Quyết định 40/2007/QD-TTg

DECISION

ON CLEAN-UP OF FIXED WORKS, EQUIPMENT AND FACILITIES FOR OIL AND GAS ACTIVITY

THE PRIME MINISTER

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

Pursuant to the Petroleum Law of July 06, 1993 and the Law amending and supplementing a number of Articles of the Petroleum Law on June 09, 2000;

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

At the proposal of the Minister of Industry,

DECISION:

Chapter 1:

GENERAL PROVISIONS

Article 1. Scope of governing and subjects of application

This Decision provides for the clean-up of fixed works, equipment and facilities for oil and gas activity of the organizations and individuals conducting petroleum activity in Vietnam (hereinafter referred to as the organizations and individuals).

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

1. Where the international treaties which the Socialist Republic of Vietnam has signed or acceded to contain provisions different from the provisions of this Decision, it shall comply with the provisions of the international treaties.

2. The provisions of this Decision shall apply to all oil and gas contracts signed. For the guarantee of financial obligations for the clean-up of fixed works, equipment and facilities as provided for in Chapter IV of this Decision, if in oil and gas contracts signed there are agreements different from provisions of this Decision, it shall comply with the provisions of the oil and gas contracts.

Article 3. General principles

1. Organizations, individuals are responsible for clean-up of fixed works, equipment and facilities as planned clean-up of fixed works, equipment and facilities approved by the Ministry of Industry. Where the Ministry of Industry requires not clean-up all or part of fixed works, equipment and facilities, the organizations and individuals comply with the requirements.

2. The clean-up of fixed works, equipment and facilities must meet the requirements for soil protection, restoring the state of the ecological environment, traffic safety and other benefit resources of the sea.

3. Fixed works, equipment and facilities must be designed to ensure the clean-up after the activity is ended.

Article 4. Interpretation of terms

In this Decision, the terms below are construed as follows:

1. "Fixed work" means the work to be built, installed fixedly, to be used to serve the oil and gas activity;

2. "Underground pipe" means the pipe to be buried in the trench according to the design approved by the competent authority;

3. "Hanging tube section" means the underground pipe section, but by time the coating is corroded so that the pipe section is exposed or moved from their original location;

4. "Plan to clean up the fixed works, equipment and facilities" means the document including the contents related to engineering solutions, technology, total cost and schedule associated with the clean-up of fixed works, equipment and facilities for oil and gas activity;

5. "The bases of fixed marine works" mean the steel structures, which are fixed by steel or concrete poles, close deeply seabed to support the superstructure;

6. "Superstructure" means the top of the fixed works, including structures and equipment installed on the base;

7. "Equipment" means a combination of mechanical and electronic components to be installed and used to serve the oil and gas activity.

Chapter 2:

REQUIREMENTS FOR CLEAN-UP FIXED WORKS, EQUIPMENT AND FACILITIES

Article 5. Clean-up of oil and gas drilling wells

The clean-up of oil and gas drilling wells must comply with the procedures for preservation and destruction of oil and gas drilling wells defined by the Ministry of Industry.

Article 6. The clean-up of the superstructure and the enclosed equipment

Organizations and individuals must clean up, send to the banks the superstructure and the enclosed equipment of the fixed works to reuse or dispose in the proper places. The wastes, waste materials before being wasted must be handled in accordance with the provisions of the law on environmental protection, marine, fisheries.

Article 7. Clean-up of the bases and the enclosed equipment

1. The bases of fixed marine works and enclosed equipment must be removed for reuse or disposing in the proper places.

2. Piles, pipes, structures closed to the bottom of the seabed must be cut below the natural seabed so that there is no knob portion causing obstruction to the traffic activities, fishing and other activities.

Article 8. The floating facilities

Floating facilities, structures and enclosed equipment must be taken out of used locations, to move elsewhere for re-use or storage or disposal in accordance with law provisions.

Article 9. Clean-up of the pipes on the sea

1. Organizations and individuals must conduct to clean-up the entire floating pipes, hanging pipe sections. The clean-up of floating pipes, hanging pipe sections is conducted only when organizations and individuals removed the oil, gas and chemicals in the pipeline.

2. Organizations and individuals must not clean up the underground pipelines, but must clean up the oil, gas and chemicals in the pipelines.

Article 10. The special cases

1. In the process of oil and gas activity, organizations and individuals must conduct immediately the clean-up of part or all of the fixed works, equipment and facilities if the fixed works, equipment and facilities are damaged heavily or severely degraded, affecting the safety and efficiency of oil and gas activity.

2. When conducting the clean-up of fixed works, equipment and facilities, if encountering unforeseen cause to interfere the clean-up so that it cannot complete according to schedule, the organizations and individuals can plan adjustments to submit to the Ministry of Industry for approval.

Article 11. Waste treatment

Before cleaning up the fixed works, equipment and facilities, organizations and individuals must collect and dispose solid and liquid wastes associated with the fixed works, equipment and facilities in accordance with provisions of the law on waste treatment.

Article 12. Requirements for safety and environmental protection

1. The contents on ensuring the safety and environmental protection must be shown in the clean-up plan of fixed works, equipment and facilities.

2. Before performing the clean-up of fixed works, equipment and facilities, organizations and individuals must submit to the Ministry of Industry the materials on safety as provided for in Articles 4, 5 and Article 39 of the Regulation on safety management in the petroleum activities issued together with Decision No.41/1999/QD-TTg dated March 08, 1999 of the Prime Minister.

3. Environmental monitoring program:

a) Before performing the clean-up, organizations and individuals must perform environmental monitoring, make report on monitoring to submit to the Ministry of Natural Resources and Environment;

b) The network of monitoring stations, parameters of environmental analysis and assessment are done similar to the monitoring organization in the process of oil and gas exploitation;

c) Within 09 months after the clean-up of fixed works, equipment and facilities is ended, organizations and individuals must organize environmental monitoring, make report on monitoring to submit to the Ministry of Natural Resources and Environment. Monitoring reports must assess the impact occurred through the process of clean-up of fixed works, equipment and facilities.

Article 13. Clean-up of fixed works, equipment and facilities on land

The Ministry of Industry specifies the clean-up of fixed works, equipment and facilities on land.

Article 14. Report on the clean-up of fixed works, equipment and facilities

Within 09 months after the end of the clean-up of fixed works, equipment and facilities, organizations and individuals must make the reports on completion of the clean-up of fixed works, equipment and facilities to submit to the Ministry of Industry for approval.

Within 30 working days from the date of receiving the report, the Ministry of Industry shall consider and approve the report. In case of not meeting the requirements of the clean-up according to the plan of clean-up of fixed works, equipment and facilities approved, the Ministry of Industry may request organizations and individuals to comply with the requirements and supplement reports for reconsideration.

Chapter 3:

FORMATION AND APPROVAL OF THE PLAN TO CLEAN UP THE FIXED WORKS, EQUIPMENT AND FACILITIES

Article 15. Submission of the plan of clean-up of fixed works, equipment and facilities

1. Within 01 year, since commercial exploitation has been started, organizations and individuals must plan to clean up fixed works, equipment and facilities to submit to the Ministry of Industry for consideration and approval.

2. For organizations and individuals conducting oil and gas exploration, but not yet have submitted a plan on clean-up of fixed works, equipment and facilities, it must plan to submit to the Ministry of Industry for approval under the provisions of this Decision and other provisions of the relevant law.

Article 16. Plans on clean-up of fixed works, equipment and facilities

1. The basic contents of the plan to clean up the fixed works, equipment and facilities, include:

a) Introduction on the plan to clean up the fixed works, equipment and facilities;

b) Summary of contents of the plan to clean up the fixed works, equipment and facilities; the measures to perform the clean-up;

c) A list of the categories of works, equipment and facilities need to be cleaned up;

d) Detailed description of the items of fixed works, equipment and facilities need to be cleaned up;

đ) The clean-up plans;

e) Contents on safety and environmental protection;

g) Clean-up of pipes;

h) Clean-up of debris;

i) Total cost of clean-up;

k) Implementation schedule;

l) Project management and inspection regime;

m) The results of the study support.

2. Adjustment plan: In the process of oil and gas activities, if necessary, organizations and individuals can plan adjustments to submit to the Ministry of Industry for approval.

Article 17. Time limit for approval of plans to clean up the fixed works, equipment and facilities

Within 30 working days from the date of receipt of dossiers of the plans to clean up the fixed works, equipment and facilities or adjustment plans of organizations, individuals, the Ministry of Industry issues the decision on approval.

Where the plans to clean up the fixed works, equipment and facilities or adjustment plans are not approved, the Ministry of Industry must inform organizations and individuals and state clearly the reasons for refusal.

Chapter 4:

GUARANTEE OF FINANCIAL OBLIGATIONS FOR THE CLEAN-UP OF FIXED WORKS, EQUIPMENT AND FACILITIES

Article 18. Method to establish funds of guaranteeing financial obligations

The guarantee of financial obligations for the clean-up of fixed works, equipment and facilities shall comply with method to establish fund of guaranteeing financial obligations.

Article 19. Time to establish funds of guaranteeing financial obligations

1. Within 01 year, from the time of extraction of the first oil, gas flow, the organizations, individuals must be establish funds of guaranteeing the financial obligations for the clean-up of fixed works, equipment and facilities.

2. For organizations and individuals conducting oil and gas exploitation but not yet having established fund of guaranteeing financial obligations for the clean-up of fixed works, equipment and facilities, they must establish fund of guaranteeing financial obligations right after this Decision takes effect.

Article 20. Principles for setting aside, adjustment and settlement of funds of guaranteeing the financial obligations

1. Fund of guaranteeing financial obligations for the clean-up of fixed works, equipment and facilities are set aside every year in accordance with the provisions of Article 21 of this Decision. Level for fund appropriation of each organization, individual is commensurate with the percentage of participation of organizations and individuals in the oil and gas contracts and is included in the recovery cost.

2. Within 01 year before the end of oil and gas contract or expiration of the oil and gas exploitation regulated in the mine development plan which has been approved by the Prime Minister, organizations, individuals must re-evaluate the funds of guaranteeing financial obligations on the basis of re-evaluation of the total cost of clean-up and mining production within the framework of oil and gas contract and reserves that can be recovered at this time.

Where fund balance is more than the necessary demand for the clean-up of fixed works, equipment and facilities, the difference is divided for organizations and individuals in percentage proportion of their participation in the oil and gas contract.

If the balance of the Fund is insufficient compared to the needs for the clean-up of fixed works, equipment and facilities, within 06 months before the end of the oil and gas contract or expiration of oil and gas exploitation, the organizations, individuals must contribute in percentage proportion of their participation in the oil and gas contract.

3. At the end of the clean-up of fixed works, equipment and facilities, organizations and individuals must carry out the settlement in accordance with accounting principles agreed in the oil and gas contracts. If the funds are not used up, the balance will be distributed to organizations and individuals in percentage proportion of dividends if the balance is of the costs which have not been revoked or capital contribution rate if the balance is of the costs which have not been recovered.

Article 21. The Rate of appropriation of funds of guaranteeing the financial obligations

The rate of appropriation of funds of guaranteeing the financial obligations for the clean-up of fixed works, equipment and facilities each year is determined by the following formula:

Mining production in year x (Total cleanup costs - Balance set aside at the end of period)

The rate of appropriation = the remaining reserve that can be recovered

Article 22. Management and use of funds of guaranteeing the financial obligations

1. The management of funds of guaranteeing financial obligations for the clean-up of fixed works, equipment and facilities shall be implemented by the PetroVietNam.

2. While pending the use of funds of guaranteeing financial obligations, the PetroVietNam sends amount of funds of guaranteeing financial obligations in a separate interest-generating account in a credit institution in Vietnam. Annual generated interest after performing the financial obligations to the State shall be included into the funds of guaranteeing financial obligations.

3. Funds of guaranteeing financial obligations are used for the purpose of the clean-up of fixed works, equipment and facilities. Organizations and individuals are used the money in the Fund to perform the clean-up obligations of fixed works, equipment and facilities according to the clean-up plans of works, equipment and facilities which have been approved.

4. For cases that do not clean up all or part of fixed works, equipment and facilities as prescribed in Clause 1, Article 3 of this Decision, Funds of guaranteeing financial obligations shall be still managed by the PetroVietNam and used to clean up when the fixed works, equipment and facilities end its activities.

Chapter 5:

IMPLEMENTATION PROVISIONS

Article 23. Responsibility of the Ministries

1. Ministry of Industry shall

Preside over and coordinate with the Ministries of: Transport, Natural Resources and Environment, Construction, Finance, Fisheries to carry out the inspection and examination of the clean-up of fixed works, equipment and facilities.

2. Ministry of Finance shall

Coordinate with the Ministry of Industry to detail the management and use of funds of guaranteeing financial obligations for the clean-up of fixed works, equipment and facilities.

3. The Ministries of: Natural Resources and Environment, Construction, Transport, Fisheries within their functions and powers, shall coordinate with the Ministry of Industry in performing the state management for the activities of clean-up of fixed works, equipment and facilities.

Article 24. Responsibilities of the PetroVietNam

1. To implement the monitoring of clean-up activity of fixed works, equipment and facilities of the organization or individuals.

2. To manage funds of guaranteeing financial obligations on the principles of safety, effectiveness, and make unconditional payment of the amount in the funds of guaranteeing financial obligations, including interest for the organizations, individuals to fulfill their clean-up obligations of fixed works, equipment and facilities.

3. Every year, inform organizations and individuals on the management and use of funds of guaranteeing financial obligations. Exchange and agree with organizations and individuals on the plan to use the funds of guaranteeing financial obligations.

4. Subject to the inspection of the Ministry of Finance, the Ministry of Industry in the management of funds of guaranteeing financial obligations.

Article 25. Handling of violations

Organizations, individuals violating the provisions of this Decision shall be handled in accordance with the law provisions.

Article 26. Effect

This Decision takes effect 15 days after its publication in the Official Gazette.

Article 27. Implementation Organization

1. The Ministry of Industry guides and organizes the implementation of this Decision.

2. The Ministers, heads of ministerial-level agencies, the heads of the Governmental agencies, Presidents of the People's Committees of provinces and cities directly under the Central Government shall have to implement this Decision. /.