gas Facilities

Article 15. Removal of Facilities and Equipment for Gas Collection, Treatment, Transportation, and Seabed Gas Pipelines

1. The removal of facilities and equipment for gas collection, treatment, and transportation at sea shall be carried out in accordance with Article 10 of this Decision.

2. The removal of seabed gas pipelines shall be carried out in accordance with Article 12 of this Decision.

Article 16. Removal of Onshore Gas Pipelines Crossing Rivers, Lakes, and Fixed Structures

1. Organizations and individuals responsible must remove onshore gas pipelines crossing rivers and lakes. The removal of pipelines can only be carried out after organizations and individuals have cleaned oil, gas, and chemicals from those pipelines.

2. In cases where gas pipelines are located under fixed structures or buried under rivers, lakes, canals without affecting inland waterway traffic, organizations and individuals are not required to remove them but must clean oil and gas and chemicals from those pipelines. Plans for leaving pipelines that do not need to be removed but must be cleaned must be included in the oil and gas facility removal plan. The results of the pipeline cleaning operation must be reported in the completion report of the removal work.

Article 17. Removal and Cleanup of Oil and Gas Processing Plant Facilities

1. Organizations and individuals responsible for cleaning up before removing oil and gas processing plant facilities.

2. Facilities and accompanying equipment must be completely removed, collected, and sorted according to purposes: reuse, recycling, or disposal as prescribed by law.

3. Waste materials must be collected and treated before disposal in accordance with the provisions of the law.

Section 3

General requirements for the removal of oil and gas facilities

Article 18. Handling and Management of Substances This Circular regulates environmental testing for industrial emissions, including the following activities: Collecting samples of industrial emissions, measuring industrial emissions at the site, analyzing samples of industrial emissions by the People's Public Security Forces (hereinafter referred to as industrial emission testing).

Organizations and individuals are responsible for handling and managing waste substances in accordance with the provisions of the law.

Article 19. Safety Assurance Work 1. Traffic control and restriction to ensure safety means organizing warnings and guidance for vessels navigating and mooring in adverse conditions to ensure safety and reduce traffic congestion on inland waterways.

1. Organizations and individuals must ensure that all removal activities are carried out safely and comply with regulations on safety management in oil and gas operations and maritime activities.

2. Prior to commencing the removal of oil and gas facilities, organizations and individuals must submit to the Ministry of Industry and Trade for review and approval safety documents, including: safety management program; risk assessment report and emergency response plan.

3. The content and procedures for approving the safety management program; risk assessment report and emergency response plan shall be carried out in accordance with the provisions of the law.

4. During the implementation of the removal of oil and gas facilities, organizations and individuals must fulfill the following requirements:

a) Establish, maintain, and develop a safety management system to control risks throughout the entire removal process;

b) Ensure that risks from removal activities are identified, analyzed, assessed, and measures implemented to control, reduce risks, and demonstrate that risks are within acceptable levels as prescribed by law;

c) Ensure the establishment and maintenance of an emergency response system so that necessary response measures can be carried out quickly, effectively, and minimize damage when incidents or accidents occur that pose harm to people, the environment, or property;

d) Ensure occupational safety and health for workers participating in the removal of oil and gas facilities;

đ) Implement necessary measures to ensure safety for people, assets, protect the environment, and report to the Ministry of Industry and Trade, the Ministry of Natural Resources and Environment in cases where incidents affect the safety of people, assets, or the environment.

Article 20. Monitoring Work environmental protection

1. Environmental monitoring for the removal of oil and gas facilities

a) Before implementing the removal, organizations and individuals must conduct and prepare an environmental monitoring report, reporting to the Ministry of Natural Resources and Environment. The results of the monitoring must be included in the facility removal plan. If organizations and individuals have conducted environmental monitoring within two years from the end date of monitoring to the date of removal, they may use the data in that monitoring report to report to the Ministry of Natural Resources and Environment;

b) Within nine months from the completion of the removal activity, organizations and individuals must conduct and prepare an environmental monitoring report, reporting to the Ministry of Natural Resources and Environment. The environmental monitoring report must assess the impacts of the removal process, residual impacts of the entire removal process, and the natural recovery capacity of the environment. Post-removal monitoring results must be included in the completed facility removal report;

c) The network of monitoring stations, environmental analysis parameters, and assessments are carried out similarly to the organization's monitoring during oil and gas extraction and operation of facilities;

2. Scope, Network, Sample Types, and Monitoring Parameters

a) For the removal of oil and gas facilities, it is carried out as the final monitoring phase during the extraction and operation of facilities;

b) For pipeline removal activities: carried out as pre-installation environmental monitoring for pipelines.

3. Removal of Debris and Site Cleanup

a) Activities of debris removal and survey must be included in the facility removal plan;

b) After completing each removal phase, organizations and individuals must conduct a debris survey to identify and recover debris generated from the removal process or remaining from previous extraction activities at the bottom of the sea;

c) The scope of the debris survey is measured from the outer edge of the oil and gas facility

- For wells: within a minimum radius of 90 meters;

- For production platforms: within a minimum radius of 100 meters;

- For subsea wells and subsea distribution clusters: within a minimum radius of 90 meters.

- For pipelines and other oil and gas facilities: within a minimum radius of 10 meters.

4. Organizations and individuals are responsible for remedying environmental incidents (if they occur).

5. Organizations and individuals are responsible for notifying the Ministry of Natural Resources and Environment, the Ministry of Industry and Trade, and the People's Committee of the province where the oil and gas facility is located about the prevention and response plans for environmental incidents during the removal of oil and gas facilities.

Article 21. Special Cases

1. During the process of oil and gas activities, if an oil and gas facility is severely damaged or poses a risk to safety, affecting the safety of oil and gas operations, the organization or individual must immediately carry out partial or full dismantling of the oil and gas facility, while reporting to the Ministry of Industry and Trade.

2. When carrying out the dismantling of oil and gas facilities, if unforeseen reasons arise that hinder the dismantling work, preventing it from being completed according to the approved dismantling plan, the organization or individual must prepare the necessary adjustments and supplements compared to the approved dismantling plan, and submit them to the Ministry of Industry and Trade.

The organization or individual must submit reports on the necessary adjustments directly to the Ministry of Industry and Trade or through postal service. Within fifteen (15) working days from the date of receipt of the report, the Ministry of Industry and Trade will review and approve. In case of disapproval, the Ministry of Industry and Trade must notify the organization or individual in writing and specify the reasons.

Article 22. Suspension of DismantlingCleanup duration 1. Organizations and individuals must update and adjust the decommissioning plan for oil and gas facilities when any of the following situations occur:

1. An organization or individual conducting oil and gas exploration and exploitation activities or owning related gas facilities may propose the suspension of dismantling of oil and gas facilities in accordance with the provisions of Clauses 2, 3, and 4 of this Article.

2. Conditions for considering the suspension of dismantling of oil and gas facilities

a) The oil and gas facility must be ensured to maintain its integrity and not pose risks to future decommissioning activities;

b) The suspension of decommissioning of oil and gas facilities must comply with general safety requirements, maritime safety, and environmental protection laws of Vietnam and international oil and gas industry practices;

c) The suspension of decommissioning of oil and gas facilities must have significance for scientific research, national defense, security, or other necessary cases;

d) The financial guarantee fund for the dismantling obligation corresponding to the oil and gas facility has been fully allocated and paid according to the approved dismantling plan of the oil and gas facility;

đ) For wells, suspension is only allowed when the organization or individual assumes full responsibility for any issues arising from the suspension;

e) The oil and gas facility still has operational capacity and meets safety requirements.

3. The organization or individual must submit the proposal for suspending the dismantling of oil and gas facilities directly to the Ministry of Industry and Trade or through postal service. The content of the proposal for suspending the dismantling of oil and gas facilities includes:

- Current status of the oil and gas facility;

- Plan for implementing the dismantling of the oil and gas facility;

- Reasons for proposing the suspension of dismantling of the oil and gas facility;

- Management of potential risks;

- Expected duration of suspension;

- Measures to ensure the integrity of the facilities.

- Conclusions and recommendations.

4. The procedures and formalities for approving the suspension of dismantling of oil and gas facilities shall be carried out in accordance with the provisions of Article 7 of this Decision.

Article 23. Leaving Oil and Gas FacilitiesRemaining oil and gas facilities

1. If an organization or individual has fully established the financial guarantee obligations according to the approved dismantling plan, the entire or partial leaving of the oil and gas facility will be considered in one of the following cases:

a) It is technically unfeasible to carry out the decommissioning of the oil and gas facility;

b) Decommissioning solutions have been proposed but it is still impossible to safely recover the facility;

c) Decommissioning the oil and gas facility could endanger human lives or severely impact the marine environment without affecting maritime safety;

d) Submarine pipelines that have not been buried but have been naturally buried over time and exist in a buried state or part of the submarine pipeline remains above ground, with the organization or individual implementing burial measures;

đ) Wellhead equipment; underground structures; concrete piles, pipes, anchors, and structures embedded in the seabed in areas with a minimum water depth of 500 meters, except in special cases related to national defense;

e) Removal of casing from wells, piles, pipes, and structures anchored to the seabed from the seafloor upwards;

g) Facilities that can prove benefits from being left behind.

2. The organization or individual must submit the proposal for leaving the oil and gas facility directly to the Ministry of Industry and Trade or through postal service. The content of the proposal for leaving the oil and gas facility includes:

a) Current status of the oil and gas facility;

b) Reasons for proposing to leave the oil and gas facility;

c) Management of potential risks;

d) Measures to ensure the integrity of the facilities;

đ) Conclusions and recommendations.

3. The Ministry of Industry and Trade will review and approve the leaving of the oil and gas facility in one of the cases stipulated in Clause 1 of this Article. The procedures and formalities for approving the leaving of the oil and gas facility shall be carried out in accordance with the provisions of Article 7 of this Decision.

4. Responsibilities of organizations and individuals when leaving oil and gas facilities

a) Submitting maritime signal notification documents to the competent authority for maritime notification;

b) Establishing maritime warning devices for the left-behind oil and gas facilities;

c) Transferring the entire financial guarantee fund for the dismantling of the oil and gas facility, relevant legal documents to the Vietnam Oil and Gas Group for management and future dismantling purposes.

 

Chapter IV

FINANCIAL OBLIGATIONS FOR THE DISPOSAL OF OIL AND GAS FACILITIES

FOR THE CLEANUP OF OIL AND GAS FACILITIES

Section 1

Financial obligations for the disposal of facilities

for exploration, development, and production of oil and gas

          Article 24. Obligation to dismantle oil and gas facilities during the exploration phase

          1. During the exploration phase of oil and gas, organizations or individuals have the obligation to dismantle oil and gas facilities serving exploration activities (wells, equipment, other means) that are no longer needed or used for oil and gas activities according to the annual work program and budget (no need to pay into the fund).

2. Costs arising from dismantling activities are oil and gas operation costs for recovery purposes as stipulated in the oil and gas contract.

Article 25. Methods for Financial Guarantees to Decommission Oil and Gas Facilities when the Oil and Gas Project Includes Exploitation Activities

The financial guarantee for decommissioning oil and gas facilities shall be implemented through the establishment of a financial guarantee fund, except in cases where other methods for financial guarantees for decommissioning oil and gas facilities are applied as stipulated in Clause 2, Article 2 of this Decision.

Article 26. Time for Establishing the Financial Guarantee Fund

1. Within one year from the date of the first oil and gas production, organizations and individuals must establish a financial guarantee fund for decommissioning oil and gas facilities based on the approved decommissioning plan.

2. For organizations and individuals currently conducting oil and gas exploitation but have not yet established a financial guarantee fund for decommissioning oil and gas facilities, they must establish such a fund immediately upon the effectiveness of this Decision, except in cases where other methods for financial guarantees for decommissioning oil and gas facilities are applied as stipulated in Clause 2, Article 2 of this Decision.

3. Annually, the establishment of the financial guarantee fund shall be carried out according to the approved decommissioning plan by the Ministry of Industry and Trade. In case the decommissioning plan has not been approved by the Ministry of Industry and Trade within one year from the date of the first oil and gas production, the establishment of the financial guarantee fund will temporarily be conducted based on data in the development plan of the field already approved by the Prime Minister or the early production plan already approved by the Ministry of Industry and Trade. The annual contribution amount will be adjusted after the Ministry of Industry and Trade approves the decommissioning plan.

Article 27. Principles for Establishing, Adjusting, Using, and Settling the Financial Guarantee Fund

The establishment, adjustment, and settlement of the financial guarantee fund shall be carried out in accordance with Articles 77, 78, and 79 of Decree No. 95/2015/NĐ-CP dated October 16, 2015, of the Government detailing certain provisions of the Petroleum Law.

Article 28. Annual Contribution Rate for the Financial Guarantee Fund

The annual contribution rate for the financial guarantee fund for decommissioning oil and gas facilities is determined by the following formula:

A_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} x (B_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} – C _(n-1) – I _(n-1))

E_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} = ----------------------------------------

Domestic air passenger transport service on regular basic economy class_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}

Where:

- E_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Annual contribution rate, unit of measurement is USD.

: Actual electricity delivered to the grid at the delivery point in the payment month._{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Production volume in year n, determined by actual production volume in the corresponding year, unit of measurement is barrels of oil equivalent.

Ministry of Construction sets specific price_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Total updated decommissioning costs at year n, B_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} = (b₁ – b₂), wherein:

+ b₁: Total estimated decommissioning costs in the decommissioning plan (most recently approved), unit of measurement is USD.

+ b₂: Estimated cost determined in the most recently approved decommissioning plan corresponding to equipment, assets, or facilities decommissioned up to year (n-1), unit of measurement is USD.

Ministry of Science and Technology: The Minister and Deputy Ministers, agencies and units under the Ministry;_(n-1): Balance of the financial guarantee fund as of December 31 of year (n-1), determined by the total balance of all accounts that the Vietnam Oil and Gas Group deposits for the corresponding field, confirmed in writing by relevant commercial banks, unit of measurement is USD.

- I_(n-1): Bank deposit interest received by organizations and individuals after the Vietnam Oil and Gas Group fulfills its obligations to the state budget on their behalf for year (n-1) (if applicable).

- D_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Remaining recoverable reserves, D_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} = d₁-d₂, including:

+ d₁: Recoverable reserves determined in the development plan or early production plan approved by competent authorities up to the end of year n, unit of measurement is barrels of oil equivalent.

+ d₂: Cumulative total production from related fields up to year (n-1), unit of measurement is barrels of oil equivalent.

Article 29. Obligation to Contribute to the Financial Guarantee Fund in Case of Termination of Field Exploitation or Oil and Gas Contract

1. Prior to terminating field exploitation or prematurely ending the oil and gas contract, organizations and individuals must fulfill the obligation to establish the financial guarantee fund as prescribed in this Decision.

2. In cases where oil and gas facilities do not need immediate decommissioning at the time of termination of field exploitation or premature termination of the oil and gas contract, organizations and individuals must transfer the full financial guarantee fund to the Vietnam Oil and Gas Group.

Article 30. Currency for Establishing the Financial Obligation Guarantee Fund

The currency for establishing the financial obligation guarantee fund shall be the US Dollar.

Article 31. Management of the Financial Obligation Guarantee Fund

1. The management of the financial obligation guarantee fund for the cleanup of oil and gas facilities shall be carried out by the Vietnam Oil and Gas Group.

2. During the period when the financial obligation guarantee fund is not utilized, the Vietnam Oil and Gas Group shall deposit the amount of the financial obligation guarantee fund for each oil field or oil contract into accounts at commercial banks with stable operations as provided by the State Bank of Vietnam. Any interest generated annually after fulfilling financial obligations to the State shall be recorded as an increase to the financial obligation guarantee fund.

3. Tax liability when the financial obligation guarantee fund generates interest

In cases where the financial obligation guarantee fund generates interest, organizations and individuals must declare and pay corporate income tax according to the laws on corporate income tax. Interest generated from the financial obligation guarantee fund must be tracked separately to apply tax obligations as prescribed.

Article 32. Utilization, Inspection, and Settlement of the Financial Obligation Guarantee Fund

1. The fund may be used for the purpose of cleaning up oil and gas facilities.

Organizations and individuals may use the funds within the approved cleanup plan for oil and gas facilities and the annual work program and budget for cleanup to fulfill their cleanup obligations. Within twenty (20) days from receiving the request for capital mobilization from the financial obligation guarantee fund for the cleanup of oil and gas facilities from organizations and individuals and related documents, the Vietnam Oil and Gas Group has the responsibility to transfer the corresponding fund amount based on the value that organizations and individuals have established for each project component according to the approved cleanup plan. Organizations and individuals have the obligation to contribute proportionally to the difference between the actual costs incurred to perform the cleanup work and the maximum amount that the Vietnam Oil and Gas Group can transfer from the fund according to the mobilization call for the Operator to carry out the cleanup work.

Estimated cleanup costs for completed project components will be deducted from the total cleanup costs determined in the most recently approved cleanup plan to serve as the basis for adjusting the subsequent fund establishment value.

2. Inspection of the utilization of the financial obligation guarantee fund

Annually, the Vietnam Oil and Gas Group shall conduct audits and verify the actual monetary expenses incurred by organizations and individuals using the financial obligation guarantee fund for the cleanup of oil and gas facilities.

3. Settlement of the financial obligation guarantee fund

a) Within thirty (30) days from the date the Ministry of Industry and Trade approves the report on the completion of the cleanup of oil and gas facilities, the Vietnam Oil and Gas Group shall cooperate with organizations and individuals to settle the actual cleanup expenses.

b) In cases where, after settlement, the balance of the financial obligation guarantee fund exceeds zero, the remaining fund amount shall be handled as follows:

- If organizations and individuals have recovered all the money contributed to the financial obligation guarantee fund, the fund surplus will be distributed among organizations and individuals and the Vietnam Oil and Gas Group according to the highest production volume profit-sharing ratio applied in the oil contract.

- If organizations and individuals have not fully recovered the money contributed to the financial obligation guarantee fund, the remaining fund amount will be prioritized to repay organizations and individuals to offset the unrecovered portion of the fund contribution. Any surplus of the financial obligation guarantee fund after this offset (if any) will be distributed among organizations and individuals and the Vietnam Oil and Gas Group according to the highest production volume profit-sharing ratio applied in the oil contract.

4. Annually, the Vietnam Oil and Gas Group must report to the Ministry of Industry and Trade and the Ministry of Finance on the management, utilization, inspection, and settlement of the financial obligation guarantee fund for the cleanup of oil and gas facilities.

Article 33. Handling the Excess Fund for Financial Obligations Guaranteed by the Vietnam Oil and Gas Corporation in Receiving and Implementing the Decommissioning of Oil and Gas Facilities

1. In cases where the financial obligation guarantee fund exceeds the actual decommissioning costs, the Vietnam Oil and Gas Corporation shall be responsible for fulfilling its financial obligations according to the provisions of the law.

2. In cases where the financial obligation guarantee fund is less than the decommissioning costs, the Vietnam Oil and Gas Corporation is permitted to allocate the shortfall over a maximum period of 5 (five) years into its production and business operating expenses to offset the deficit.

Section 2

Guarantee of Financial Obligations

for the Decommissioning of Gas Facilities

Article 34. Method of Guaranteeing Financial Obligations for the Decommissioning of Gas Facilities

1. The guarantee of financial obligations for the decommissioning of gas facilities shall be implemented through the establishment of a financial obligation guarantee fund.

2. Annual decommissioning costs for gas facilities deducted into the fund shall be included in the production and business expenses of organizations and individuals.

Article 35. Time of Establishing the Financial Obligation Guarantee Fund

Within one (1) year from the date of the first gas flow transportation or processing, organizations and individuals must begin deducting funds for the financial obligation guarantee or immediately after the decommissioning plan for gas facilities is approved.

Article 36. Level of Deduction for Establishing the Financial Obligation Guarantee Fund

1. The level of deduction for establishing the annual financial obligation guarantee fund for the decommissioning of gas facilities is determined as follows:

A_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} x (B – C) _(n-1))

E_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} =  ----------------------------------------

Domestic air passenger transport service on regular basic economy class_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}

Where:

- Amount of the fund deduction in year n, unit of measurement is Vietnamese Dong;

: Actual electricity delivered to the grid at the delivery point in the payment month._{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Volume of gas transported in year n according to the approved decommissioning facility plan, unit of measurement is million cubic meters of gas;³ - B: Total approved decommissioning costs;

: Balance of the decommissioning fund at December 31 of year (n-1) (including principal and interest up to the end of year (n-1)), unit of measurement is Vietnamese Dong;

Ministry of Science and Technology: The Minister and Deputy Ministers, agencies and units under the Ministry;_(n-1): Total remaining volume of gas transported in year n according to the approved investment report, unit of measurement is million cubic meters of gas.

- D_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: The remaining total gas volume transported at year n according to the approved investment report, measured in million cubic meters of gas.³ gas.

Article 37. Management of the Financial Obligation Guarantee Fund

1. Organizations and individuals owning gas facilities are responsible for establishing, managing, and using the financial obligation guarantee fund according to the approved decommissioning plan. In cases where gas facilities are left behind as stipulated in Article 23 of this Decision, organizations and individuals owning the gas facilities will record the balance of the financial obligation guarantee fund as income.

2. During the period when the fund is not used, organizations and individuals deposit the amount of the financial obligation guarantee fund for each gas project into accounts at commercial banks with stable operations listed by the State Bank of Vietnam. Interest generated annually after fulfilling financial obligations to the State shall be added to the financial obligation guarantee fund.

3. If the financial obligation guarantee fund generates interest, organizations and individuals have the obligation to declare and pay corporate income tax according to the Corporate Income Tax Law. Interest generated from the financial obligation guarantee fund must be tracked separately to apply tax obligations as prescribed.

4. Annually, organizations and individuals report to the Ministry of Industry and Trade on the situation of establishing, managing, and using the financial obligation guarantee fund.

5. In cases where gas facilities involve multiple investors participating in investment, the investors jointly own the account for depositing the financial obligation guarantee fund.

Article 38. Use and settlement of the financial obligation guarantee fund

1. The fund shall be used for the purpose of dismantling gas facilities. Organizations and individuals may use the funds to fulfill their obligations for dismantling gas facilities according to the approved gas facility dismantling plan.

2. The settlement of the fund shall be carried out in accordance with the provisions of the law.

3. Regarding the surplus of the financial obligation guarantee fund

a) In cases where the financial obligation guarantee fund exceeds the necessary requirements for dismantling gas facilities, the excess amount shall be determined as income of the organization or individual owning the gas facility after fulfilling financial obligations to the State in accordance with the law.

b) In cases where the financial obligation guarantee fund is insufficient to meet the necessary requirements for dismantling gas facilities, within six months before the end of the facility's service life or cessation of operations, organizations and individuals must contribute according to the approved gas facility dismantling plan corresponding to their shareholding ratio.

Article 39. Currency for establishing the financial obligation guarantee fund

The currency for establishing the financial obligation guarantee fund is Vietnamese Dong.

 

Chapter V

IMPLEMENTING PROVISIONS

Article 40. Responsibilities of Ministries

1. Ministry of Industry and Trade

To take the lead and coordinate with the Ministries of Transport, Natural Resources and Environment, Construction, and Finance to conduct inspections and supervision of gas facility dismantling activities.

2. Ministry of Finance

To coordinate with the Ministry of Industry and Trade to inspect and supervise the management, use, and settlement of the financial obligation guarantee fund.

3. The State Bank of Vietnam

a) Annually, provide a list of commercial banks with stable operations to the Vietnam Oil and Gas Group and organizations or individuals managing the financial obligation guarantee fund for the purpose of depositing the fund according to this Decision.

b) In case it detects that commercial banks included in the list of stable operating banks announced by the State Bank of Vietnam have the potential to be placed under special supervision or face payment difficulties, the State Bank of Vietnam shall promptly notify the Vietnam Oil and Gas Group and organizations or individuals managing the gas facility dismantling fund to proactively respond.

4. The Ministries of Natural Resources and Environment, Construction, and Transport within their respective functions and authorities shall cooperate with the Ministry of Industry and Trade to perform state management functions over gas facility dismantling activities.

Article 41. Transitional Provisions

1. For the gas facility dismantling plans approved before the effective date of this Decision, organizations and individuals shall continue to implement the contents of those dismantling plans.

2. For organizations and individuals currently engaged in oil and gas exploitation but have not submitted a gas facility dismantling plan, they must establish such a plan and submit it to the Ministry of Industry and Trade for approval in accordance with this Decision and other relevant laws.

3. For gas facilities currently in operation or having investment project approval decisions made by competent authorities before the effective date of this Decision, organizations and individuals shall be responsible for developing specific handling schemes appropriate to each project's characteristics to be reviewed by the Ministry of Industry and Trade and decided upon by the Prime Minister.

Article 42. Effectiveness

This Decision shall take effect from February 18, 2018, and replace Decision No. 40/2007/QĐ-TTg dated March 21, 2007, of the Government on the clearance of fixed facilities, equipment, and means serving oil and gas operations.

Article 43. Implementation

The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees under the direct jurisdiction of the central government shall be responsible for implementing this Decision./.