Resource information
The oil and gas potential of
Vietnam's continental shelf remains relatively
unexplored compared with that of its neighbors, including
China, Indonesia, Malaysia, and Thailand. A number of
factors affect the decision to undertake petroleum
investments: geology, geography, geopolitics, and investment
climate. Host governments cannot control the first three
factors. However, they do control the investment climate,
and the legal and contractual framework and the petroleum
fiscal system are key factors to be considered in the
competition among governments for access to investment
capital. Despite intense efforts to attract international
oil companies to explore the country's sedimentary
basins, including incentive terms contained in a 1998
decision of the prime minister, drilling activity has
remained modest in recent years. The government requested
technical assistance from ESMAP for revision of its
petroleum legal regime so that it might become a modern
legal and regulatory framework for the petroleum sector and
attract foreign investment to develop its hydrocarbon
reserves. The project team evaluated and identified
international best practice in the areas of petroleum
regimes to develop its recommendations to Vietnam. They
recommended strengthening of the legal, regulatory, and
contractual framework based on three cornerstones: the
Petroleum Law, the Regulations (or, as they are called in
Vietnam, the Decrees), and a Model Contract based on
production-sharing agreements. Recommendations were provided
to the government of Vietnam in a series of meetings,
workshops, and reports.
