National Assembly Deputies working in the oil sector raised these expectations at a seminar on the draft of the revised Petroleum Law.

Citing problems in the oil and gas exploitation activities, Hoang Ngoc Trung, deputy CEO of PVEP (PetroVietnam Exploration Production Corporation), said in 2016-2021 the investment scale of the sector was just equal to 15 percent of five years.

In the last six years, the corporation only signed two projects, a low figure if noting that 27 projects were inked in the previous period. Meanwhile, this is a special industry with high risks and a low success rate of just 15 percent, and there is no risk handling mechanism.

He strongly recommended that the amended law reform procedures and include an investment encouragement mechanism to attract investors and create economic benefits.

“With new investment incentives and regulations, projects can be put into development and exploitation soon. Of course, risks will still exist but it will be possible to increase the exploitation reserves by 70-80 million barrels which bring revenue of $1-1.5 billion,” Trung said.

Regarding projects that are about to end and enter the full utilization and full collection period, Trung suggested that the Prime Minister should be allowed to determine higher preferential tax remissions than in the draft. This would be applied to block and oil fields that need to realize full-exploitation activities so as to avoid waste of natural resources.  

He also proposed diversification of the form of oil and gas contracts, saying that more forms are needed under the principle of mutual benefit for the government and investors.

In addition, there should be a policy that encourages contractors of existing petroleum contracts to make additional investments to increase reserves, raise the recovery coefficient, and conduct full exploitation.

Regarding human resources, Trung pointed out difficulties caused by the brain drain as many good specialists have left because of bad pay and working conditions.

“There are many problems that we cannot solve as a state-owned enterprise. In some cases, we really want to retain good specialists, but we cannot. In other cases, we have no other solution to ask workers to leave if they don’t want to work,” he complained.

Meanwhile, Deputy CEO of PTSC (Petro Vietnam Technical Services Corporation) Tran Ho Bac suggested that there should be regulations on the domestic proportions to ensure territorial sovereignty protection, because this is a special business field.

“Twenty years ago, we had to hire many foreign workers, from specialists to sailors. But we have localized workers. Our aspiration is going to the open sea and obtain revenue in dollars overseas,” Bac said about the domestic workforce.

Le Dac Hoa, Project Director of Blocks 01, 02 (PVEP), said he hopes the Petroleum Law is like a "princess that awakes the beautiful sleeping oil and gas princess", especially in the field of oil and gas exploration and exploitation.

Citing the exploitation at Blocks 01 and 02 in 1991, Hoa said to date no regulation in the Petroleum Law exists to solve the problems arising there. For example, there is no provision about mine cleanup costs.

In the case of Petronas giving back oil fields to Vietnam, the mine cleanup costs reached $200 million by 2020.

As for the revision of the draft Petroleum Law (amended) at the legislative session in August, the National Assembly Standing Committee drew attention to the simplification of investment and the design of policies that would attract investment from economic sectors, and domestic and foreign financial institutions.

Thu Hang