Decision No. 143/2008/QD-TTg promulgating the Regulation on setting up, management and use of the oil and gas prospecting and exploration fund

Article 2.- The Vietnam National Oil andGas Group shall set up, manage and usc the Fund in accordance with this Regulation. @ VIETNAM LAW & LEGAL FORUM Issue nos 01-o2lNovember 2008 OFFICIAL GAZETTE 43 (C6ngBaooos~11. 2OC6) implementation of social andreligious policies, and deputies; denunciations againstNationalAssembly petitionsaodcomplmn~inofuerdonrullnsunderi~ deputies, officials managed hy the National management; Assembly Standing Committee, and National Assembly officials managed by theParty Central 2. Denunciationsagainstagencies', organiza- doll.'>' and individuals' illegal acts ill dornaius Committee. specifiedin Clause 1 of thisArtieIe.

Article 14,- The People's Aspirations Board

Article 11.- The Committee for Science. shall assist the National Assembly Standing Technology and Environment shall process the Committee in processing citizens' complaints, following complaints, denunciations andpetitions: denunciations and petitions related to several Committees and theCouncilforEthnicMinorities 1,Petitions and complaintsconcerrungscience, and complaints anddenunciationfalling beyondthe technology, resources and environment;policies managementof the CouncilforEthnicMinorities, on developmentof science,technology, resources NationalAssembly's Committeesor theDeputies' am} t::11viruruueru; important national works under Attairs Board, theNationalAssembly'sresolutions, andpetitions and complaints in other domains under its Article 15.~ management; 1.Biannually andannually, theStandingBoard 2. Denunciationsagainstagencies' .organiza- of the Councilfor Ethnic Minorities, the standing tions' and individuals' illegal acts in domains boards of the National Assembly's Committees, specifiedin Clause 1 of thisArticle. thePeople's AspirationsBoard and the Deputies' AffairsBoardshall report totheNationalAssembly

Article 12.-The Committee forForeignAffairs Standing Committeeon the receiptandprocessing shafl proccl>s tlrc follow irig cUl1Iplai uts , of citizens' complaints, denunciations and petitions denunciations andpetitions: and the results of supervisoryacti vi tiesregarding 1. Petitions and complaints of foreign the settlementof these complaints,denunciations organizations andindividuals andother petitions and and petitions. complaintsabout or related to foreign affairs; 2. The People's Aspirations Board shall assist 2. Denunciations against agenciee' ,organiza- the National Assembly Standing Committee in tions' and individuals' illegal acts in domains reviewing the receipt and processing of citizens' specified in Clause 1of thisArticle. complaints, denunciations and petitions and the resultsofsupervisory activities of theCouncilfor Article J3.- The Deputies Affairs Board shall Ethnic Minorities, the National Assembly's assisttheNationalAssembly StandingConunittee Committeesand theNationalAssembly Standing in processing citizens' complaints anddenunciations Committee's Boards regarding the settlement of concerning the election of National Assembly these complaints and denunciations and make © VIETNAM LAW &LEGAL FORUM Issue nos 01·02/November 2008 OFFICIAL GAZETTE 45 (COnqBaonos5~11, 2(08)

Article 3.- This Decision takes effect 15 days Article I» The Oil and Gas Prospecting and afteritspublication in "CONG BAG." All previous ExplorationFund (below referred to 3!: the Flinn) regulationson the settingup,managementand use is set up to provide financial supports and offset of the Oil and Gas Prospecting and Exploration part of risks in oil and gas prospecting and Fund of the Vietnam National Oil and Gas exploration (at home and overseas) and reserves Corporation which are contrary to this Decision assessment. are annulled. The Vietnam National Oil and Gas Group (below referred to as the Group) shall set up

Article 4.- The Minister of Finance and the manage and use theFund in accordance with this Minister of Industry and Trade shall, within [he Regulation. ambitof their statemanagementfunctions, inspect andsupervisetheimplementation of thisRegulation. Article 2.- In thisRegulation, the terms below Ministers, headsofministerial-level agencies, heads are construed as follows: of government-attached agencies, presidents of provincial/municipal People'sCommittees, and the 1. Oil and gas prospecting and exploration chairmanof the Board of Directorsand the general activities means acti vities aiming to prospect and directorofthe VietnamNational OilandGas Group assess oil and gas potential and determine the shallimplementthis Decision, existence of oil and gas reserves and the capacity of oil and gas commercial exploitation within Prime Minister structure objects (seams, formations), structure NGUYEN TAN DUNG clusters, blocks or sedimentary basins,covering: geological, geo-physical and geo-chemical preparations and surveys and other surveys; anal yses and researches,well drilling and closing; seam test; well improvement; well repair; well destructionand reserves assessment planning. REGULATION ON SETTING UP~ MANAGEMENT AND USE OF THE OIL 2. Risks in oil and gas prospecting and AND GAS PROSPECTING AND exploration (risks) meansachievedprospectingand EXPLORATION FUND exploration results whichfail to attaintheminimum objectives already approved by competent (Promulgated together with the Prime Minister's authorities. DecisionNo. 14312008lQD-ITg ofOctober 29, 2008) Article 3.- Fund use purposes The Fund is used for the Group's Chapter I implementation of, or capital contribution to, GENERAL PROVISIONS domesticandOVeTSf".:l" oil and em; prospecting and e VIETNAM LAW & LEGAL FORUM 46 OFFICIAL GAZETTE Issue nos 01-02INovember 2008 (COngBBooos~11, 2008) exploration projects which fully satisfy the Article 5.- Projects not to be fmanced by the conditions specified in Clause I, Article 4 of this Fund Regulation; and for offsetting part of risks in oil and gas basic survey, prospecting, explorationand 1. Projectsfundedwithcapitalof othersources. reserves assessment activities. 2. Projects aiming to increase oil and gas reserves underexploitation projects or development Artkle 4.- Conditions on projects to befinanced projects,of which the developmentfor oil and gas. by the Fund exploitation has been decided by a competent authority. 1. To be financed by the Fund, an oil and gas basicsurvey or prospecting and exploration project Chapter II mustfully.satisfy the following conditions: SETIING UP, MANAGEMENT AND USE af Having been approved by a competent OF THE FUND authority under regulations and being other than those specified inArticle 5 of this Regulation; Article 6.- Sources and levels of deductions hi Having detailed cost estimates for each job for setting up the Fund volumetore performed whichhavebeenapproved Annual deductions shall be made for the Fund by the Group's Board of Directors. from thefollowingsources: 2.The Group's Boardof Directors shall,based 1. Not more than 10% of the host country's on the provisions of Clause 1 of this Article and annual oil and gas profit allocated to the parent the Fund's capital-balancing capacity, decide on company - the Group. the use of the Fund for investment in specific 2. 10% of the annual after-tax profit of the projectsmthe following orderat pnonty: parent company - the Group. aJProje.cts inoverlapping areasand areasunder disputes with regionalcountrieswhich are related 3. Other sources (if any). to natioeal sovereignty or security; projects Deductions mentioned in Clauses 1 and 2 of implementedbytheGroupinLaos andCambodia, thisArticle will not be made for theFund once its and odterprojects as decidedby the PrimeMinister, balance has reached 10% of the charter capital of the parent company - the Group. hi Encouraged oil and gas investmentprojects according to thelist of oil and gas blocks decided

Article 7.- The Group's general director shall by the Prime Minister; workoutand submit annual planson the useof the cl Other projects which fully satisfy the Fund to theGroup'sBoardofDirectors forapproval conditions specifiedin Clause 1,Article 4 of this as a basisforimplementation, and include themas a Regulation. separare item in me Group's annual financial plans, © VIETNAM LAW & LEGAL FORUM Issue nos 01-o2!November 2008 OFFICIAL GAZETTE 47 (GOng BaofJO.~599-f{J~1f. 2008)

Article 8.- Advance, take-over test, payment capital and ensure the Fund's sufficientcapital to meet arising funding needs. The use of the Fund 1. The Group shall advance funds from the for the abovepurposes must not affect oil andgas Fund for the implementationof oil and gas basic prospecting and exploration acti vities. survey, prospecting and exploration projects on the The Group's general director shall take basisof approvedplans,implementation progress responsibility before the Board of Directors and and detailed cost estimates. The specificadvance law for the efficient use of Fund's idle capital-in levelfor eachjob itemof a projectshall bedecided accordance with the above principles. bytheGroup'sgeneral directorbutmustnotexceed 90% of the project's total estimate. Artide 10.-Settlementof allocatedthnds upon Advanced funds must be used for proper projecttermination purposes; if they are used for improper purposes or not used up, they must bereturned to the Fund 1. Upon the termination of an oil and gas within 15 days after a decision to this effect is prospectingand explorationproject, if oil andgas issuedby theGroup's BoardofDirectors Chairman discoveries areofcormnercial valueand whensuch or a state agency competent to conduct project is decided to be transformed into a examination,inspection or stateaudit. development projectbya competentauthority, the Fund's allocationsfor the project shall 'ge debited 2. Upon the termination or suspension of a and, at the same time, the Group owner's projectundera competentauthority's decision, the investment capitalshallbe credited. Group shall set up a test council to determine the volume of completedjobs,implementation expenses 2. In case an oil and gas prospecting and for and results of the project.The Test Council's explorationproject faces risks and is incapableto composition shallbe decided bv the Group's Board retrieveexpenses: ofDirectors Chairman who shall lake responsibility a/ For projects on basic surveys and projects before the Group's Board of Directors and law specifiedat Points a and b, Clause 2, Article4 of for the truthfulnessand accuracy of test results. this Regulation, the Gruup may debiu:tle Fund's 3. The payment of all expenses for project allocations in proportion to the volumes of the implementationisbased on projecttest results. projects' oil and gas prospecting and exploration jobs already paid by the Tund;

Article 9.- Managementand use of the Fund's b/Forother projects, theparent company ~ the idle capital Group shall use itsfinancial provision fund to cover The Group may use the Fund's idle capital for expenses;if this fund is deficient, thedeficit shall its production and business needs other than the beaccountedas the parent company's production Fund's use purposes specified in Article 1 of this and business expenses within 5 years from the Regulation on the principle mat It must refund this dateof project termination. © VIETNAM LAW & LEGAL FORUM 48 OFFICIAL GAZETTE Issue nos 01.Q2INovember 2008 (GOng Haoms 599-fiJ2J1\tNerrm 11, 2WJ)

Article 11.~ Settlement of oil and gas ofFinance for study,synthesis and submission 10 prospectingand exploration projects the Prime Minister for amendment and supplementation. Within 6 monthsafter anoil andgas prospecting andexplorationproject is completedor is forcedto Prime Minister terminate ahead of schedule, the Group's Board NGUYEN TAN DUNG of Directors shall evaluate and approve the settlementof the Fund's allocationsfor the project. Its approval decision must clearly state the actual value used from the Fund after subtracting the damages of the insurer or concerned collectives andindividualsand the valueof suppliesand assets paid by theproject (if any). Alticle12.- Year-end reports Wi1hi'R"90 days after the year-end, the Group shall make a report on the setting up, use and settlement; of the Fund and send it to the Ministry of Financeand the Ministry oflndustry and Trade formonitoringand supervision. The Ministry of Finance shall inspect and supervise the setting up, management and use of the Fund; gnidr: in detail accounting: regulations and the form of report on the setting up, use and settlement-ofthe Fund. Chapter III IMPLEMENTATION PROVISIONS

Article 13.- The Group's Board of Directors shall,based on thisRegulation, directthe Group in the setting up, management and use of the Fund, and take responsibility for the setting up, management and efficient and proper use of the Punet Problems arising in the course of implementationshould be reported to the Ministry e VIETNAM LAW & LEGAL FORUM