Duration of Petroleum Contracts

Duration of Petroleum Contracts

1. The term of a petroleum contract shall not exceed 30 years, of which the exploration phase shall not exceed 5 years, unless otherwise provided in Clause 2 of this Article.

2. For petroleum blocks included in the list of blocks eligible for investment incentives or special investment incentives, the term of a petroleum contract shall not exceed 35 years, of which the exploration phase shall not exceed 10 years.

3. The term of a petroleum contract may be extended, but not for more than 5 years. The exploration phase may also be extended, but not for more than 5 years, subject to approval by the Ministry of Industry and Trade, unless otherwise provided in Clause 4 of this Article.

4. In special cases, for reasons of national defense or security, complex geological conditions, exceptionally difficult field conditions, or to ensure efficient gas exploitation, the Prime Minister may approve an additional extension of the petroleum contract and of the exploration phase beyond the limits specified in Clause 3 of this Article, based on the assessment of the Ministry of Industry and Trade.

5. After a commercial discovery has been declared but where there is no market and no suitable pipeline or processing facilities, the contractor may retain the discovered gas area. The retention period shall not exceed 5 years, subject to approval by the Ministry of Industry and Trade.
   If, upon expiry of this period, there is still no market or appropriate infrastructure, the Prime Minister may approve an extension of the retention period for up to 2 additional years, based on the Ministry’s assessment. During the retention period, the contractor must carry out the committed work under the petroleum contract.

6. In the event of force majeure, the parties to the petroleum contract may agree to temporarily suspend the performance of certain rights and obligations under the contract. The Vietnam Oil and Gas Group shall report to the Ministry of Industry and Trade for a decision.
   The suspension period due to force majeure shall be counted from the occurrence of the event until it ceases to exist.

7. In cases involving national defense or security, the suspension period for performing certain rights and obligations under the petroleum contract shall be decided by the Prime Minister at the proposal of the competent authority.

8. The extended exploration period, the gas discovery retention period, and the suspension period due to force majeure or for reasons of defense and security shall not be included in the total term of the petroleum contract.

9. The Government shall provide regulations on the dossier, order, and procedures for extending the term of petroleum contracts, extending the exploration phase, deciding on the gas discovery retention period, and suspending certain rights and obligations in cases of force majeure or for reasons of defense and security.

(Legal basis: Article 31 of the 2022 Petroleum Law)