Laws of Vietnam

DECREES:

Article 1.- To promulgate the Decree ratifying the Statute on the Organization and Operation of the Vietnam Oil and Gas Corporation attached to this Decree.

Article 2.- The Minister of Finance, the Minister-Chairman of the Government Commission on Organization and Personnel, the Governor of the State Bank of Vietnam, and the Ministers, the Heads of the relevant ministerial-level agencies and agencies attached to the Government shall base themselves on this Statute to guide the implementation.

Article 3.- This Decree takes effect from the date of its promulgation.

The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People's Committees of the provinces and cities directly under the Central Government, the Managing Board and the General Director of the Vietnam Oil and Gas Corporation shall have to implement this Decree.

On behalf of the Government

The Prime Minister

GENERAL PROVISIONS

Article 1.- The Vietnam Oil and Gas Corporation is a State corporation established by decision of the Prime Minister. Its members are independent-accounting enterprises, dependent-accounting enterprises, and non-business units of the oil and gas industry closely related to one another in economic interests, finance, technology, supply, consumption, service, information, training, research and marketing.

Article 2.- The Vietnam Oil and Gas Corporation (hereafter referred to as Corporation) has the task of conducting research, prospection, exploration, exploitation, processing, storing, transportation and providing services in oil and gas; importing and exporting oil and gas material and equipment, oil and gas, crude oil, and oil products; circulating oil products, and conducting other business activities prescribed by law and other tasks assigned by the State.

The Corporation is authorized to conduct oil and gas activities on the whole land and territorial waters, the exclusive economic zone, the continental shelf and offshore islands of the Socialist Republic of Vietnam and can conduct such activities abroad when permitted by the Government. All activities in the prospection, exploration and exploitation of oil and gas by the other organizations and individuals can be conducted only on the basis of contracts signed with the Vietnam Oil and Gas Corporation.

Article 3.- The Corporation has:

- The legal person status under Vietnamese law;

- Its statute on organization and operation, its managerial and operational apparatus;

- Its own capital and property, and takes responsibility for the debts within the limit of the capital managed by the Corporation;

- Its own seal and can open its accounts at the State Treasury and the banks inside and outside the country;

- Its own balance of assets and centralized funds as prescribed by the Government and directed by the Ministry of Finance.

Article 4.- The Corporation adopts its international transaction name of VIETNAM OIL AND GAS CORPORATION or PETROVIETNAM in abbreviation. The main office of the Corporation is located in Hanoi City.

Article 5.- The Corporation is managed by a Managing Board and directed by a General Director.

Article 6.- The organization of the Communist Party in the Corporation shall operate according to the Constitution and the law of the State of the Socialist Republic of Vietnam and other regulations of the Party.

The trade union and other political-social organizations in the Corporation operate according to the Constitution and the law.

Chapter II

RIGHTS AND DUTIES OF THE CORPORATION

Section I. RIGHTS OF THE CORPORATION

1. The Corporation has the right to manage and use its capital and the land, sea areas and other natural resources and sources entrusted by the State according to the law in order to carry out the socio-economic development strategy assigned to the Corporation by the State in each period.

2. The Corporation has the right to reassign to its member units for management and use of the sources which it has received from the State, and to readjust the sources assigned to its member units in necessary cases and in line with the common development plan of the entire Corporation.

3. The Corporation is entitled to invest, enter into cooperation or joint venture, contribute stocks, and buy part or the whole property of another or other enterprises as prescribed by law.

4. The Corporation is entitled to assign, rent, mortgage and pawn property under its management, except the important equipment and workshops which, by prescription of the Government, must have the permission of the authorized State agency and on the principle of preserving and developing the capital. Such an assignment, renting, mortgage and pawning must be done according to the prescriptions of law with regard to the land, sea areas and resources under the Corporation's management.

Article 8.- The Corporation has the following rights in the organization of management and business:

1. To organize the managerial apparatus and organize business in conformity with the objective and tasks assigned by the State;

2. To renew technology and equipment;

3. To set up branches and representative offices of the Corporation in the country and abroad as prescribed by law;

4. To conduct business in such trades and occupations as suit the objectives and tasks assigned by the State; to broaden the scope of business according to the capabilities of the Corporation and market demand;

5. To select its own market and to conduct import and export according to prescriptions of the State;

6. To decide itself the buying and selling prices of its products and business services, except those products and services of which the prices are set by the State;

7. To work out and apply the norms for labor, materials, unit prices of wages per unit of product in the framework of the norms and unit prices set by the State;

8. To recruit, hire, assign, employ and train labor, select the forms of wage and bonus payment, and exercise other rights of the employer as provided for by the Labor Code and other prescriptions of law; to decide the wages and bonuses for the laborers on the basis of the unit prices of wage per unit of product, or the service fees and effectiveness of the operations of the Corporation;

9. To invite foreign delegations and send delegations or individuals abroad to work, study, and research, except for the President of the Managing Board and the General Director who must get the permission of the Prime Minister. The sending of other members of the Managing Board for visits abroad shall be decided by the President of the Managing Board. The sending abroad of the Deputy General Directors and other persons in the assisting apparatus shall be decided by the General Director.

Article 9.- The Corporation has the following powers in financial management:

1. To use the capital and the various funds of the Corporation to meet in time the business requirements on the principle of preservation and repayment;

2. To mobilize capital of its own for business activities but without changing the form of ownership; to issue bonds as defined by law; to mortgage the land use right associated with the property under the management of the Corporation at the Vietnamese banks in order to borrow capital for business according to prescriptions of law;

3. To set up, manage and use the centralized funds and the capital depreciation fund at the level and rate of deduction, and under the regime of utilization and management of these funds stipulated in the financial statute of the Corporation;

4. The Corporations may use the remaining profits after fulfilling all obligations toward to the State to set up development investment funds and other funds as prescribed, in order to distribute to the laborers according to the contribution of each to the business results in the year, and according to the shares they have contributed;

5. The Corporation is entitled to the regime of the subsidies, price subsidies and other preferential regimes of the State when performing its production or supply tasks in service of defense and security, and the prevention and fight against natural calamities, or in service of public interests or in the supply of products and services in accordance with the price policy of the State which cannot make up for the production cost or service cost which the Corporation has spent on these products and services;

6. The Corporation is entitled to the investment or reinvestment preferential regime as prescribed by the State.

Article 10.- The Corporation may refuse and denounce all requests for resource supply not stipulated by law by any individual or organization, except the voluntary contributions for humanitarian purposes and public interest.

Section II. OBLIGATIONS OF THE CORPORATION

1. The Corporation has the duty to receive and effectively use, maintain and develop the capital allocated by the State including the part of the capital invested in other enterprises and accept and effectively use the natural resources including land, sea areas and other sources assigned by the State with a view to achieving the business objective and other special tasks assigned by the State.

2. The Corporation has the obligation to pay:

- The debts recorded in the property balance of the Corporation at the time of its establishment.

- The international credits received by the Corporation with the accreditation of the Government.

- The credits directly borrowed by the Corporation or borrowed for its member units under trust contracts.

Article 12.- The Corporation has the following tasks in managing its business operations:

1. To register for business and conduct its business in accordance with the registration. To take responsibility before the State for the results of its operations and before the customers and law for its products and services;

2. To elaborate its development strategy, its five-year and annual plans, its plans for the allocation of lots and the regional planning for the purpose of management, defense and exploitation of the oil and gas resources in conformity with the tasks assigned to it by the State and the demand of the market;

3. To carry out the economic contracts signed with its partners, to sign contracts on oil and gas activities with the contractors according to its jurisdiction and to organize the supervision of the execution of the signed contracts;

4. To renew and modernize the technology and mode of management; to use the income generated by the assignment of property to re-invest, renew the equipment and technology of the Corporation;

5. To perform its obligations toward the laborers as prescribed by the Labor Code, and ensure the participation of the laborers in the management of the Corporation;

6. To carry out the regulations of the State with regard to the protection of natural resources and the environment, national defense and security;

7. To abide by the regime of statistical reporting and periodical reporting as prescribed by the State, and also the regime of irregular reporting at the request of the representative of the owner, and take responsibility for the accuracy of the reports;

8. To submit to the control of the representative of the owner; to abide by the regulations concerning the inspection by the financial agency and other authorized State agencies as prescribed by law.

1. The Corporation has the duty to correctly carry out the regime and other regulations on the management of capital, property, the various funds, book-keeping, cost accounting, the audit regime and other regimes prescribed by the State; and to take responsibility for the accuracy of its financial operations.

2. The Corporation has the duty to make public its annual financial reports and other information so that a correct and objective evaluation can be made of its operations as prescribed by the Government.

3. The Corporation shall have to perform its duty of tax payment and make other remittances to the State budget as prescribed by law.

Chapter III

THE MANAGING BOARD, THE CONTROL COMMISSION

1. The Managing Board performs its function of managing the operations of the Corporation and take responsibility before the Government for the development of the Corporation in accordance with the tasks assigned by the State.

2. The Managing Board has the following powers and tasks:

a/ To receive capital (including debts), land, sea areas, natural resources and other sources assigned to the Corporation by the State;

b/ To examine and approve the plans proposed by the General Director concerning the allocation of capital and other resources to the member units, and the plan for the regulation of capital and other resources among the member units, to control and supervise the realization of these plans;

c/ To control and supervise all activities of the Corporation, and the utilization, preservation and development of the capital and other sources assigned, and also the realization of the resolutions and decisions of the Managing Board and the regulations of law, and the discharge of the obligations toward the State;

d/ To adopt the proposals of the General Director to be submitted to the Prime Minister for ratification concerning the strategy, planning and plan for long-term development, the five-year plans of the Corporation; adopt the allocation of lots, the regional planning for the purpose of managing, defending and exploiting the oil and gas resources; decide the annual plan of the Corporation so that the General Director may assign it to the member units;

e/ To organize the ratification and examination and submit to the authorized agency for adoption of the plans of investment, new investment projects, projects of investment in cooperation with foreign parties with capital managed by the Corporation;

f/ To submit to the Prime Minister for approval, and in case of accreditation by the Prime Minister, to decide the joint venture projects with foreign countries as provided for by the Government; to decide the joint venture projects in the country and other economic contracts of great value. To submit to the Prime Minister for approval the investment in the projects of Group A. It is empowered by the Prime Minister to decide the projects of Groups B and C. It empowers the General Director or the Directors of member units to approve the small investment projects. It ratifies the plan for organizing the management and business activities of the Corporation presented by the General Director. It may propose the establishment, splitting, merger or dissolution of member units as prescribed by law. It coordinates with the local authorities in the protection of its property;

g/ The Corporation issues and supervises the implementation of the economic and technical norms and criteria, including unit price of wages, unit prices and norms in specialized construction, product criteria, trade marks, prices of oil and gas products and services within the Corporation at the proposal of the General Director and on the basis of the common regulations of the branch and of the country;

h/ To work out and submit to the Prime Minister for approval the Statute and the amendments and supplements to the Statute on organization and operation of the Corporation. To approve the statutes and the regulations on organization and operation as well as the regulations on financial operations of the member units and the amendments or supplements to these statutes and regulations at the proposal of the General Director. It can decide to open branches and representative offices of the Corporation in the country and abroad in accordance with the procedures defined by law;

i/ With regard to the personnel in the managerial and operational apparatus of the Corporation:

- It shall decide the total personnel of the managerial and operational apparatus of the Corporation and may readjust it when necessary at the proposal of the General Director.

- It may propose the Minister-Chairman of the Government Commission on Organization and Personnel to submit to the Prime Minister for decision to appoint, dismiss, commend or discipline the General Director.

- It may propose the Minister-Chairman of the Government Commission on Organization and Personnel to appoint, dismiss, commend or discipline the Deputy General Directors and the Chief Accountant of the Corporation at the proposal of the General Director of the Corporation.

- It may appoint, dismiss, commend or discipline the Directors of the member units at the proposal of the General Director.

- It may appoint, dismiss, commend or discipline the persons directly managing the capital of the Corporation at the enterprises where the Corporation has invested.

j/ It may adopt the plan proposed by the General Director concerning the founding and utilization of the centralized funds corresponding with the business and financial plans of the Corporation, and in conformity with the financial regulations of the Corporation.

k/ It may examine the plans of the member units for capital mobilization (in all forms) guaranteed borrowings, liquidation of property to decide or submit to the Prime Minister for decision according to the principles mentioned in Item 4, Article 37 of this Statute.

l/ To adopt the quarterly, six-month and annual operational report of the Corporation and the annual synthetic financial report (including the property balance) of the Corporation and the member units presented by the General Director, and request the General Director to make public the annual financial report as prescribed by the Ministry of Finance.

3. The Managing Board comprises 7 members to be appointed and dismissed by the Prime Minister at the proposal of the Minister-Chairman of the Government Commission on Organization and Personnel. The criteria of the persons to be nominated as members of the Managing Board shall comply with the provisions in Article 32 of the Law on State Enterprises.

The Managing Board shall comprise a number of full-time members, including the President of the Board, a member who is also General Director, a member who is also Chairman of the Control Commission, and a number of half-time members who are specialists operating in the domain of oil and gas, economy, finance, business management and law.

The President of the Managing Board must not be also General Director of the Corporation.

4. The term of office of the members of the Managing Board is five (5) years. A member of the Managing Board may be re-appointed. He/she may also be dismissed and replaced in the following cases:

- When there is sign of his/her law-breaking, or violation of the Statute of the Corporation.

- He/she has proved to be incapable of assuming the task assigned, as suggested by at least two thirds of the incumbent members.

- He/she asks to withdraw.

- There is a decision to assign them to another task.

5. The President of the Managing Board has the duty to organize the implementation of the tasks and powers of the Board stipulated in Item 2 of this Article.

6. Working regime of the Managing Board:

a/ The Managing Board shall adopt the system of collective work. It shall meet regularly every quarter to examine and decide questions under its jurisdiction and responsibility. When necessary, it can convene extraordinary meetings to resolve urgent questions of the Corporation at the proposal of the President of the Managing Board, or the General Director, or more than 50% of members of the Managing Board.

b/ The President of the Managing Board shall convene and preside over all the meetings of the Board. When he cannot be present by force majeure, he shall empower a member in the Board to chair the meeting on his behalf.

c/ The meetings of the Managing Board shall be valid only when at least two thirds of the members are present. The documents to be discussed at the meetings must be sent to all the members of the Board and the invited persons at least five (5) days in advance. The contents and conclusions of the meetings of the Managing Board must be recorded in written minutes to which all the members present at the meetings must affix their signatures. Any resolution or decision of the Managing Board shall be valid only when they receive the approval by vote of more than 50% of the members of the Board. A member of the Managing Board may have his or her reservations about the resolutions or decisions.

d/ When the Managing Board meets to examine questions related to the development strategy, the planning and the five-year and annual plans, the major investment projects, the projects of joint venture with foreign countries, the annual financial reports, the systems of economic, or the technical norms and criteria of the Corporation, it must invite the authorized representatives of the concerned ministries and branches. In case the meeting deals with an important question related to the local administration, it must invite the representative of the People's Committee at the provincial level. In case the issue relates to the interests and obligations of the laborers in the Corporation, the President of the Managing Board shall have to invite a representative of the Trade Union of the oil and gas service. These representatives may speak but do not take part in the voting. When they discover that the resolutions or decisions of the Managing Board are damaging the common interests, they may send a written petition to the Managing Board and at the same time report to the head of the agencies of which they represent so that they may examine and settle the question according to their competence. If necessary, the Heads of these agencies may report the question to the Prime Minister.

e/ The resolutions and decisions of the Managing Board are binding on the whole Corporation. In case the opinion of the General Director differs from the resolution or decision of the Managing Board, the General Director may express his reservations and submit it to the authorized State agency for settlement. Pending the resolution of the authorized State agency, he still has to abide by the resolution and decision of the Managing Board.

f/ The operational expenditures of the Managing Board including wages and allowances shall be accounted for in the managerial fees of the Corporation. The General Director shall have to assure the necessary conditions and means for the operation of the Managing Board.

Article 15.- Assisting body of the Managing Board:

1. The Managing Board uses the operational apparatus and the seal of the Corporation to carry out its tasks.

2. The Managing Board is assisted by from 5 to 7 specialists who work on a full-time basis.

3. The Managing Board shall set up the Control Commission to help it in the inspection and supervision of the operational activities of the General Director, the apparatus of the Corporation and the member units of the Corporation in their financial activities, in the observance of the Statute of the Corporation and the resolutions and decisions of the Managing Board, and in the observance of law.

The operational expenditures, including wages and allowance to the Control Commission shall be accounted for in the operational expenditures of the Managing Board. The General Director shall have to ensure the working conditions for the Control Commission in accordance with the regulations of the Managing Board.

Article 16.- Interests and responsibilities of the members of the Managing Board:

1. The full-time specialists shall receive their basic wages according to the wage scheme of State employees and their wages according to the regime of wage distribution in a State enterprise as prescribed by the Government, and shall receive bonuses corresponding to the results of the operations of the corporation.

The half-time members shall receive responsibility allowances and bonuses as prescribed by the Government.

2. Members of the Managing Board:

a/ Under no circumstances shall they place themselves in a position that might restrict the development of honesty and public mindedness, or provoke contradictions between the interests of the Corporation and personal interests.

b/ Under no circumstances shall they abuse their powers for personal interests, or take any action of usurping the business opportunities of the Corporation, or damaging the interests of the Corporation.

c/ Under no circumstances shall they take actions beyond the powers of the Managing Board prescribed in this Statute.

3. The members of the Managing Board who are the President of the Board or General Director of the Corporation, are not allowed to set up or hold managerial posts or any other titles in a private enterprise, a limited liability company or a stock company. They are also forbidden to entertain economic contract relations with private enterprises, limited liability companies or stock companies in which their spouses, parents or children hold managing or executive posts.

Their spouses, parents, children and siblings must not hold the posts of chief-accountant or cashier at the Corporation and the member units.

4. The members of the Managing Board shall have to take collective responsibility before the Prime Minister and the law for all its resolutions and decisions. In case they fail to accomplish the tasks assigned, violate the Statute of the Corporation or abuse power to cause damage to the Corporation and the State, they shall have to take responsibility and make material compensations for the damage caused by them as stipulated by law.

Article 17.- The Control Commission:

1. The Control Commission shall comprise four members headed by a member of the Managing Board as assigned by the Board. The three others are appointed and dismissed by the Managing Board: one member is an accountancy specialist, another shall be presented by the congress of workers and employees of the Corporation, and another presented by the Head of the General Department of State Capital and Property Management at the Enterprises.

2. A member of the Control Commission must not have family relations with the General Director, the Deputy General Director or the Chief Accountant of the Corporation, and must not cumulate any other responsibility in the executive apparatus of the Corporation, or any other posts in the other enterprises of the oil and gas industry outside the Oil and Gas Corporation.

3. A member of the Control Commission must:

- Have the university degree in accountancy and audit, or a deep knowledge of the oil and gas technology and of law;

- Have at least five years of experience in the various specialities of the oil and gas industry;

- Have no previous convictions concerning offenses related to economic activities.

4. The term of office of the members of the Control Commission is five years. In the process of work they may be replaced if they fail to accomplish their tasks.

5. The members of the Control Commission shall receive wages and bonuses to be decided by the Managing Board according to the common regime of the State.

Article 18.- Tasks, powers and responsibilities of the Control Commission:

1. To carry out the tasks assigned by the Managing Board in controlling and supervising the executive activities of the General Director, the assistant apparatus and the member units of the Corporation in their financial activities and in their implementation of law, the Statute of the Corporation and the resolutions and decisions of the Managing Board.

2. To report to the Managing Board periodically every quarter and every year and on specific affair concerning the results of its control and supervisory work; to detect and report in time the Managing Board on any irregular activities and signs of law-breaking within the Corporation.

3. Not to disclose the results of control and supervision unless permitted by the Managing Board; to take responsibility before the Managing Board and law for any act of deliberate ignorance or cover-up for the law-breaking acts already detected.

Chapter IV

THE GENERAL DIRECTOR AND THE ASSISTING APPARATUS

1. The General Director shall be appointed and dismissed, commended and disciplined by the Prime Minister at the proposal of the Managing Board and the Minister-Chairman of the Government Commission on Organization and Personnel. The General Director is the legal person representative of the Corporation and takes responsibility before the Managing Board, the Prime Minister and law for directing the operations of the Corporation. The General Director holds the highest executive authority in the Corporation.

2. The Deputy General Director assists the General Director in running one or a number of domains of activity of the Corporation as assigned or empowered by the General Director. He takes responsibility before the General Director and law for the tasks assigned or delegated by the General Director.

3. The Chief Accountant of the Corporation assists the Director General in directing and organizing the conduct of accountancy and statistical work of the Corporation. He has the powers and tasks prescribed by law.

4. The Office and the professional sections or departments shall provide consultancy for and assist the Managing Board and the General Director in managing and directing the operations.

Article 20.- The General Director has the following tasks and powers:

1. Together with the Managing Board, to sign the reception of capital (including debts), land, sea areas, natural resources, and other sources assigned by the State for management and utilization according to the objectives and tasks which the State has assigned to the Corporation. To assign the resources entrusted by the State to the member units of the Corporation according to the plan already ratified by the Managing Board. To suggest to the Managing Board to adjust the capital and other sources when reassigning them to the member units and adjusting them by increasing or decreasing the capital when there is a change in the tasks;

2. To make effective use of and preserve and develop the capital under the plan already ratified by the Managing Board. To work out the plan for capital mobilization, submit it to the Managing Board for approval, and organize the implementation of that plan. To carry out and direct the Financial Company of the Corporation to carry out the capital mobilization and lending in service of the capital need of the Corporation and the member units;

3. To work out the development strategy, the long-term and annual plans, the program of action for the protection and exploitation of oil and gas, projects for new investment and in-depth investment, investment projects in cooperation with foreign countries, the joint venture program, business cooperation of the member units, plans for personnel training within the Corporation, and measures for the realization of economic contracts of major value to submit to the Managing Board for examination and decision, or to the subsequent submission to the authorized State agencies for decision. To organize the realization of the strategy, plans, programs, projects and measures already approved;

4. To work out and submit to the Managing Board for approval the economic and technical norms, product criteria, wage unit price, and the unit prices and norms in specialized construction in accordance with the common regulations of the oil and gas industry and of the State. To organize the implementation and control of the implementation of the these norms, criteria and unit prices within the whole Corporation;

5. To propose to the Managing Board to submit to the Minister-Chairman of the Government Commission on Organization and Personnel to appoint, dismiss, commend and discipline the Deputy General Director and the Chief Accountant of the Corporation; to propose to the Managing Board to appoint, dismiss, commend and discipline the Directors of the member units. To appoint, dismiss, commend, and discipline the Deputy Directors and Chief Accountants of the member units, the Directors of dependent units of the member units and equivalent posts at the proposal of the Directors of the member units. To appoint, dismiss, commend and discipline the Heads and Deputy Heads of the sections or departments and of the Office of the Corporation;

6. To work out and submit to the Managing Board for approval the total personnel of the managing apparatus of the Corporation, and the adjustment plan in case of a change in the organization and personnel of the managing apparatus of the Corporation and of the member units; to establish and personally direct the assisting apparatus; to control the implementation of the decisions on the personnel of the managing apparatuses of the member units; to submit to the Managing Board for approval the statutes, and organizational and operational regulations of the member units elaborated by the Directors of these units; to ratify the plan for establishing, reorganizing and dissolving the dependent units of the member units proposed by the Directors of the member units;

7. To work out and submit to the Managing Board for approval the regulations on labor, wages, commendations and discipline applied within the Corporation;

8. To organize the running of the Corporation's affairs according to the resolutions and decisions of the Managing Board; to report to the Managing Board and the authorized State agencies the results of the business operations of the Corporation, including the quarterly, half-year and annual reports, the general financial report, and the property balance of the Corporation.

The general financial report must be clearly divided into two parts, one concerning the centralized accounting of the Corporation, and the other on the accountings of the independent-accounting member units. It must be submitted to the Managing Board for adoption. The general financial report must be based on the documents already certified by the legal audit agencies;

9. To carry out and control the carrying out by the member units of the tax payment obligation and other payments as prescribed by law and the State. To draw up the plan for distribution of the after-tax profits of the Corporation, and submit it to the Managing Board for approval as provided for by the State;

10. To supply fully all the documents requested by the Managing Board and the Control Commission. To prepare documents for the meetings of the Managing Board;

11. To place itself under the control and supervision of the Managing Board, the Control Commission and the other authorized State agencies in the realization of its executive duties;

12. To have the right to apply measures exceeding his jurisdiction in emergency cases (such as natural calamities, enemy sabotage, fires, accidents), and to take responsibility for his relevant decisions; at the same time, to report immediately to the Managing Board and the authorized State agencies for subsequent solution.

Chapter V

THE COLLECTIVE OF LABORERS IN THE CORPORATION

Article 21.- The Congress of workers and employees of the Corporation is the direct forum for the laborers to take part in the management of the Corporation. The Congress has the following rights:

1. To discuss the elaboration of the collective labor bargain for the representative of the collective of laborers to negotiate and sign it with the General Director;

2. To discuss and adopt the regulations for the utilization of the funds directly related to the interests of the laborers in the Corporation;

3. To discuss and make suggestions to the planning, plan, the evaluation of the result of business management, to propose measures for labor protection and improvement of the working conditions, the material and spiritual living conditions, and the environmental hygiene, as well as to the training and re-training of laborers in the Corporation;

4. To present candidates to the Managing Board and the Control Commission.

Article 22.- The Congress of workers and employees is organized and operates under the guidance of the Vietnam General Confederation of Labor.

Chapter VI

MEMBER UNITS OF THE CORPORATION

1. The Vietnam Oil and Gas Corporation has its member units which are independent-accounting State enterprises (including the Financial Company), the dependent accounting units and non-business units (see list in attached Appendix).

2. The member units of the Corporation have their own seals, are allowed to open their accounts at the banks in conformity with their modes of accounting.

3. The member units of the Corporation which are independent-accounting units and dependent-accounting units shall have their own organization and operating statutes. The non-business units of the corporation shall have their own organizational and operating statutes. These statutes and regulations have to be ratified by the Managing Board in conformity with law and the Statute of the Corporation.

Article 24.- With regard to the member units which are independent accounting units:

1. The independent-accounting State enterprises in the Corporation has the right to business and financial autonomy, is bound in interest and duties to the Corporation according to the regulations in this Statute.

2. The Corporation has the following rights over the members which are independent-accounting enterprises:

a/ To empower the enterprise Director to manage and run the operations of the enterprise in conformity with the Statute of the enterprise already ratified by the Corporation. The director shall take direct responsibility before the Corporation for the activities of his enterprise;

b/ To appoint, dismiss, commend and discipline the Director and Deputy Director(s);

c/ To ratify the plans, to inspect the execution of the plans and the financial statement; to define the level to be deducted for the reward and welfare funds of the enterprise according to the financial statute of the Corporation;

d/ To deduct part of the capital depreciation fund and the after-tax profit according to the financial statute of the Corporation in order to establish centralized funds of the Corporation for use in reinvestment and the execution of the investment projects at the member units;

e/ To ratify the plans and programs for expanded investment and indepth investment, joint venture, retrieval of part of the capital, assignment of stocks under the management of the Corporation held by the various member enterprises;

f/ To regulate the financial sources including foreign exchange reserves among different member units aimed at achieving the highest results of the capital in the whole Corporation, and on the basis of ensuring that the total assets of the enterprises from which part of the capital has been withdrawn shall not be lower than the total debts plus the prescribed capital of the enterprise;

g/ To ratify the forms of wage payment, wage unit price and other measures aimed at ensuring the livelihood and the working conditions for the workers and employees of the enterprise;

h/ To expand or reduce the scope of business operation of the member enterprise under the common development strategy of the Corporation;

i/ To ratify the organizational and operational statutes of the enterprise, including the assignment of the power to the Director of the enterprise with regard to:

- The organization of the managing apparatus of the enterprise;

- Recruitment, commendation, promotion and discipline of workers and employees;

- The level of credits (borrowings, lendings, buyings and sellings with delayed payments);

- Buying and selling of fixed assets, buying and selling of stocks of the stock companies;

- Buying and selling of patents of inventions, innovations and technological transfers;

- Taking part in joint venture units and economic associations;

- Other issues related to the autonomy of a State enterprise as defined by the Law on State Enterprise.

k/ To control the operations of the enterprise, and ask it to report on the financial situation and the results of its business operations.

Article 25.- The members of the Corporation which are independent-accounting enterprises have the right to financial and business autonomy, and take responsibility for the debts and commitments within the capital managed by the enterprise. More concretely:

1. In the development strategy and investment:

a/ The enterprise is assigned or accredited to organize the realization of the development investment projects according to the plan of the Corporation. The enterprise shall be allocated sources by the Corporation to carry out the projects.

b/ The enterprise can invest on its own in the development projects outside the projects directly managed by the Corporation. In this case, it shall mobilize fund by itself and take financial responsibility.

2. In business activities: The enterprise shall draw up and organize the implementation of its own plan on the basis of:

a/ Ensuring the norms, targets and objectives as well as the major balances, the main technical and economic norms (including unit price and prices) of the enterprise in accordance with the common plan of the Corporation.

b/ The plan of business expansion based on the optimum use of all resources in the possession of the enterprise or mobilized by itself in conformity with the needs of the market.

3. In financial operations and economic accounting:

a/ The enterprise shall be assigned part of the capital and resources allocated by the State to the Corporation which is reassigned by the Corporation to the enterprise and decides how to adjust these resources. The enterprise has the duty to preserve and develop the capital and these resources.

b/ The enterprise is entitled to mobilize fund and other credit sources as prescribed by law in order to carry out its business plan and development investment plan.

c/ The enterprise is entitled to establish its own fund for capital construction investment fund, the production expansion fund, the reward fund, the welfare fund, and the financial reserve fund as prescribed by the financial regulations of the Corporation. The enterprise has the duty to deduct its budget to contribute to the centralized funds of the Corporation and is entitled to benefit from these funds as defined in the Statute of the Corporation and the decisions of the Managing Board.

d/ In its capacity as an independent economic legal person, the enterprise shall have to pay taxes and fulfil other financial obligations (if any) to the State as prescribed by law.

e/ The enterprise may be empowered by the Corporation to represent the Corporation in carrying out contracts with customers inside and outside the country on behalf of the corporation.

4. In the domain of organization, personnel and labor:

a/ The enterprise may propose to the Corporation to consider and decide, or it may empowered by the Corporation to establish, reorganize, or dissolve the dependent units, and organize the managing apparatus of the enterprise as defined in the Statute of the Corporation and the enterprise's own statute.

b/ In the framework of the payroll allowed by the Corporation, the enterprise is entitled to recruit and appoint, use or lay off the employees in its managing apparatus. The appointment or dismissal of the posts in the managing apparatus of the enterprise and the dependent units as well as the designing and application of the wage and salary system shall comply with the assignment of power of the Corporation as defined in this Statute.

c/ The enterprise has the right and responsibility to care for the development of the manpower resource in order to ensure the realization of the development strategy and the business tasks of the enterprise; to care for the improvement of the working and living conditions of the laborers according to the Labor Code and the Law on Trade Union.

Article 26.- The members which are dependent accounting units:

1. They are legal persons designated by the Corporation and are bound in obligation and interests to the Corporation. The Corporation takes final responsibility for the financial obligations arising from the commitments of these units;

2. They are entitled to sign economic contracts, take the initiative in undertaking business, financial, organizational and personnel activities as designated or empowered by the Corporation. The powers and tasks of the dependent-accounting units are concritized in their organizational and operational statute ratified by the Managing Board.

Article 27.- The non-business units have their own organizational and operational statutes ratified by the Managing Board. They adopt the regime of covering expenditures with revenues, are entitled to create their own sources of revenues from the carrying out of services, contracts on scientific research and training for units inside and outside the country; are entitled to the distribution of the reward and welfare funds according to the prescribed regime. In case this distribution is lower than the average of the Corporation, they may be compensated by the reward and welfare funds of the Corporation.

Article 28.- The Financial Company is an independent accounting member enterprise of the Corporation, operating under law and the guidance of the Governor of the State Bank, and according to the organizational and operational statute ratified by the Managing Board and under the direction of the General Director of the Corporation.

The Financial Company is entrusted with the task of mobilizing and lending capital to meet the needs in capital of the Corporation and member units through preferential credit loans of the Government, commercial credits of the banks and international institutions inside and outside the country. It can issue bonds and stocks, enterprise bonds, construction project bonds, buy and sell valuable papers and vouchers as prescribed by law; mobilize idle capital of the units in the oil and gas industry and among the workers and employees of the Corporation.

The Financial Company also mobilizes funds for the investment projects of the Corporation, and performs other services as prescribed by statute of the company and the Financial Company statute within the corporation issued by the State Bank. With regard to major projects, the investors shall directly sign contracts while the Financial Company performs the service function.

The units shall use the capital of the Financial Company on the principle of borrowing and repaying, apply the regime of internal interest rate proposed by the Financial Company and ratified by the General Director of the Corporation with the accreditation of the Managing Board.

Chapter VII

MANAGEMENT OF THE CAPITAL CONTRIBUTED BY THE CORPORATION AND MEMBER ENTERPRISES TO OTHER ENTERPRISES

Section I. MANAGEMENT OF THE CAPITAL CONTRIBUTED BY THE CORPORATION TO OTHER ENTERPRISES

Article 29.- With regard to the capital contributed by the Corporation to other enterprises, the Managing Board of the Corporation has the following rights and obligations:

1. To work out the plan for capital contribution to other enterprises for approval as assigned to it in Point 2, Item 2, Article 14 of this Statute;

2. To appoint, dismiss, commend and discipline the person directly managing the capital of the Corporation at the enterprise to which the Corporation has contributed capital;

3. To supervise and control the use of the capital contributed by the Corporation, take responsibility for the efficiency in the utilization, preservation and development of the capital already contributed. To collect profits from the capital contributed by the Corporation to the enterprise.

Article 30.- Rights and obligations of the persons directly managing the capital contributed by the Corporation to other enterprises:

1. To hold managerial and executive posts at the enterprises having capital contributed by the Corporation under the statute of the enterprise concerned;

2. To monitor and supervise the operations of this enterprise;

3. To observe the regime of reporting and take responsibility before the Managing Board of the Corporation concerning the capital contributed by the Corporation to this enterprise.

Section II. MANAGEMENT OF THE CAPITAL CONTRIBUTED BY AN INDEPENDENT-ACCOUNTING MEMBER ENTERPRISE TO OTHER ENTERPRISES.

Article 31.- An independent-accounting member enterprise can contribute capital to other enterprises as designated by the Corporation. With regard to the capital contributed by the enterprise to other enterprises, the Director has the following rights and obligations in managing this capital:

1. To work out the program of capital contribution for the General Director to submit to the Managing Board of the Corporation for approval;

2. To appoint, dismiss, commend and discipline the persons directly managing the capital at the units where the enterprise has contributed capital;

3. To supervise and control the use of the capital contributed by the enterprise; to take responsibility for the efficiency in the utilization, preservation and development of the capital already contributed; to collect the profits from the capital at the units where the enterprise has contributed its capital.

Article 32.- Rights and obligations of the person directly managing the capital contributed by the enterprise to other enterprises:

1. To assume various managerial and executive posts at the enterprise where his/her enterprise has contributed capital under the statute of these enterprises;

2. To monitor and supervise the business operations of the enterprise where his/her enterprise has contributed capital;

3. To observe the regime of reporting defined by the Director; to take responsibility before the Managing Board of the Corporation and the Director concerning the capital contributed by his/her enterprise to the enterprise where he/she is assigned to managerial or executive posts.

Section III. JOINT VENTURE ENTERPRISES

Article 33.- The VIETSOVPETRO joint enterprise operates in oil and gas business and adopts the accounting system as defined in the Law on Foreign Investment in Vietnam, the Inter-governmental Agreement, the Statute of the Joint Enterprises, and the resolutions of the Joint Enterprises Council to which the Vietnam Oil and Gas Corporation is a participant. This joint venture takes personal responsibility before law for the discharge of its obligations as defined in the Inter-governmental Agreement and other regulations of Vietnamese law.

Article 34.- The other joint venture units, where the Corporation or a member enterprise of the Corporation directly takes part in management and executive duties, shall operate according to the Law on Foreign Investment, the Corporate Law and the related laws of the Vietnamese State. The Corporation or the member enterprises of the Corporation shall perform all powers, obligations and responsibilities toward these joint ventures in the matter of financial operations as prescribed by law and under the signed contracts.

Chapter VIII

FINANCE OF THE CORPORATION

Article 35.- The Vietnam Oil and Gas Corporation performs the regime of general accountancy, financial autonomy in business in conformity with the Law on State Enterprises, other laws, and the Financial Regulations of the Corporation issued by the Ministry of Finance after ratification by the Prime Minister.

Article 36.- Capital of the Corporation:

1. The prescribed capital of the Corporation (based on the result of the property inventory of the member units and the other capital sources assigned by the State).

2. The capital of the Corporation comprises:

a/ The capital of the member units, the capital contributed by the Corporation to other enterprises, including joint ventures with foreign countries (inclusive of VIETSOVPETRO) and the capital contributed by the Vietnamese party to the international corporations on the basis of production-sharing contracts assigned by the Government to the Corporation for management and utilization;

b/ The after-tax profit shall be used to supplement the capital as prescribed by the Financial Regulations of the Corporation;

c/ Other sources (if any).

At each increase or decrease of capital, the Corporation shall have to adjust in time its capital in the balance of property, and make public the capital of the Corporation after readjustment.

Article 37.- The Corporation may establish and use centralized funds to ensure high efficiency of the development process of the Corporation.

The centralized funds of the Corporation are established under the Financial Regulations of the Corporation and by decision of the Managing Board. They comprise:

a/ The development investment fund: established from the capital depreciation capital and the deduction of profits of the member units as prescribed by the Ministry of Finance, the profits from the capital contributed by the Corporation to the enterprises, and other sources.

The capital depreciation capital and the profit from reinvestment of the dependent-accounting units of the Corporation are concentrated at the Corporation for investment according to the annual plan.

Should the Corporation mobilize the capital depreciation capital of the independent-accounting member enterprises, it must observe the principle of borrowing and repayment at the internal interest rate ratified by the General Director with the accreditation of the Managing Board and under the guidance of the Ministry of Finance.

b/ The centralized scientific research and training fund for allocation to the units entrusted with scientific research, training and retraining in the whole of the Corporation is formed by the deduction from the production development funds of the member units and the training allocations from the State budget (if any), the training expenditures contributed by the contractors under the commitments in the Production-Sharing Contracts and other sources of revenue, including those collected by the non-business units of the Corporation from the realization of their services and scientific research and training contracts signed with the enterprises and non-business units inside and outside the country.

c/ The financial reserve fund, the reward fund, the welfare fund are founded under the direction of the Ministry of Finance. The concrete level of reduction and remittance of the above funds and their use are defined in the Financial Regulations of the Corporation.

Article 38.- Financial autonomy of the Corporation:

1. The Corporation operates on the principle of financial autonomy, self-balancing of its revenues and expenditures. It has the responsibility to preserve and develop the various business capital sources, including the capital contributed to the other enterprises, including VIETSOVPETRO enterprise and other joint venture enterprises;

2. It takes the responsibility of paying the debts recorded in the property balance of the Corporation and other international commitments, if any;

3. To supervise the financial operations of the oil and gas contractors, and report the results of its supervision to the authorized State agencies;

4. Assignment of powers in credit relations.

The credit relations (borrowing, lending, buying and selling of goods with delayed payment, guarantee) between the Corporation and the partners outside the Corporation must comply with the following principles:

- Credits equivalent to 15% of the statutory capital or less: each borrowing must be considered and decided by the Corporation.

- Credits equivalent to 15% of the statutory capital or more: each borrowing must be ratified by the Prime Minister.

5. The Corporation shall have to draft, submit and register the financial plan and the financial reports and the property balance of the Corporation to the authorized levels and submit its annual general financial statement to the Ministry of Finance.

6. It shall have to collect all revenues from outside the country and inside the country related to the oil and gas operations already agreed upon in the oil and gas contracts, remit these revenues to the State budget at the rates defined in the Financial Regulations of the Corporation.

7. The Corporation shall have to pay the taxes and other remittances under the current law and according to the Financial Regulations of the Corporation, with the exclusion of the taxes already paid by the member units. It is entitled to use the profits out of the oil and gas operations after fulfilling its tax duties toward the State. The bulk of this profit must be used to develop business of the Corporation.

8. The financial operations of the member units of the Corporation, and the relationship in financial operation between the Corporation and the member units shall be effected in conformity with this Statute, the Financial Regulations of the Corporation, and the regulations on financial operations of each member unit already ratified by the Corporation.

9. The material responsibility of the Corporation in its business relations and in civic relations is limited to the total capital of the Corporation made public at the latest point of time.

10. The Corporation has to seriously observe the Ordinance on Accountancy and Statistics, the current regime of accountancy and financial reports for State-owned enterprises.

11. The Corporation places itself under the control and supervision in financial matters and business operations by the authorized State agencies as prescribed by law.

Chapter IX

RELATIONS BETWEEN THE CORPORATION AND THE LOCAL STATE AGENCIES AND ADMINISTRATION

Article 39.- The Corporation is placed under the State management of the ministries, ministerial-level agencies, the agencies attached to the Government, the People's Committees of the provinces and cities directly under the Central Government in their capacity as State management agencies. At the same time, it is also subject to the management by these agencies in their capacity as agencies performing the ownership right toward State-owned enterprises as defined in the Law on State Enterprises.

Article 40.- Relations with the Prime Minister:

1. With regard to the Prime Minister in his capacity as the highest authority in the matter of State management in the Government, the Corporation is subject to his leadership in the following domains:

a/ To implement the legal documents related to the operations of the Corporation;

b/ Take responsibility for the cases and acts of law-breaking in the Corporation;

c/ To put forth solutions, mechanisms and policies for State management of the Corporation.

2. With regard to the Prime Minister in his capacity as the performer of the ownership right toward State-owned enterprises, the Corporation shall take his leadership in the following:

a/ Receiving capital, land, sea areas, natural resources and other sources assigned by the State for management and utilization aimed at realizing the profitable economic targets and other socio-economic targets according to its tasks and at the request of the Prime Minister during each period;

b/ To propose for ratification and implementation the development strategy, the long-term and mid-term plans, the major investment projects, the economic contracts of great value, the appointment of key posts of the Corporation (members of the Managing Board and the General Director);

c/ To make periodical and irregular reports on the activities of the Corporation.

Article 41.- Relations with the Ministry of Finance:

1. With regard to the Ministry of Finance in its capacity as a State management agency, the Corporation has the responsibility:

a/ To comply with the regimes of finance, accountancy, tax, organization of the accounting and accountancy apparatus;

b/ To conduct financial and internal audit of the Corporation;

c/ To put forth solutions, mechanisms and financial and credit policies concerning the Corporation.

2. With regard to the Ministry of Finance in its capacity as an agency assigned by the Government to carry out a number of ownership rights toward State-owned enterprises, the Corporation has the responsibility:

a/ To determine the capital, natural resources and other sources assigned by the State to the Corporation for management and use;

b/ To use effectively, preserve and develop the capital and other sources it is assigned in the process of its activities as reflected in the annual financial statement;

c/ To draft the contents and issue the financial regulations applicable to the Corporation;

d/ To propose for ratification and organize the implementation of the assignment of property of great value, the investment cooperation with other economic sectors and foreign countries, the above-quota credit relations, the discharge of financial duties, the distribution of after-tax profits, the dissolution and liquidation of property within the Corporation, the supplementation of State budget capital for the Corporation.

Article 42.- Relations with the Government Commission on Organization and Personnel:

1. With regard to the Government Commission on Organization and Personnel in its capacity as a State management agency, the Corporation has the responsibility:

a/ To listen to its opinion regarding the appointment and promotion of cadres;

b/ To work out and implement the standardization of the various titles in the Corporation;

c/ To propose policies and mechanisms in the management, training, and fostering of personnel within the Corporation.

2. With regard to the Government Commission on Organization and Personnel in its capacity as an agency assigned by the Government to perform a number of ownership rights toward State-owned enterprises, the Corporation has to the responsibility:

a/ To draft the plan for organization and reorganization of the Corporation;

b/ To propose the ratification and to implement the decisions of the Government concerning the personnel policies, the appointment, dismissal, reward and discipline of cadres holding key posts in the Corporation as assigned to it in the Statute of the Corporation.

Article 43.- Relations with the other ministries, the ministerial-level agencies and the agencies attached to the Government:

1. With regard to these agencies in their capacity as State management agencies, the Corporation has the responsibility:

a/ To formulate economic and technical norms, product criteria and product quality in conformity with the norms of the branch and the national norms as well as to the regulations on environmental protection;

b/ To expertise the investment projects according to the strategy, the plan for economic and technical development, and the economic planning on the assigned territory;

c/ To implement the regulations on external relations;

d/ To ensure the interests and duties of the laborers within the Corporation according to the undertaking and policies of the State;

e/ To carry out the regulations on import and export operations of oil and gas products and in the trade of oil and gas products.

Article 44.- Relations with the various echelons of the local administration:

With regard to the local administration at various levels in their capacity as State management agencies in their territories, the Corporation shall place itself under the State management of these agencies, and has the responsibility to observe the administrative regulations and fulfil its obligations toward the local administration as prescribed by law. At the same time, the Corporation comes under the management of the local administration of various echelons in their capacity as the agencies assigned by the Government to perform a number of ownership rights toward State-owned enterprises.

Chapter X

REORGANIZATION, DISSOLUTION, BANKRUPTCY

Article 45.- The reorganization of the Corporation shall be proposed by the Managing Board, the Minister-Chairman of the Government Commission on Organization and Personnel shall consider and submit to the Prime Minister for decision.

Article 46.- The Corporation shall be dissolved when the Prime Minister sees no need to maintain it. On its dissolution, the Prime Minister shall set up the Dissolution Council of the Corporation. The remaining property of the Corporation after liquidation shall belong to State ownership.

Article 47.- The reorganization, splitting, merger, dissolution and the organization of new member units of the Corporation shall be proposed by the Managing Board to the Prime Minister for consideration and decision.

Article 48.- When the Corporation and its member units fall into the state of bankruptcy, they shall be handled in the order defined at the Law on Bankruptcy of Enterprises, and under the guidance of the Government on the application of this law.

Chapter XI

IMPLEMENTATION PROVISIONS

Article 49.- This Statute applies to the Vietnam Oil and Gas Corporation. All individuals and member units of the Corporation have to comply with this Statute.

The Statute takes effect from the date of the signing of the promulgation Decree.

Article 50.- Basing themselves on this Statute of the Corporation, the member units of the Corporation shall, depending on their forms of organization, draft their own statutes or organizational and operational regulations and submit them to the Managing Board for ratification. The statutes and regulations of the member units of the Corporation must not be contrary to the Statute of the Corporation.

Article 51.- In the event any documents of the Government, the ministries, the ministerial-level agencies, the agencies attached to the Government, the People's Committees of the provinces and cities directly under the Central Government and the Decision to set up a member enterprise have provided otherwise than this Statute, this Statute shall prevail.

Article 52.- During the process of implementation, the Vietnam Oil and Gas Corporation should sum up experiences in all fields of its activities in order to suggest to the Government to make the necessary amendments and supplements to this Statute.

For the Government

The Prime Minister

I. LIST OF MEMBER UNITS OF THE VIETNAM OIL AND GAS CORPORATION (at the time of its establishment)

1. Oil Product Processing and Trading Company (PVPDC)

2. Gas Product Processing and Trading Company (PVGC)

3. Oil and Gas Design and Construction Company

4. Oil and Gas Technical Service Company (PTSC)

5. Draft Oil and Oil Chemicals Company (DMC)

6. Oil and Gas Commercial Company (PETECHIM)

7. Oil and Gas Tourist Service

8. Financial Company

9. Oil and Gas Insurance Company.

1. Oil and Gas Prospection and Exploitation Company (PVEP)

2. Production Sharing Contract Supervision Company (PSC)

3. Oil and Gas Manpower Training and Supply.

1. Oil and Gas Institute

2. Research and Development Center for Petroleum Processing (RDCPP)

3. Petroleum Safety and Environment

4. Petroleum Data and Information Center.

II. LIST OF JOINT VENTURE UNITS WITH CAPITAL CONTRIBUTED BY VIETNAM OIL AND GAS CORPORATION

(at the time of the establishment of the Corporation)

1. The VIETSOVPETRO Joint Venture Enterprise

2. The ADF Joint Venture

3. The ODV Joint Venture

4. The Tuyen Quang - DMC Baryte Joint Venture.