DECISION

APPROVING THE SCHEME ON RESTRUCTURE OF VIETNAM PETROLEUM GROUP IN PERIOD 2012-2015

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on organization of Government;

Pursuant to the Decision No. 929/QD-TTg dated July 17, 2012, of the Prime Minister, approving the scheme on restructure of state-owned enterprises, focusing on economic groups and state-owned corporations period 2011 – 2015;

At the proposal of Minister of Industry and Trade and Members' Council of Vietnam Petroleum Group,

DECIDES:

Article 1. To approve the scheme on “restructure of Vietnam petroleum group (PVN) in period 2012-2015” with the following contents:

I. OBJECTIVES

To build Vietnam Petroleum Group into a strong and dynamic economic group having international and domestic competitive capability, obtaining high efficiency in production, business and development investment by using optimally all available resources; develop fast and adequately from petroleum search, exploration and exploitation  to processing petroleum, manufacture of fertilizers, electricity, petroleum services with high quality.  

Sustainable development accompanying with ecological environment protection; contributing in protection of national sovereignty on sea and security assurance; taking initiative in international economic integration, expansion of activities overseas. 

II. CONTENT

1. Business:

a) Petroleum search, exploration and exploitation.

b) Refinery – Petrochemical.

c) Gas Industry.

d) Power Industry.

dd) High-quality petroleum services.

In which, petroleum search, exploration and exploitation are main business lines.

2. Classification and arrangement of member units:

a) PVN further holds 100% of charter capital:

- Petroleum exploration and exploitation Corporation.

b) PVN keeps intact of the existing capital rate at enterprises:

- Joint-Stock Company of Drilling and Petroleum Drilling Service (50.38%);

- Vietnam Joint-Stock Company of Petroleum Technical Service (51%);

- Russian and Vietnamese joint venture – Vietsovpetro (51%);

- Rusvietpetro joint venture under Limited Liability Company (49%);

- Gaspromviet Limited Liability Company (49%);

- Nghi Son Refinery & Petrochemical Limited Liability Company (25.1%);

- Long Son Petrochemical Limited Liability Company (18%);

c) Enterprises conduct the equitization:

- Period 2012-2015:

Binh Son Refinery & Petrochemical One-member Limited Liability Company (PVN holds 75% of charter capital);

+ Ca Mau Fertilizer and Petroleum One-member Limited Liability Company (PVN holds 51% of charter capital);

+ Dung Quat Shipbuilding Industry One-member Limited Liability Company (PVN holds 36% of charter capital);

- Period after 2015:

+ Vietnam Oil Corporation (PVN holds 75% of charter capital);

+ Vietnam Oil, Gas and Power Corporation (PVN holds 75% of charter capital);

d) Sale of parts of capital which PVN is holding at enterprises at present:

- Period 2012-2015:

+ Joint-Stock Company of Transport and Petroleum (decrease from 57.82% to 36% minimally);

+ PetroVietnam Energy Technology Corporation – joint stock company (decrease from 41% to 36% minimally);

+ PetroVietnam Construction and Installation Joint-Stock Company (decrease from 54.54% to 36% minimally);

+ Joint-Stock Company of Petroleum Petrochemical and Synthetic Fiber (decrease from 57.82% to 36% minimally);

+ PVI Joint-Stock Company (decrease from 39.05% to 35%);

- Period after 2015:

+ Petroleum Fertilizer and Chemical Corporation – Joint Stock Company (decrease from 61.37% to 51%);

dd) Sale of all capital which PVN is holding at enterprises at present:

- Period 2012-2015:

+ Lai Vu industrial zone One-member Limited Liability Company;

+ Ocean joint-stock commercial bank;

+ Green Indochina Development Joint-Stock Company;

+ PetroVietnam Trade Union Financial-Investment Joint-Stock Company.

- Period after 2015:

+ Petroleum General Service Joint-Stock Company.

e) To transfer capital of PVN in Trade, Technique and Investment Corporation – Joint Stock Company for Vietnam Oil Corporation to hold it.

g) Arrangement of research and training facilities:

- Petroleum Vocational College is kept intact;

- To research for establishment of Vietnam Petroleum Academy on the basis of re-arrangement of Vietnam Petroleum Institute and Petroleum University;

h) To dissolve branch of Vietnam Petroleum Group -  Petroleum Coal Import and Distribution Company. 

3. To complete mechanism of management and organizational restructure applicable to enterprises level II, level III in the principles:

a) Through representative and basing on law, PVN orientates member enterprises (level II, level III) about matters:

- Development strategic; general business coordination plan in the Group; assignment of operational sectors and business lines; regulations on management, administration and standards, norms;

- To change quantity of member enterprises of enterprises level II and re-organization of enterprises level II. To participate in capital contribution to establish new enterprises, to participate in capital contribution in other enterprises; 

- Use of: Trademark of Vietnam Petroleum Group, information service, research and application of science and technology, training; giving names of enterprises according to unified regulation;

- Decentralization in investment, procurement, and bid in principle of depending on control extent of enterprise and operational efficiency of enterprise;

- Organization of officers and training of human resource;

- The works of emulation, commendation, culture, sport and social welfares.

b) Enterprises level II operate under form of mother company - subsidiary companies are restructured in direction: Mother company performs function of financial investment, and directly conducts production and business activities; subsidiary companies are specialized into each production and business sector in line with business lines of Mother Company; has no associate companies; does not operate enterprises level II under form of Mother Company - subsidiary companies.

Have roadmap to finish the sale of capital parts and re-arrangement of enterprises inappropriate with structure orientation mentioned above before 2015.

4. Enterprise administration restructure is concentrated in the following contents:

a) To amend, supplement and complete system of regulations on internal management;

b) To re-arrange organizational structure, apparatus of management and administration;

c) To complete regulation on officer affair, push up the training of human resource; ensure settlement of policy, rights and benefits for employees during restructuring enterprises under law.

d) To strengthen the work of internal control;

dd) To push up application of scientific and technological advances and implement solutions to increase labor productivity, reduce costs in production and business;

e) To strengthen duties and powers and directions of PVN for capital representatives of PVN at other enterprises;

g) To strengthen organization of Party’s organizations, mass associations in PVN.

III. ORGANIZATION OF IMPLEMENTATION:

1. The Ministry of Industry and Trade shall:

a) Guide, monitor, inspect implementation of this Decision; quarterly, make reports to the Prime Minister, assume the prime responsibility for, and coordinate with relevant agencies in timely handling the problems arising or reporting to the Prime Minister about matters beyond its competence;

b) Assume the prime responsibility for, and coordinate with Vietnam Petroleum Group and relevant agencies in elaboration, submission to Government for promulgation of Decree on Charter of organization and operation of Vietnam Petroleum Group; propose amendments, supplementations to the Government’s Decree No.  115/2009/ND-CP dated December 24, 2009, on petroleum activities as appropriate.

c) Assume the prime responsibility for, and coordinate with the Ministry of Finance and Vietnam Petroleum Group in proposing the gas business mechanism (in which include relation between Mother Company – Vietnam Petroleum Group and Vietnam Gas Corporation – Joint Stock Company), plan on gas price under market and reduction of capital rate which Vietnam Petroleum Group holds in Vietnam Gas Corporation – Joint Stock Company and submit to the Prime Minister for consideration.

2. The Ministry of Finance:

To research, submit to Government for promulgation of Decree on Regulation on financial management of Vietnam Petroleum Group.

3. Ministries of:  Planning and Investment, Home Affairs, Labor - Invalids and Social Affairs  shall, under their competence, coordinate with the Ministry of Industry and Trade in performing task assigned at Clause 1 part III of this Article. 

4. Members' Council of Vietnam Petroleum Group shall:

a) Elaborate development strategy in period 2012-2015, orientated till 2020, submit the Prime Minister for consideration and approval; to implement 5-year plan on production, business and development investment in period 2011-2015 already been approved by the Prime Minister in Decision No. 1381/QD-TTg dated August 12, 2012;

b) Elaborate plan on re-organizing production and business in line with the approved restructure scheme; financial plan to carry out implementation of the assigned main tasks and process financial shortcomings during restructure. Direct restructure and arrangement of member enterprises in accordance with this Decision.

c) Perform re-arrangement of functions, tasks and business lines of enterprises in Group such as the scheme mentioned (except for Vietnam Gas Corporation – Joint-Stock company, will be determined when the Prime Minister considers proposals of the Ministry of Industry and Trade and decides).

d) Report the Prime Minister:

- With clearer content of production and business of units, projects having difficulties, being ineffective, having bad financial situation; clearly stating causes (objective and subjective), duties and solutions to overcome.

- To assess the efficiency of investment in fields outside main business lines; overseas investment; big projects, key projects performed by Mother Company – Vietnam Petroleum Group and member companies.  

- Reason of proposals: To raise capital rate which PVN holds at Joint-Stock Company of Petroleum Chemical Products and Drilling Solutions, and Petroleum Architecture Advisory Corporation – Joint-stock Company; Mother Company – PVN will receive capital part which has been contributed in the Phuoc An Port Investment and Exploitation Petroleum Joint Stock Company by the PetroVietnam Technical Service Corporation and member units.

dd) To elaborate specific and strict handling plan in accordance with law and directions of the Prime Minister at Notice No. 309/TB-VPCP dated August 28, 2012 of Government's Office involving PetroVietnam  Finance Corporation, and submit to the Prime Minister for consideration and decision. 

e) Decision on establishment of unit supplying fuel for Thermal-power plants at Petroleum Power Corporation under law.

g) Concentrate on enterprise administration restructure in accordance with contents mentioned at Clause 4 part II Article 1 of this Decision.

To elaborate and implement regulations on supervision, check, inspection over compliance with law, perform of objectives, strategy, plans and tasks as assigned, assess the operational efficiency of subsidiary companies, managers under regulations.

h) Quarterly, report to the Ministry of Industry and Trade, the Ministry of Finance, the Steering Board of Enterprise Renovation and Development about implementation result of this Scheme.

Article 2. This Decision takes effect on the day of its signing.

Article 3. Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, chairpersons of People’s Committee of provinces and central-affiliated cities, heads of the Steering board of enterprise renovation and development, Members' Council of Vietnam Petroleum Group shall implement this Decision.