Decommissioning, local content and the 2027 Petroleum Law: the decommissioning plan and fund, carrying out decommissioning, training and employment of Vietnamese staff, Vietnamese goods and services, domestic sales, safety, environment and insurance, the transition to Law No. 10/2026/QH16 on 1 March 2027 and what it may mean for existing contracts, and the overlap with offshore wind and carbon capture

Why decommissioning is front-loaded

Vietnam's producing fields are ageing. Many offshore installations in the Cuu Long and Nam Con Son basins were built in the 1980s and 1990s, and several fields are approaching or past the end of their original contracts. The State's concern is that the cost of removing platforms, plugging wells and restoring the seabed should not fall on the budget if a contractor leaves or fails. The 2022 law answers that concern by requiring decommissioning to be planned early and funded during production, through a fund the State party holds, rather than left to the contractor's balance sheet at the end of field life (FAQ 114).

The decommissioning plan

Article 50 of Law No. 12/2022/QH15 requires the contractor to prepare a decommissioning plan for the facilities in the contract area, which is appraised and approved by MOIT, with Petrovietnam's involvement; under Government Resolution No. 66.6/2025/NQ-CP some approvals of this kind are delegated to PVN until 28 February 2027. The plan must be submitted through PVN within one year of first commercial production and updated at least a year before the contract or the field's production ends (FAQ 114). Article 51 of Decree No. 45/2023/ND-CP governs the preparation and content of the plan, which in practice identifies the facilities to be removed, the methods, the timetable, the estimated cost and the environmental and safety measures.

The plan need not require full removal of every structure. Article 55 of the decree allows the authority to approve leaving facilities in place, deferring decommissioning, or carrying it out in part or in full, where the conditions in the decree are met; reuse of a platform for a new development or, in future, for a carbon storage project is the kind of case in which partial removal or deferral may be sought. A decision to leave facilities in place transfers continuing responsibilities, and the post-closure responsibilities introduced by the 2027 law are likely to bear on those decisions.

The decommissioning fund

Article 51 of the law requires the contractor to set up a fund to secure the decommissioning obligation within one year of the first commercial production of oil or gas from the contract area. Contributions are made annually, on the basis of the approved decommissioning plan, and paid to Petrovietnam, which manages the fund; each contractor contributes in proportion to its participating interest, and the contributions are recoverable costs under the contract. Contributions must be completed before the contract or the field's production phase ends. While the money is not used, Petrovietnam deposits it with a commercial bank in which the State holds a controlling stake, and the interest, after related financial obligations, is added to the fund.

If the fund is insufficient when decommissioning takes place, the contractors must contribute the shortfall; if there is a surplus after decommissioning is complete, it is returned to the contract parties as the contract provides. Articles 52 to 54 of Decree No. 45/2023/ND-CP govern the calculation of contributions, the management and use of the fund and its final settlement. Because contributions are recoverable, they are effectively funded out of production, and they reduce profit petroleum in the years they are made; because they are tied to the plan's cost estimate, an updated plan with a higher estimate increases the annual contribution.

Carrying out decommissioning

Article 52 of the law requires decommissioning to be carried out in accordance with the approved plan when the contract ends, when a field's production ends, or when facilities are no longer needed, and Article 59(7) makes clearing petroleum facilities, equipment and vessels a contractor obligation. The fund pays for the approved work. Where the contractor's term ends and Petrovietnam or another entity takes over the field under Article 41, the decommissioning obligation and the fund follow the facilities, and the handover agreement should settle who bears which liabilities, including for wells already plugged and for facilities left in place.

A buyer of a participating interest in a producing field inherits its share of the decommissioning obligation. Due diligence should cover the approved plan and its latest cost estimate, the fund balance, the contributions made by each party, any disputes about the estimate, and the contractual allocation of decommissioning liability between seller and buyer, which Vietnamese law leaves to the parties provided the obligation to the State is met.

Local content: training, labour, services and technology

Vietnam's local-content regime is principally contractual. Article 30 requires every petroleum contract to contain commitments on training, a research fund and the priority use of Vietnamese labour and services, and those commitments are bid variables in a licensing round. Article 59(3) obliges the contractor to transfer technology, train and employ Vietnamese workers and protect their lawful rights, and Article 59(12) requires the contractor to select suppliers of petroleum services and goods through competitive, fair, transparent and efficient processes consistent with the contract and to report the selection to Petrovietnam (FAQ 114). In practice, Petrovietnam's own service subsidiaries, in drilling, technical services, construction and shipping, compete strongly for contracts, and an operator must show PVN that its procurement complied with the contract.

Foreign specialists are employed under the ordinary work permit rules, which permit exemptions and simplified procedures in some cases (Work permits for foreign staff), and the operator's Vietnamese employees are covered by the Labour Code, social insurance and the operator's internal labour rules (Chapter 4). Technology transfer to Vietnamese parties may need registration under the technology transfer law (Technology transfer and licensing).

Domestic sales, safety, environment and insurance

Article 59(8) requires the contractor, when the Government so requires, to sell its share of natural gas under gas development projects in the Vietnamese market as agreed, and to sell its share of crude in Vietnam at internationally competitive prices. Domestic refineries and gas-fired power plants depend on that obligation, and gas sales agreements are negotiated against it. Article 59(10) requires the contractor to share existing infrastructure with third parties under agreement where this does not disrupt its operations, and Article 59(11) to allow other resource activities in the contract area that do not hinder petroleum operations.

Safety is governed by Article 8 of the law and Chapter V of Decree No. 45/2023/ND-CP (Articles 39 to 44), which govern safety management, risk assessment and emergency response for petroleum facilities under MOIT's supervision. Article 49 restricts flaring and venting of gas. Environmental impact assessments for field developments and environmental licences for operations are required under Law No. 72/2020/QH14, and contractors must maintain oil spill response capability under the Prime Minister's regulations on oil spill response. Insurance of facilities, wells, pollution and third-party liability is dealt with in the petroleum contract and the operator's insurance programme under Vietnamese insurance law; the coverage required should be checked against the specific contract, and placement through or alongside Vietnamese insurers may be required.

The transition to Law No. 10/2026/QH16

Law No. 10/2026/QH16 on Petroleum takes effect on 1 March 2027 and replaces Law No. 12/2022/QH15. MOIT's public statements in September 2026 describe five core changes: greater decentralisation to the State management authority and delegation of powers to Petrovietnam, with simplified procedures and stronger supervision, while powers relating to defence, security and force majeure stay with the competent authorities; additional incentives for small and marginal fields and for deepwater and far-offshore projects, and encouragement of enhanced recovery and tail-end production; a framework for carbon capture and storage, offshore energy and high-technology services linked to petroleum operations, including shared infrastructure; more flexible contracts that protect contractors' interests and allow the contract term to be extended and work commitments adjusted, with rules on how Petrovietnam's costs are treated where it performs obligations for the State; and accounting, audit and cost settlement rules aligned with international practice. Reports of the law also mention provisions on carbon credits and post-closure responsibilities.

What the law means for existing contracts depends on its transitional provisions and the implementing decree, which MOIT circulated in draft in 2026 for adoption by 1 March 2027. MOIT has said that the law observes the principle of non-retroactivity, which ordinarily means that contracts approved and signed under the 2022 law, and their fiscal terms, continue to apply, while procedures carried out after 1 March 2027, such as approvals of plans, amendments, extensions and transfers, follow the new law. Whether existing contractors can opt into the new incentives, and how pending applications are treated, should be confirmed against the final text before relying on any assumption. Contractors negotiating extensions or new contracts in late 2026 should consider whether to conclude them before or after the change.

Offshore wind and carbon capture: where the regimes meet

Two new activities will share Vietnam's offshore with petroleum. Offshore wind is electricity generation governed by Law No. 61/2024/QH15 on Electricity, which took effect on 1 February 2025 and contains specific provisions on offshore wind, together with the marine and investment laws on the use of sea areas (FAQ 93). The 2027 Petroleum Law's provisions on offshore energy concern facilities and infrastructure linked to petroleum operations, not offshore wind as such, so a wind project remains subject to the electricity regime even where it uses a petroleum platform or pipeline corridor. Conflicts over sea areas between wind and petroleum blocks are resolved through marine spatial planning and the approvals of the competent authorities.

Carbon capture and storage has had no specific legal framework in Vietnam. Law No. 10/2026/QH16 introduces rules on the location of carbon capture, the responsibilities of those who capture and store carbon, shared use of infrastructure and safety, limited to activities directly connected with petroleum operations, such as reinjection of carbon dioxide into depleted reservoirs. Its detail will be in the implementing decree. An investor considering CCS in a Vietnamese field should treat the framework as new and untested and should expect the allocation of long-term storage liability, and its link with decommissioning and post-closure responsibilities, to be the central question.