ICLG report- Vietnam Oil & Gas sector

Gas Regulation 2011

Published by Global Legal Group, in association with Ashurst LLP, withcontributions from:

ǼLEX Ali Budiardjo, Nugroho, ReksodiputroAllens Arthur RobinsonBell Gully BNG LegalChandler & Thong-ek Law Offices LimitedCMS Cameron McKennaCogan & Partners LLPCriales, Urcullo & AntezanaDebarliev, Dameski & KelesoskaDr Kamal Hossain & AssociatesDuane Morris LLPEstudio Gálvez AbogadosFortunati & AsociadosGarrigues Gorrissen FederspielHaavind ASHogan LovellsInterJuris Abogados, S.CJeantetAssociés AARPI KALO & ASSOCIATESKing & Spalding LLPLoyens & Loeff N.V.Mohamed Ridza & CoO'Flynn ExhamsPachiu & Associates Rosenberg, Hacohen, Goddart & EphratSchoenherrSNR Denton Studio Legale Bonora e AssociatiTGC Corporate Lawyers Uría Menéndez Vellani & Vellani

The International Comparative Legal Guide to:

A practical cross-border insight into Gas Regulation work

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Vietnam

1 Overview of Natural Gas Sector

1.1 A brief outline of Vietnam’s natural gas sector, including ageneral description of: natural gas reserves; natural gasproduction including the extent to which production isassociated or non-associated natural gas; import andexport of natural gas, including liquefied natural gas(LNG) liquefaction and export facilities, and/or receivingand re-gasification facilities (“LNG facilities”); natural gaspipeline transportation and distribution/transmissionnetwork; natural gas storage; and commodity sales andtrading.

1. Natural gas reserves and production

According to BP Statistical Review of World Energy 2010,Vietnam’s gas reserve is approximately 10 trillion cubic feet. Theproven reserves can be found under Endnote 1.

Vietnam’s gas industry has a comparatively short history. Large-scale gas development based on offshore resources began in 1995in Vietnam, with the production of associated gas from the Bach Hofields. This was followed in 2003 when gas from the Nam ConSonbasin gas fields started to come on-stream, then from Block 11-2 in2006. In 2007 came the first deliveries of gas from the PM-3development in the offshore area jointly administered withMalaysia. (See Endnote 2 and Endnote 3.)

Natural gas projects

In the past five years there has been only one large new projectunder negotiation, namely Chevron’s B&52 gas prospect in theMalay-Tho Chu basin for the O Mon power project. It is expectedto take approximately 5 years to bring it on-stream from the time ofa final official decision to go ahead.

2. Pipeline

In the south of Vietnam, new production feeds into, and newconsumption draws from, a “national trunk pipeline” that alsoconnects the O Mon, Ca Mau and Phu My consumption centres toimprove security of supply of each.

Pipeline projects that may be imminent tend to be small scale, suchas the collection, as compressed natural gas (CNG), of associatedgas presently flared mainly in the Bach Ho area and the tie-in ofmarginal gas fields, mainly in the Nam Con Son area. Projects thatawait approval are still being negotiated on a case-by-case basis.

3. Forecast of World Bank in Report No. 52865-VN

The geography of the vision for Vietnam’s gas industry in 2025:

6-8 significant offshore developments, each of 2-3BCM/annum, 2 or 3 of which are in the north.

Some of these are supported by new pipelines to onshore,

others are tributary to existing pipeline systems such as thosefrom PM-3, Nam Con Son and Bach Ho offshoredevelopments.

Depending on the assessment of domestic gas prospects, afirst LNG project has been developed or is in progress for 2-5 BCM/annum (1.5-3.7 million tonnes/annum).

A trunk onshore pipeline connects the main gas consumingcentres from Ca Mau and OMon in the southwest, across theDelta to Phu My and possibly extending as far as QuangNgaiprovince.

Gas transmission “rings” have been created around HCMC.If large-volume gas supply comes to the north, “rings” arebuilt around Hanoi-Haiphong, in both cases feedingdistribution systems that serve industrial and commercialmarkets.

The refinery-petrochemical complex at Dung Quat is the firstindustrial development of this kind that presents sufficientmarket to support a new gas project.

Facilities have been created to collect associated and non-associated gas from marginal and remote fields, to supply thedomestic market.

All offshore basins that are not disputed with other countrieshave been explored to the degree necessary to providereliable 1P and 2P reserves data for purposes of oil and gasproduction planning.

In the technology area, means have been found to deal withhigh CO2 content natural gas and to develop CBM fromVietnam’s coal resources.

1.2 To what extent are Vietnam’s energy requirements metusing natural gas (including LNG)?

Gas currently accounts for about one-third of Vietnam’s totalannual energy generation. Two major gas to power projects are inoperation: Bach Ho + Nam Can Son developments feeding the PhuMy power complex at over 4 BCM annually and the PM-3development in the Malay-Tho Chu Basin, feeding Ca Mau powerand fertilizer plants at 1.5 BCM/yr. A third gas to power project ispresently under negotiation (Block B&52 to O Mon, eventually atleast 3.3 BCM/yr).

Gas now accounts for about 15% of Vietnam’s primary energy

supply. This compares favourably with averages in the Asia Pacificregion and slightly less than global levels.

The Power Master Development Plan (Power Master DevelopmentPlan approved 2009) and the draft National Gas Master Planenvisage gas use for energy generation in Vietnam to risedramatically from >8 BCM in 2010 to 13/15 BCM in 2015 and21/24 BCM in 2025. This represents an approximate tripling of

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supply and demand in 15 years, focused almost entirely on powergeneration.

The country’s primary energy demand is met by an estimated 44%through oil, 18 % through gas, 17% through coal and 17% throughhydro-power. 85% of gas supplied in Vietnam is consumed forpower generation, 10% for fertilizer and 5% for other industries.

1.3 To what extent are Vietnam’s natural gas requirementsmet through domestic natural gas production?

According to BMI’s Report, Vietnam’s gas production is slightly

higher than its demand: estimated gas consumption in 2010 willaccount for 1.84% of Asia Pacific, while its share of production isput at 2.20%. By 2014, its share of gas consumption is forecast tobe 2.56%, with the country accounting for 4.60% of supply. Gasproduction is expected to rise from an estimated 9.1bcm in 2010 to34.0bcm in 2019, with only 184% demand growth.

As the main gas supplier, PetroVietnam Gas Corp. (PVGAS) hasannounced plans to import around 3 BCM of gas annually by 2015.Due to an increasing domestic energy demand, the shortage isexpected to increase to approximately 4-8 BMC per year up to2025.

1.4 To what extent is Vietnam’s natural gas productionexported (pipeline or LNG)?

According to BMI’s Report, Vietnam has potential for gas export,

but not likely until the period from 2010 to 2019, based oncomparison between gas consumption and demand.

2 Development of Natural Gas

2.1 Outline broadly the legal/statutory and organisationalframework for the exploration and production(“development”) of natural gas reserves including:principal legislation; in whom the State’s mineral rights tonatural gas are vested; Government authority orauthorities responsible for the regulation of natural gasdevelopment; and current major initiatives or policies ofthe Government (if any) in relation to natural gasdevelopment.

The main purposes of a petroleum legislative framework are toprovide the basic context for and the rules governing petroleumoperations in the host country; to regulate them as they are carriedout by domestic, foreign, and international enterprises; and todefine the principal administrative, economic, and fiscal guidelinesfor investment activity in the sector. The three essential elements ofsuch a framework in Vietnam are the Petroleum Law 1993, withamendments 2000 and 2008, the implementing regulations(primarily Decrees and Circulars), and the Model Contract.

Since the 1980s Vietnam has developed a variety of contractualmodels to explore and develop its petroleum resources. The firstconcept was a joint venture on the basis of which was establishedthe Vietsovpetro agreement between Vietnam and RussianGovernments. Subsequently standard terms for production-sharingcontracts were developed and promulgated.

State Property in Petroleum: the Petroleum Law asserts andconfirms that all petroleum lying within the State’s jurisdiction,both onshore and offshore - including offshore areas where itexercises exclusive economic interest over such resources - is theexclusive property of the State. Any provisions to the contrary inother laws or rights granted or vested hereunder in derogation of

same are expressly superseded by this provision in the PetroleumLaw.

Regarding its regulatory regime, Vietnam has opted for the co-existence of a Competent Authority and a national oil company(NOC). The State vests the NOC with exclusive authority over thesector as the de facto Competent Authority,

Accordingly, gas exploration and production is fully controlled bythe State and the only company authorised to develop gas is theState-owned PetroVietnam, which primarily acts through itssubsidiary PVGAS. The Petroleum Law (enacted in 1993 andreformed in 2000) provides an overall framework for theexploration and development of gas resources and related-services;it is supplemented by the implementing Decree 48/2000/ND-CP.Nonetheless, there is no clearly established process for developinggas projects in Vietnam and the legal framework is characterised bya lack of clarity and transparency.

Foreign investors may conduct gas development projects only incooperation with PetroVietnam, by way of a Production SharingAgreement (PSA), joint venture contract or other contractual forms.For upstream projects PSAs are generally concluded between therelevant exploration and production companies and PetroVietnam;PetroVietnam retains a monopoly in the purchase or reselling of anygas. All project details and pricing are based on negotiations withPetroVietnam on a project-by-project basis, which has let to delaysin project development in the past.

Current major initiatives or policies of the Government

The National Strategy on Energy Development set forth thestrategic development of the petroleum sector until 2020:

Build up legal framework for the petroleum sector, especiallyin the natural gas sector: regulations on permission oftransmission and distribution of natural gas, on approval ofnatural gas price, transmission and distribution fees and ontechnical standardisation.

Encourage petroleum survey, periodically consider andreadjust financial terms so that petroleum activities becomecompetitive in the region.

Prioritise natural gas development and use; encourage andgive incentive to developers in natural gas; and diversifyownership in investment and operation of electricitygeneration factories using natural gas.

2.2 How are the State’s mineral rights to develop natural gasreserves transferred to investors or companies(“participants”) (e.g. licence, concession, service contract,contractual rights under Production Sharing Agreement?)and what is the legal status of those rights or interestsunder domestic law?

The Petroleum Law allows two ways of conducting petroleumdevelopment: through forming an incorporated joint venture andthrough a Production Sharing Agreement. Both of these twoapproaches are referred to in the law, in short, as PetroleumAgreements to which the Vietnamese party is PetroVietnam. AllPetroleum Agreements must follow the Model Contract. Anyderogation from such form must be approved by the Prime Minister.

Under the Model Contract, investors or companies (referred to inthe Model Contract as Operators) are entitled to retain a part of theexploited petroleum to cover their investment and operationexpenses (called cost recovery petroleum). The Operator will bethen entitled to share the remaining petroleum net of taxes andexcises (called the profit petroleum). The cap of expenses-recovering oil/gas is up to 70% of the total exploited petroleum incase of petroleum investment promotion projects and 50% for othercases. Finally, the Operator can sell its oil/gas entitlement freely on

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the open market and transfer the profit abroad, subject to paymentof taxes.

The Petroleum Law also sets forth a framework for PetroleumContract as follows:

1. Contractual period

For natural gas prospection, exploration and exploitation projects,the term of Petroleum Contract shall not exceed 30 years, of whichthe prospection and exploration period shall not exceed 7 years.

The contractual period of the Petroleum Contract may be extended,but not exceeding a further 5 years, and 2 years for the explorationperiod.

If gas with commercial value is discovered but the market demandand/or conditions on pipelines and suitable treatment facilities donot exist, contractors may retain the areas where gas is found. Theduration of retention of such an area shall not exceed 5 years andmay, in special cases, be extended for up to 2 more years.

2. Restriction of area for petroleum operation

The area for prospecting and exploration under a petroleum contractshall not cover more than two (2) blocks. In special cases, theVietnamese Government has authority to permit a greater area.

2.3 If different authorisations are issued in respect of differentstages of development (e.g., exploration appraisal orproduction arrangements), please specify thoseauthorisations and briefly summarise the most important(standard) terms (such as term/duration, scope of rights,expenditure obligations).

Different stages of petroleum operation are set forth by thePetroleum Law and the Decree implementing the Petroleum Lawbroadly as follows:

1. Bidding process

Upon notification of the invitation for bids made by PetroVietnam,a bidder company shall within 60 days lodge its bid, including itsoffers and commitments to fulfil the bidding norms: (i) the share ofoil and gas profit to the host country; and (ii) the minimumworkload and minimum financial commitments. Then the bids willgo through processes of bid opening, evaluation and appraisal ofbidding results.

Upon notification of the bidding results, PetroVietnam shallnegotiate within 90 days with the bid winner on the petroleumcontract on the basis of content of the bid.

Appointment of the bidder will be submitted to the Ministry ofIndustry and Trade, and then the Prime Minister shall consider andissue a formal decision on appointment of the bidder, based on theappraisal report of the Ministry of Industry and Trade.

2. Appraisal of petroleum contract and grant of certificates

A dossier for appraisal of a petroleum contract shall be submitted tothe Ministry of Industry and Trade.

The dossier will be circulated around different ministries 2 monthsbefore it is submitted to the Prime Minister for approval. Uponapproval of the Prime Minister, PetroVietnam and the contractorshall sign the petroleum contract.

Within 10 working days after receiving the signed originalpetroleum contract, the Ministry of Industry and Trade is authorisedto grant an Investment Certificate to the investors.

3. Project and work programmes

The successful bidder/party to the Petroleum Contract is requiredto:

draw up conceptual plans and detailed plans forts activities,and submit them to the Competent Authority for

consideration and approval. The time limit for considerationand approval is 60 days for a conceptual plan and 30 days fora detailed plan, from the date of receiving such plans;

draw up an annual work programme corresponding to eachperiod in conformity with the commitments in the PetroleumContract regarding the time limit, work contents andfinancing, and send them to PetroVietnam for agreement onthe implementation thereof; and

prepare the documents as outlined in question 2.11.

4. Prospecting and exploration stage

An agreement must be reached with PetroVietnam containingminimum commitments regarding the geophysics survey volume,number of drilled wells volume and other integrated studies, as wellas commitments regarding training, recruitment and technologytransfer. The cost estimates for the above-mentioned minimumwork commitment shall be considered the minimum financialcommitment.

During this stage, the contractor may start early production in thecontractual areas, on conditions that it submits to the CompetentAuthority the Early Production Plans for approval.

5. Exploration stage

Upon discovery of petroleum, the contractor must promptly notifyand report on the study results, evaluation and relevant documentsto the Competent Authority and PetroVietnam.

The contractor and PetroVietnam must reach an agreement in therelevant petroleum contract on the terms regarding criteria todetermine fields of commercial value, the time limit for submittingthe field reserve appraisal programmes, the outline plan and fielddevelopment plans.

Then the contractor has to notify the reserve appraisal results toPetroVietnam. If the appraisal results show that the field is ofcommercial value, the contractor and PetroVietnam shall have tosubmit to the Competent Authority the reserve report and the fielddevelopment plans for submission to the Prime Minster forapproval.

2.4 To what extent, if any, does the State have an ownershipinterest, or seek to participate, in the development ofnatural gas reserves (whether as a matter of law orpolicy)?

The State’s exclusive ownership over its natural resources is amatter of policy and law, which is recognised by Vietnam’sConstitution. As stated above, the Petroleum Law asserts andconfirms that all petroleum is within the State’s jurisdiction. TheState’s ownership interest is exercised by PetroVietnam that isempowered to conduct petroleum operations and to enter intopetroleum contracts. In case a petroleum project is shared betweenPetroVietnam and other party(ies), the State’s ownership interestwill be assured by the following rules:

1. Ownership of fixed installations and equipment

Although a contractor is permitted to install and operate andmaintain fixed installations and equipment servicing PetroleumOperations, the ownership of such fixed installations and equipmentshall belong to the State of Vietnam from the date agreed upon bythe parties to a Petroleum Contract.

2. Ownership of samples, cores, data and information

All the samples, cores, data and information acquired during theconduct of Petroleum Operations are the property of the State.

3. Preemptive right over assignment of Petroleum Contract

PetroVietnam shall have the preemptive right to acquire thePetroleum Contract or portion thereof in case of total or partial

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assignment of Petroleum Contract bythe contractor.

While PetroVietnam operates the State’s monopoly, its gassubsidiary PVGAS reportedly plans to conduct an IPO on the HCMCity Stock Exchange. Under this plan, some 5% of shares may beoffered to investors, while a further 20% may be offered to one ormore strategic investors.

2.5 How does the State derive value from natural gasdevelopment (e.g. royalty, share of production, taxes)?

The State derives value from petroleum operations primarilythrough royalties (referred to as a “tax on natural resources”),corporate income taxes and share of production.

1. Royalties

According to Circular No. 32/2009/TT-BT, Royalties are payable incrude oil or natural gas and progressive on the basis of the total netpetroleum output exploited in each royalty payment period, asbelow:

Royalty amount for natural gas:

Royalties shall be paid in crude oil or natural gas; in cash; orpartially in cash and partially in crude oil or natural gas.

2. Corporate income tax (“CIT”)

Determination of taxable income:

Determination of the payable CIT amount:

The basic CIT rate is 50%. The rate applicable to investmentpromotion projects is 32%. The contractor may be exempted fromCIT for a maximum period of two (2) years and entitled to the fiftypercent (50%) reduction of CIT for a maximum period of two (2)subsequent years.

Profits for reinvestment shall not be subject to reimbursement ofenterprise income tax.

3. Share of production

According to the Model Contract, PetroVietnam is entitled to sharepetroleum production net of:

1. Cost recovery petroleum

This kind of expense is subject to negotiation of the PetroleumContract. The cap set up by the Petroleum Law is up to 70% of thetotal exploited petroleum in case of petroleum investmentpromotion projects and 50% for other cases. In case of absence ofsuch a negotiation, the default rate of 35% will apply.

2. Royalty

As described above.

2.6 Are there any restrictions on the export of production?

At present, there are no express restrictions of the export ofproduction. Article 28 of the Petroleum Law recognisescontractors’ rights to export petroleum production without having toapply for export permits, though export duty issues will be relevantas discussed below.

Despite this general right to export, the Government does retaindiscretion to mandate restrictions on exports and/or domestic sale insome circumstances.

Determination of payable export duty amounts:

The export duty percentage is determined as follows:

In general then, the higher the royalty rates, the smaller the exportduty will be.

2.7 Are there any currency exchange restrictions, orrestrictions on the transfer of funds derived fromproduction out of the jurisdiction?

Contractors have the right to open accounts in Vietnam andoverseas; overseas accounts must be registered with Vietnam’sState Bank.

Contractors have the right to exchange foreign currencies atcommercial banks or licensed credit institutions for purposes ofmeeting foreign currency transaction needs or other permittedtransactions, pursuant to generally-applicable Vietnameselegislation on foreign exchange management. Exceptions are made

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for certain “important projects”.

In general, the amounts of foreign currency exchange must notexceed the amount in Vietnam Dong earned by the contractor fromthe sale of oil and gas on the Vietnamese market.

The Petroleum Law allows foreign investors to transfer abroadincome from the sale of petroleum being part of recoveredexpenses, profits and other lawful revenues earned in the course ofpetroleum activities, after fulfilling the tax obligations. Transfer ofsuch revenue is no longer subject to a separate remittance tax.

2.8 What restrictions (if any) apply to the transfer or disposalof natural gas development rights or interests?

As stated above, contractors have the right to transfer part or all oftheir interest in Petroleum Contracts (i.e. transfer of the capitalamount contributed pursuant to the Petroleum Contract) if:

a) the transferee undertakes to continue to perform thePetroleum Contract concluded by the transferor; and

b) satisfying the conditions on transfer of capital and projectsaccording to the investment law.

The transfer of part or whole of the Petroleum Contract must beapproved by the Prime Minister and takes effect as prescribed in themodified investment certificate.

However, the State, through PetroVietnam, has a preemptive rightto acquire the Petroleum Contract or portion thereof proposed fortransfer.

The revenue derived from such a transfer is subject to CIT, asdescribed above, except for the CIT rate is 25% and CITexemptions and reductions are not applicable.

2.9 Are participants obliged to provide any security orguarantees in relation to natural gas development?

The Petroleum Law does not require a contractor to provide anyspecific security or guarantee. However the law does requirecontractors to meet minimum workload and financial commitments,as agreed in the relevant Petroleum Contract.

2.10 Can rights to develop natural gas reserves granted to aparticipant be pledged for security, or booked foraccounting purposes under domestic law?

There are no express rules in Vietnam as to whether rights todevelop natural gas reserves can be pledged for security, or bookedfor accounting purposes under domestic law.

The Civil Code defines property rights as “rights able to beevaluated in money and transferable through civil transactions,including intellectual property”. On this basis, contractors’ rightsunder Petroleum Contracts, transferrable with permission of thePrime Minister, may be considered a property right under the CivilCode and therefore prima facie able to be pledged. Despite this, theGovernment is likely to be unwilling to recognise such rights asproperty rights for this particular purpose and it is notable thatnothing in the accounting legislation expressly permits contractorsto book such rights for accounting purposes. Similarly, legislationon security transactions does not expressly recognise the right topledge such rights.

2.11 In addition to those rights/authorisations required toexplore for and produce natural gas, what other principalGovernment authorisations are required to developnatural gas reserves (e.g. environmental, occupationalhealth and safety) and from whom are theseauthorisations to be obtained?

After the conclusion and approval of a Petroleum Contract butbefore any petroleum operation, the contractor must make or drawup:

1. A report on environmental impact assessment.

2. A safety control programme and the risk evaluation enclosedwith measures to mitigate incidents and damages.

3. Emergency response plans, including technical solutions andthe utilisation of means and equipments to overcome theincidents.

The Petroleum Law is silent on the contents and to whom thesedocumentations are to be addressed, although it is of common senseto address them to the Competent Authority (Ministry of Industryand Trade) and PetroVietnam.

2.12 Is there any legislation or framework relating to theabandonment or decommissioning of physical structuresused in natural gas development? If so, what are theprincipal features/requirements of the legislation?

A. Abandonment of fixed installations and equipment

During the course of petroleum operations, the contractor mustfrom time to time abandon fixed installations and equipment nolonger in use. The contractor must draw up plans on abandonmentof fixed installations and equipment and make financial provisionsfor the abandonment. Expenses for the abandonment shall beaccounted as cost recovery petroleum. However, this obligationonly binds the contractor in case of successful exploration andcommercial production thereafter.

B. Abandonment of petroleum wells

The contractor must always include a preliminary plan of wellabandonment into the general plan of production for each well orfor the whole block under the Petroleum Contract. Then he hasobligation to make plans of well abandonment for each abandonedwell.

2.13 Is there any legislation or framework relating to gasstorage? If so, what are the principlefeatures/requirements of the legislation?

At present there is no specific regulation on LNG storage. Withregard to LGP, companies engaging in LPG activities must haveminimum storage capacity, as specified by Decree No.115/2009/NĐ-CP on trading in liquefied petroleum gas:

1. Requirement of minimum storage capacity

For LPG production or processing:companies must have an LPGstorehouse (beyond the storing capacity already approved in theinvestment project), with a total capacity of tanks of at least 5,000m3 and built under planning and according to current technicalregulations to receive imported LPG from ships or other vehicles.

For leasing storehouses and ports for LPG exportation orimportation:companies must own or co-own LPG storehouses witha total capacity of tanks of 1,000 m3 or more under a joint ventureor capital contribution contract approved by a competent authorityand built under planning and according to current technicalregulations.

For grade-I LPG distribution: companies must own or co-own an

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LPG storehouse with a total capacity of tanks of at least 800 m3 toreceive LPG from ships or other transport vehicles, and built underplanning and according to current technical regulations.

2. Requirement of minimum LPG volume in storage

(circulation reserves)

LPG wholesalers (exporter, importer, producer or processor or agrade-I LPG distributor) shall maintain the minimum LPGcirculation reserve equal to 7 days’ supply for their distributionsystems and annually increase this reserve so that by 2015 thisreserve will be equal to at least 15 days’ supply.

Traders acting as general agents shall maintain the minimum LPGcirculation reserve equal to 3 days’ supply.

3 Import / Export of Natural Gas (including LNG)

3.1 Outline any regulatory requirements, or specific terms,limitations or rules applying in respect of cross-bordersales or deliveries of natural gas (including LNG).

The following is only expressly for LPG, but LNG is considerablylikely to be subject to the same conditions and regulations:

A. Conditions for a trader engaging in LPG export /

import:

1. Having a business registration certificate, covering the rightto engage in LPG export and/or import.

2. Owning or co-owning a wharf within the Vietnamese seaportsystem; or having entered into a contract for lease of a wharffor at least one year for receiving LPG ships; havingstorehouses of a total tank capacity of at least 3,000 m3 forstoring imported LPG from ships or other vehicles.

3. Owning at least 300,000 LPG bottles (excluding minibottles). These LPG bottles must be compatible withtrademarks and brands legally registered.

4. Having an LPG bottling station with a certificate ofsatisfaction of LPG bottling conditions.

5. Having an LPG distribution system, including memberenterprises, branches, shops or automobile LPG-fillingstations or LPG supply stations and at least 40 LPG-tradingagents (general agent and agents or agents) that fully satisfyconditions for agents as required by law.

B. Obligation of LPG circulation reserves

1. LPG wholesalers shall maintain the minimum LPGcirculation reserve equal to 7 days’ supply for theirdistribution systems and annually increase this reserve sothat by 2015 this reserve will be equal to at least 15 days’supply.

2. Traders acting as general agents shall maintain the minimumLPG circulation reserve equal to 3 days’ supply.

4 Transportation

4.1 Outline broadly the ownership, organisational andregulatory framework in relation to transportationpipelines and associated infrastructure (such as naturalgas processing and storage facilities).

According to the ASMA Technical Assistance for the Revision ofthe Existing Legal and Regulatory Framework 2003, theGovernment of Vietnam is currently pursuing the establishment ofa legal and regulatory framework for gas transmission anddistribution. However, at present, legislation only provides limitedterms in this area and more is expected to be adopted in due course.

A pipeline land strip (the land area and the space within twoboundaries of the pipeline land strip) will be assigned by the Stateto the investor who shall have the full right to use such land stripsin the process of constructing, installing, operating and maintainingthe pipelines. While Vietnamese law only confers “land use rights”to investors (with the State retaining ultimate ownership of land),such land use rights can be considered de facto full property rightsover the land in question in accordance with the terms of theparticular land use rights granted. Investors may separately own thepipelines themselves.

In practice, PetroVietnam may directly, or through its subsidiaries,take part in the project as a party to the contract and will be, in mostcases, responsible for contributing land use rights with the otherinvestor(s) responsible for constructing the pipelines and associatedinfrastructure. In such case, the land use rights will be accountedfor as equity of the project, and therefore the project will beclassified as a “State budget-funded project”. If the portion fromthe State budget is more than 50% of total investment costs, theproject will be subject to process of investment assessment andsupervision, including additional public tender requirements.

4.2 What Governmental authorisations (including anyapplicable environmental authorisations) are required toconstruct and operate natural gas transportation pipelinesand associated infrastructure?

Vietnamese law does not clearly state whether a project ofconstruction and operation of pipelines is considered “a petroleumproject” (subject to petroleum legislation), a construction project(subject to construction legislation) or a mix of the two. In absenceof specific guidance on this issue, both legal frameworks will, inpractice, apply. The primary petroleum-related aspects applicablein this area have been outlined under questions 2.3 and 2.11 above.The following touches on predominant construction-related points.

The construction of pipelines is classified, for purposes ofconstruction legislation, as construction for oil and gas extraction.Such construction projects will fall into one of three classifications:

A Investment Project on the construction (feasibility study

report)

The investment study reports on the construction must contain:

1. Details of explanations of an investment project on theconstruction of works, including the investmentnecessity/objective and the total investment.

2. Details of the basic design of an investment project on theconstruction of works.

B. Appraisal of the Investment Project on the

construction

As noted above in question 4.1, the process of project appraisal andapproval that applies to a given investment project varies onwhether or not State capital is involved. The following outlines inbrief the process applicable in the case of no State capitalinvolvement.

1. Obtaining opinions of the competent agency on the

GROUP-A PROJECTSTotal investment over VND 1.5 trillion

(app. USD 75 million)

GROUP-B PROJECTSVND750billion – 1.5 trillion (app.

USD3.75million - USD75million)

GROUP-C PROJECTSUnder VND 75 billion (app. US D3.75

million)

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Investment Project (officially within 10-20 working days):

For projects group-A projects: The Ministry of Industry andTrade.

For group-B and group-C projects: Provincial-level Industryand Trade Services.

2. Appraisal: once positive opinions have been obtained, theinvestor must proceed to have the project formally appraised.

C. Appraisal and approval of technical designs and working

drawing designs

D. Construction permit

After the filing of an application, a construction permit shall begranted by Provincial People’s Committees for grade A and grade Bconstruction projects and by district-level People’s Committees forother constructions.

4.3 In general, how does an entity obtain the necessary land(or other) rights to construct natural gas transportationpipelines or associated infrastructure? Do Governmentauthorities have any powers of compulsory acquisition tofacilitate land access?

As noted above, a pipeline land strip will be allocated by the Stateto the project investor who shall have the full right to use such landstrip in accordance with the particular terms of the relevant land userights certificate granted. Land granted to foreign-invested investorentities will usually take the form of land lease, while land grantedto domestic investors may either be in the form of lease or long-term ‘allocation’. Vietnamese law provides that the State managesall land on behalf of the people of Vietnam and, as such, the Statedoes have power to compulsorily acquire land though subject tocompensation obligations.

4.4 How is access to natural gas transportation pipelines andassociated infrastructure organised?

Vietnamese law is silent on this issue and in practice access must benegotiated on a case-by-case basis with PetroVietnam and theGovernment, usually in the first instance via the Ministry ofIndustry and Trade.

4.5 To what degree are natural gas transportation pipelinesintegrated or interconnected, and how is co-operationbetween different transportation systems established andregulated?

To date, Vietnam’s gas pipelines have been exploited independentlyfrom other systems and each other. There are currently no legalprovisions relating to co-operation or access between differenttransportation systems.

4.6 Outline any third-party access regime/rights in respect ofnatural gas transportation and associated infrastructure.For example, can the regulator or a new customerwishing to transport natural gas compel or require theoperator/owner of a natural gas transportation pipeline orassociated infrastructure to grant capacity or expand itsfacilities in order to accommodate the new customer? Ifso, how are the costs (including costs of interconnection,capacity reservation or facility expansions) allocated?

There are no specific regulations on this issue in Vietnamese law atpresent. The National Strategy on Energy Developmentrecommends diversifying modes of ownership and eliminatingmonopoly until 2020. However, it is not known when the right to

access to gas transportation pipelines will be legally recognised.Theoretically, the Competition Law can impose a duty on acompany to grant access to other competitors, though suchregulations have not been widely used in practice in anycommercial sector.

4.7 Are parties free to agree the terms upon which naturalgas is to be transported or are the terms (includingcosts/tariffs which may be charged) regulated?

Vietnamese law is silent about this issue. However, the NationalStrategy on Energy Development encourages competition on thefield implying freedom of agreement on terms and conditions oftransportation of natural gas. Obviously, this must be conductedwithin the framework proposed in the National Strategy on EnergyDevelopment: “Important responsibilities of management of naturalgas are: grant of Transportation and Distribution permit, approval ofnatural gas price, transportation and distribution cost, technicalstandards.”

5 Transmission / Distribution

5.1 Outline broadly the ownership, organisational andregulatory framework in relation to the natural gastransmission/distribution network.

Although the law does not prohibit private ownership, almost alldistribution systems are currently State-owned.

The Ministry of Industry and Trade assumes the primeresponsibility for, and coordinates with, concerned ministries andbranches and provincial-level People’s Committees in devising andpublicising a national plan on development of LPG-tradingestablishments, including LPG production or processing plants,LPG storehouses with a total capacity of tanks and cisterns of 5,000m3 or more, ports for LPG exportation or importation which canaccommodate ships of a tonnage of 5,000 tonnes or more; andinspecting and supervising the implementation of the approvedplanning.

Provincial People’s Committees devise plans on development ofLPG-trading establishments, including specialised LPG-tradingstores, LPG supply stations, automobile LPG-filling stations, LPG-bottling stations, LPG storehouses with a total capacity of tanks,and cisterns of under 5,000 m3, then incorporate them in their localsocio-economic development master plans, ensuring theirconformity with the national master plan, and inspect and supervisethe implementation of such plans after they are approved.

Decree No. 115/2009/NĐ-CP dated 2 November 2009, assigns theMinistry of Industry and Trade to promulgate regulations on LPGtrading agents, but to date no such regulations have been issued.

5.2 What Governmental authorisations (including anyapplicable environmental authorisations) are required tooperate a distribution network?

An LPG distributor must satisfy the following conditions or obtainthe following authorisations:

1. Grade-I LPG distribution:

a business registration certificate, covering the registrationfor LPG trading;

owning or co-owning an LPG storehouse with a totalcapacity of tanks of at least 800 m3 to receive LPG fromships or other transport vehicles;

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owning at least 300,000 LPG bottles of all kinds (except minibottles), trademarks and brands already registered withcompetent authorities under law;

having an LPG-bottling station with a certificate ofsatisfaction of LPG bottling conditions; and

having an attached LPG distribution system, consisting ofbottled LPG-selling shops or LPG supply stations orautomobile LPG-filling stations, and at least 20 LPG-tradingagents (general agent and agents or agents).

2. LPG-trading general agent

having a business registration certificate, covering theregistration for LPG trading agency;

having an LPG and bottled LPG storehouse of a capacity ofat least 2,000 LPG bottles or bottled LPG of all kinds (exceptmini bottles);

having an LPG distribution system consisting of bottledLPG-selling stores or automobile LPG-filling stations, and atleast 10 agents; and

having entered into an agency contract of a term of at least 1year, which is still valid, with an eligible LPG wholesaler.

3. LPG-trading agent

having a business registration certificate, covering theregistration for LPG trading agency;

having a bottled LPG-selling store or an automobile LPG-filling station; and

having entered into an agency contract of a term of at least 1(one) year, which is still valid, with an eligible LPGwholesaler or general agent.

4. Bottled LPG-sales outlets

having a business registration certificate, covering theregistration for sale of bottled LPG;

having entered into a bottled LPG purchase contract of aterm of at least 1 year, which is still valid, with an eligibleagent or general agent or LPG wholesaler; and

having a certificate of satisfaction of fire prevention andfighting conditions, a certificate of satisfaction of securityand order conditions granted by a competent police office.

5. Automobile LPG-filling stations

having a construction permit accompanied with a project ordesign approved by a competent authority;

measuring devices have been inspected and corrected underregulations;

equipment subject to stringent requirements on automobileLPG filling safety has been inspected and registered underregulations; and

having a certificate of satisfaction of fire prevention andfighting conditions and a certificate of satisfaction of securityand order conditions granted by a competent police office.

6. Conditions on LPG supply stations

having a construction permit accompanied with a project ordesign approved by a competent authority;

measuring devices have been inspected and corrected underregulations; and

having a certificate of satisfaction of fire prevention andfighting conditions and a certificate of satisfaction of securityand order conditions granted by a competent police office;and a slip of results of inspection of equipment of LPGsupply stations subject to stringent safety requirements.

Moreover, depending on the potential impact of the project on theenvironment, the Investor must obtain an Environment ImpactAssessment or just make an Environmental ProtectionCommitment.

5.3 How is access to the natural gas distribution networkorganised?

Art 47 of the Competition Law prohibits restriction to the access tothe network for a company wishing to join the network andsatisfying the conditions for admission or withdrawal, if suchrefusal constitutes discriminatory treatment and places suchcompany at a competitive disadvantage. However, due to anabsence of detailed regulations on this relatively new field of law inVietnam, investors may find difficulties enforcing such provisionsin practice.

An investor may otherwise want to access an existing networkthrough merger and acquisition activity. However to the extentsuch activity would focus on State targets, the procedures andobstacles are likely to be significant in practice.

5.4 Can the regulator require a distributor to grant capacity orexpand its system in order to accommodate newcustomers?

Vietnam law does not expressly regulate this issue. It is notedhowever that Decree No. 115/2009/NĐ-CP provides someframework on this issue through requirement of minimum storagein Art 52:

LPG wholesalers (LPG exporter, importer, producer orprocessor or a grade-I LPG distributor) must maintain theminimum LPG circulation reserve equal to seven dayssupply for their distribution systems and annually increasethis reserve so that by 2015 this reserve will be equal to atleast 15 (fifteen) days’ supply.

Traders acting as general agents shall maintain the minimumLPG circulation reserve equal to three days supply.

5.5 What fees are charged for accessing the distributionnetwork, and are these fees regulated?

There is very limited regulation on this matter in Vietnam.Generally any fees would be negotiated on a case-by-case basis,subject to negotiation. Investors may have some recourse to theprinciple of non-discrimination set forth in Art 47 of theCompetition Law for admission or withdrawal of a member of thenetwork.

5.6 Are there any restrictions or limitations in relation toacquiring an interest in a gas utility, or the transfer ofassets forming part of the distribution network (whetherdirectly or indirectly)?

There is no express legal regulation on this matter and thereforethese issues are subject to negotiation between any new prospectivemember and the network or otherwise specified in the network’sconditions for admission and withdrawal.

6 Natural Gas Trading

6.1 Outline broadly the ownership, organisational andregulatory framework in relation to natural gas trading.Please include details of current major initiatives orpolicies of the Government or regulator (if any) relating tonatural gas trading.

There is no specific regulation for natural gas trading, however it isuseful to refer to Decree No. 115/2009/NĐ-CP on LPG as described

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in part in questions 5.1 – 5.6 above.

6.2 What range of natural gas commodities can be traded?For example, can only “bundled” products (i.e., the naturalgas commodity and the distribution thereof) be traded?

There is no specific regulation on this issue, but it is useful to referto LPG regulations generally which allows LPG to be traded atstations or bottled according to national standards.

7 Liquefied Natural Gas

7.1 Outline broadly the ownership, organisational andregulatory framework in relation to LNG facilities.

There are no specific regulations for LNG, however it is useful torefer to regulations on LPG for general principles.

7.2 What Governmental authorisations are required toconstruct and operate LNG facilities?

There are no specific regulations on this, however as theconstruction of operation of LNG facilities may be subject to bothpetroleum and construction legislation, it is useful to refer toquestions 2.3 and 4.2 above for general outline on relevant points.

7.3 Is there any regulation of the price or terms of service inthe LNG sector?

Where a petroleum product is sold to the public, its price will fallunder a scale fixed by the Government and readjusted from time totime. For regulations on trading of LPG, please refer to questions5.1 – 5.6 above.

7.4 Outline any third-party access regime/rights in respect ofLNG Facilities.

There are no specific regulations on this issue in Vietnam at present.

8 Competition

8.1 Which Governmental authority or authorities areresponsible for the regulation of competition aspects, oranti-competitive practices, in the natural gas sector?

The authority responsible for the regulation of competition aspectsis the Competition Council, who is responsible for every sector,including the gas sector.

8.2 zTo what criteria does the regulator have regard indetermining whether conduct is anti-competitive?

The Competition Law 2004 specifies a number of criteria of an anti-competitive conduct:

A. Agreements in restraint of competition

1. agreements either directly or indirectly fixing the price ofgoods and services;

2. agreements to share consumer markets or sources of supplyof goods and services;

3. agreements to restrain or control the quantity or volume ofgoods and services produced, purchased or sold;

4. agreements to restrain technical or technologicaldevelopments or to restrain investment;

5. agreements to impose on other enterprises conditions forsigning contracts for the purchase and sale of goods andservices or to force other enterprises to accept obligationswhich are not related in a direct way to the subject matter ofthe contract;

6. agreements which prevent, impede or do not allow otherenterprises to participate in the market or to developbusiness;

7. agreements which exclude from the market other enterpriseswhich are not parties to the agreement; and

8. collusion in order for one or more parties to win a tender forsupply of goods and services.

The agreements at points 1, 2, 3, 4 and 5 above are prohibited whenthe parties to the agreement have a combined market share of thirty(30) per cent or more of the relevant market. The remaining pointsare prohibited irrespective of the market share of participants.

B. Abuse of dominant market position

A group of enterprises shall be deemed to be in a dominant marketposition if they act together in order to restrain competition and fallinto one of the following categories:

(a) 2 enterprises have a market share of fifty (50) percent ormore in the relevant market;

(b) 3 enterprises have a market share of sixty five (65) percent ormore in the relevant market; and

(c) 4 enterprises have a market share of seventy five (75) percentor more in the relevant market.

Any enterprise or group of enterprises in a dominant marketposition shall be prohibited from carrying out the followingpractices:

1. selling goods or providing services below total prime cost ofthe goods aimed at excluding competitors;

2. fixing an unreasonable selling or purchasing price or fixing aminimum re-selling price goods or services, thereby causingloss to customers;

3. restraining production or distribution of goods or services,limiting the market, or impeding technical or technologicaldevelopment, thereby causing loss to customers;

4. applying different commercial conditions to the sametransactions aimed at creating inequality in competition;

5. imposing conditions on other enterprises signing contractsfor the purchase and sale of goods and services or forcingother enterprises to agree to obligations which are not relatedin a direct way to the subject matter of the contract; and

6. preventing market participation by new competitors.

Any enterprise in a monopoly position shall be prohibited fromcarrying out the following practices:

1. practices mentioned above applied for enterprise or group ofenterprises in a dominant market position;

2. imposing disadvantageous conditions on customers; and

3. abuse of monopoly position in order to change or cancelunilaterally a signed contract without legitimate reason.

8.3 What power or authority does the regulator have topreclude or take action in relation to anti-competitivepractices?

The Competition Council is equipped with the following powers topreclude and take action in relation to anti-competitive practices:

(a) to control the process of economic concentration (i.e.mergers, joint ventures, etc.) in accordance with this Law;

(b) to accept jurisdiction over files for request of exemption; to

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forward its opinion to the Minister of Trade for a decision orto submit the same to the Prime Minister for his decision;

(c) to investigate competition cases concerning practices inrestraint of competition and unfair competitive practices;

(d) to deal with and impose fines in respect of unfair competitivepractices; and

(e) to fulfil other duties in accordance with law.

8.4 Does the regulator (or any other Government authority)have the power to approve/disapprove mergers or otherchanges in control over businesses in the natural gassector, or proposed acquisitions of development assets,transportation or associated infrastructure or distributionassets? If so, what criteria and procedures are applied?How long does it typically take to obtain a decisionapproving or disapproving the transaction?

In the case where enterprises participating in an economicconcentration have a combined market share in the relevant marketof from thirty (30) percent to fifty (50) percent, the legalrepresentative of such enterprises must notify the administrativebody for competition prior to carrying out the economicconcentration. The procedure is as follows:

1. A file for notification of an economic concentration

2. Acceptance of jurisdiction over file for notification of

economic concentration (within seven working days from

the date of receipt)

3. Reply to notification of economic concentration

The administrative body for competition shall be responsible,within a time limit of forty five (45) days from the date of receiptof a complete file for notification of an economic concentration, toprovide a written reply to the enterprise which submitted the file.The written reply of the administrative body for competition mustconfirm that the economic concentration belongs to one of thefollowing categories:

(a) the economic concentration does not fall within theprohibited category; and

(b) the economic concentration is prohibited because theenterprises participating in the economic concentration havea combined market share in the relevant market of more thanfifty (50) percent.

4. Carrying out economic concentrations

The legal representative of enterprises participating in an economicconcentration in the category required to provide notification statedabove may conduct procedures for the economic concentration atthe authorised State body in accordance with the laws onenterprises, only after having received a written reply from theadministrative body for competition that the economicconcentration is not within the prohibited category.

9 Foreign Investment and International Obligations

9.1 Are there any special requirements or limitations onacquisitions of interests in the natural gas sector (whetherdevelopment, transportation or associated infrastructure,distribution or other) by foreign companies?

The Petroleum Law only applies to Petroleum exploration andproduction activities carried out within the territory, the exclusiveeconomic zone and the continental shelf. Within this scope ofoperations, foreign investors can only carry out activities under apetroleum contract that may be signed in the form of a production-

sharing contract, joint-venture contract or other contractual forms.But since Decree 48/2000/NĐ-CP only sets forth a modelproduction-sharing contract, it means that this kind of contract is apreference one, and this fits the international practice in the sector.To date, only one incorporated joint venture was created byVietnam and Russia (Vietsovpetro).

For other activities related to petroleum, such as refining,transmission and distribution and trading, the investment andcompany legislations will apply.

Any restrictions on foreign ownership stakes in a given sector arebased on Vietnam’s WTO service sector commitments thatgenerally follow a phased-in approach over time. In any event,Vietnam’s Government has discretion to grant foreign ownership inexcess of such commitments.

9.2 To what extent is regulatory policy in respect of thenatural gas sector influenced or affected by internationaltreaties or other multinational arrangements?

Principle of non-discrimination features prominently in GATT andGATS, to which Vietnam is an official member:

National Treatment (Art. 3): Equal treatment for foreign anddomestic individuals and companies.

Most Favoured Nation (Art. 4): Equal treatment for nationalsof all trading partners in the WTO.

Minimum protection by WTO is normally widened by bilateralagreements, for instance the Vietnam – US BTA provides a fullermechanism of protection:

Principle of National Treatment (Art. 3): Each Party shallaccord to nationals of the other Party treatment no lessfavourable than it accords to its own nationals with regard[…] intellectual property rights.

Principle of Fair and Equitable Treatment (Art. 11): ensurethat enforcement procedures of IP rights are notunnecessarily complicated or costly, and do not entailunreasonable time limits or unwarranted delays.

10 Dispute Resolution

10.1 Provide a brief overview of compulsory dispute resolutionprocedures (statutory or otherwise) applying to the naturalgas sector (if any), including procedures applying in thecontext of disputes between the applicable Governmentauthority/regulator and: participants in relation to naturalgas development; transportation pipeline and associatedinfrastructure owners or users in relation to thetransportation, processing or storage of natural gas; anddistribution network owners or users in relation to thedistribution/transmission of natural gas.

The Model Contract encourages parties to the Petroleum Contractto submit their dispute to London Petroleum Institute. In practice,PetroVietnam and contractors prefer to address their dispute to theSingapore International Arbitration Center (SIAC).

If the dispute is between contractors and a Government authority,contractors must address their appeal to decisions firstly to the headof such Governmental body, or if the decision is made by such head,to the body in the next higher hierarchy. If all appeals areunsuccessful, then contractors can lodge a claim to the court torequest review of the court over decisions made by Governmentauthority.

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10.2 Is Vietnam a signatory to, and has it duly ratified intodomestic legislation: the New York Convention on theRecognition and Enforcement of Foreign Arbitral Awards;and/or the Convention on the Settlement of InvestmentDisputes between States and Nationals of Other States(“ICSID”)?

Vietnam is a signatory to both the New York Convention on theRecognition and Enforcement of Foreign Arbitral Awards andICSID. As Vietnam elects the unilateralism model in treaty law, atreaty is effective and binding from date of signature of theGovernment without any requirement for a legislative body toratify.

10.3 Is there any special difficulty (whether as a matter of lawor practice) in litigating, or seeking to enforce judgmentsor awards, against Government authorities or Stateorgans (including any immunity)?

With respect to domestic awards or judgments, special difficultiesarise in practice considering question marks over the independenceof the judiciary in Vietnam and power of State organs in particularto influence decisions. With regards to offshore cases, enforcingforeign court judgments in Vietnam is all but impossible due to anabsence of judicial recognition treaties for the vast majority ofcountries. Foreign arbitral awards may be enforced in theory but,again, enforcement in practice is likely to be cumbersome and time-consuming. As with other countries, Vietnamese courts may baseon public policy to refuse recognition of foreign judgments orawards.

Endnotes

Endnote 1

Proven Reserves

(Source: BP Statistical Review of World Energy, 2010)

10.4 Have there been instances in the natural gas sector whenforeign corporations have successfully obtainedjudgments or awards against Government authorities orState organs pursuant to litigation before domesticcourts?

Court cases are generally not publicised in Vietnam. However, it isunlikely that any foreign entities have obtained judgment againstGovernment authorities pursuant to litigation before domesticcourts to date.

11 Updates

11.1 Please provide, in no more than 300 words, a summary ofany new cases, trends and developments in GasRegulation Law in Vietnam.

In terms of Vietnam’s long term policy strategy, there are two keyregulations governing master plan on oil and gas of Vietnam:

(i) Decision No. 386/QD-TTg, dated 9 March 2006, of thePrime Minister approving strategy for development of oiland gas sector until 2015, vision to 2025; and

(ii) Decision No. 233/QD-TTg, dated 18 February 2009, of thePrime Minister approving master plan for development of oiland gas sector until 2015, vision to 2025.

Unfortunately, the content of such documents are not readily madepublic. Predictions about Vietnam’s long-term strategy regardinggas development - especially questions of State monopoly vs.privatisation and of competitive market prices - are thus hard tomake. It should be clear, however, that Vietnam will increasinglyhave to rely on gas imports to meet its increasing domestic demand.

At end 2009

At end 1989

Trillion

cubic

metres

At end 1999

Trillion

cubic

metres

At end 2008

Trillion

cubic

metres

Trillion

cubic

feet

Trillion

cubic

metres

Share

of total

R/P

ratio

Indonesia 2.55 2.62 3.18 112.5 3.18 1.7% 44.3

Malaysia 1.61 2.48 2.38 84.1 2.38 1.3% 38.0

Myanmar 0.27 0.29 0.57 20.1 0.57 0.3% 49.4

Pakistan 0.65 0.70 0.84 32.0 0.91 0.5% 23.9

Papua New Guinea 0.23 0.43 0.44 15.6 0.44 0.2% *

Thailand 0.23 0.35 0.34 12.7 0.36 0.2% 11.6

Vietnam _ 0.17 0.56 24.1 0.68 0.4% 85.2

Other Asia Pacific 0.26 0.34 0.36 12.9 0.36 0.2% 20.9

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Endnote 3

Vietnam annual gas production


Endnote 2

Production*

(Source: BP Statistical Review of World Energy, 2010)

Billion cubic meters 2005 2006 2007 2008 2009Change 2009 over

20082009 share of total

Indonesia 71.2 70.3 67.6 69.7 71.9 3.5% 2.4%

Malaysia 61.1 63.3 64.6 64.9 62.7 -3.3% 2.1%

Myanmar 12.2 12.6 13.5 12.4 11.5 -6.7% 0.4%

Pakistan 3.6 3.7 4.1 3.8 4.0 4.4% 0.1%

Papua New Guinea 35.5 36.1 36.8 37.5 37.9 1.3% 1.3%

Thailand 23.7 24.3 26.0 28.8 30.9 7.6% 1.0%

Vietnam 6.9 6.8 7.1 7.9 8.0 1.0% 0.3%

Other Asia Pacific 7.0 10.1 12.5 13.7 13.6 0.4% 0.5%

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Giles Cooper

Duane Morris Vietnam LLCUnit V1307/1308, 13th Flor83B Ly Thuong Kiet StreetHoan Kiem District, HanoiVietnam

Tel: +84 8 3824 0231Fax: +84 4 3946 1311Email: [email protected] URL: www.duanemorris.co.uk

Giles Cooper practices in the area of corporate law with a focuson international law in Southeast Asia. Mr. Cooper hasexperience with foreign investment and commercial law related toconstruction, mergers and acquisitions, securities, contractnegotiation and drafting, banking and finance, and employmentlaw. Mr. Cooper is a graduate of Victoria University in Wellington, NewZealand, and a graduate of the University of Canterbury inChristchurch, New Zealand. He is a barrister and solicitor of theHigh Court of New Zealand and a registered foreign lawyer inVietnam.

Areas of Practice:

International Commercial and Corporate Law

Construction Law

Securities and capital markets

Labour and Employment Law

Major projects

Education:

University of Victoria, Institute of Professional Legal

Studies, Certificate of Professional Practice, 1998

University of Canterbury (Christchurch, New Zealand),

LL.B. (Hons), 1996

Oliver Massmann

Duane Morris Vietnam LLCUnit V1307/1308, 13th Flor83B Ly Thuong Kiet StreetHoan Kiem District, HanoiVietnam

Tel: +84 4 3946 2205Fax: +84 4 3946 1311Email: [email protected] URL: www.duanemorris.co.uk

Oliver Massmann practices in the area of corporate internationaltaxation and on power/water projects, matters related to oil andgas companies and telecoms, privatisation and equitisation,mergers and acquisitions, and general commercial matters formultinational clients in relation to investment and doing businessin Vietnam.Mr. Massmann is the only foreign lawyer in Vietnam who ispresenting to the NationalAssembly of Vietnam in Vietnamese language and teachingInternational law in Vietnameselanguage at the Ministry of Justice in Hanoi.Mr. Massmann is a 1994 graduate of Bochum Law University, firststate exam and Ministry ofJustice, Duesseldorf Germany, second state exam 1997. He isadmitted to the Bar Association in Berlin and a licensed foreignlawyer in Vietnam.

Duane Morris LLP, a full-service law firm of more than 650 attorneys, offers innovative solutions across diverse industries in theUnited States and internationally to address the legal and business challenges of today’s evolving global markets . Throughout itsmore than 100-year history, Duane Morris has fostered a collegial culture, where lawyers work with each other to better serve theirclients Lawyers who are leaders in a range of legal disciplines and have diverse backgrounds join Duane Morris in order to usethe latest technology, professional support staff and other resources in pursuit of clients’ goals.

Growth and Culture

Evolving from a partnership of prominent lawyers in Philadelphia more than a century ago, Duane Morris now has offices in manymajor markets and continues to expand across the country and overseas. Throughout this expansion, Duane Morris remainscommitted to preserving the collegial culture that has attracted so many talented attorneys. The firm’s leadership believes thisculture is truly unique among large law firms, and that outstanding legal work is best accomplished by skilled professionals whorespect each other and work well together.

Leadership and Experience

Duane Morris lawyers hold leadership positions in bar associations, as well as in educational, cultural and charitable organisationsand with community groups across the country. Many of the firm’s attorneys come to Duane Morris after having held seniorpositions in government agencies and large corporations. This range of experience is further enriched by the diverse backgroundsof the firm’s attorneys. Duane Morris has long been committed to recruiting, retaining and promoting talented female and minoritylawyers, many of whom hold leadership roles at the firm.

Technology and Infrastructure

Trade publications have placed Duane Morris in the upper echelon of firms in terms of utilizing technology. Hundreds of lawyersworking around the globe quickly communicate and collaborate using the firm’s integrated computer network, accessingsophisticated research software, information-rich databases, and other knowledge-sharing tools. Duane Morris’ clients alsobenefit from the contributions of professional-level support staff who maintain the firm’s technological and administrativeinfrastructure and enable lawyers to focus on providing valuable counsel and service to their clients.

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