Vietnam


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Vietnam has considerable oil reserves and was the sixth-largest oil producer in the Asia-Pacific region in 2011. However, production has declined in recent years and the country is now a net oil importer. Petroleum accounted for 14 percent of government income in 2009, down from 24 percent in 2004, the result of a significant drop in revenue. Vietnam also has an estimated 24.7 trillion cubic feet of natural gas reserves, and the government is actively promoting investment in the sector.


Vietnam's Performance on the Resource Governance Index

Vietnam received a "weak" score of 41, ranking 43rd out of 58 countries. A relatively high Institutional & Legal Setting score was offset by "failing" scores on the other components.

Rank
(out of 58)
Score
(out of 100)
43 Composite Score 41
27 Institutional & Legal Setting 63
Freedom of information law 33
Comprehensive sector legislation 100
EITI participation 0
Independent licensing process 50
Environmental and social impact assessments required 50
Clarity in revenue collection 83
Comprehensive public sector balance 83
SOC financial reports required 100
Fund rules defined in law N/A
Subnational transfer rules defined in law N/A
40 Reporting Practices 39
Licensing process 67
Contracts 0
Environmental and social impact assessments 33
Exploration data 50
Production volumes 50
Production value 67
Primary sources of revenue 25
Secondary sources of revenue 0
Subsidies 0
Operating company names 67
Comprehensive SOC reports 17
SOC production data 29
SOC revenue data 4
SOC quasi fiscal activities 83
SOC board of directors 100
Fund rules N/A
Comprehensive fund reports N/A
Subnational transfer rules N/A
Comprehensive subnational transfer reports N/A
Subnational reporting of transfers N/A
50 Safeguards & Quality Controls 31
Checks on licensing process 44
Checks on budgetary process 78
Quality of government reports 56
Government disclosure of conflicts of interest 0
Quality of SOC reports 17
SOC reports audited 56
SOC use of international accounting standards 0
SOC disclosure of conflicts of interest 0
Quality of fund reports N/A
Fund reports audited N/A
Government follows fund rules N/A
Checks on fund spending N/A
Fund disclosure of conflicts of interest N/A
Quality of subnational transfer reports N/A
Government follows subnational transfer rules N/A
35 Enabling Environment 30
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 36
Open Budget (IBP Index) 19
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 13
Government effectiveness (WGI) 44
Rule of law (WGI) 39
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 27th/58, Score: 63/100) learn more

A comprehensive legal framework contributed to a "partial" score of 63, Vietnam's highest on any component.

The Industry and Trade Ministry regulates the sector and the prime minister has final authority to grant hydrocarbon rights, but PetroVietnam, the national petroleum company, makes most licensing decisions. In recent years, PetroVietnam has signed 60 exploration and production contracts with foreign companies, most of them in the form of production sharing contracts. The company conducts direct negotiations with oil companies or organizes competitive open bidding rounds. Environmental impact assessments are required.

The Finance Ministry collects revenues and deposits them in state treasuries before they are centralized; however, some oil and gas revenues are used to cover PetroVietnam's expenses, never entering the national treasury.

Vietnam has no freedom of information law. Anti-corruption legislation requires disclosure of national finances, but key aspects of the petroleum sector are excluded under a "state secrets" provision.

Reporting Practices (Rank: 40th/58, Score: 39/100) learn more

The government provides only incomplete data on the petroleum industry, earning a "failing" score of 39.

PetroVietnam publishes bidding procedures and reports on licensing decisions. No law requires disclosure of oil and gas contracts, although PetroVietnam voluntarily publishes some contract information. Environmental impact assessments must be made available to the public, but it is not clear that this happens in practice.

The Finance Ministry publishes aggregated information on oil revenues and exports, along with the non-resource fiscal balance. The Industry and Trade Ministry publishes production volumes, prices, export values, and data on investment in the petroleum sector. National law prohibits disclosure of information on reserves, petroleum blocks, projects, contracts, or profits.

Safeguards & Quality Controls (Rank: 50th/58, Score: 31/100) learn more

A lack of conflict-of-interest disclosure requirements and poor audit mechanisms led to a "failing" score of 31.

PetroVietnam has some discretionary power in the licensing process. Contract terms are not strictly defined by legislation, leaving room for PetroVietnam officials to negotiate with foreign companies. It is very difficult to appeal licensing decisions.

The National Assembly rarely investigates allegations of mismanagement in the oil sector, and national accounts are not audited regularly. Although a National Assembly committee scrutinizes reports on resource revenues, lawmakers lack the capacity to oversee the industry effectively.

Enabling Environment (Rank: 35th/58, Score: 30/100) learn more

Vietnam received a "failing" score of 30, with especially low global rankings on government accountability and democracy.


State-Owned Companies (Rank: 28th/45, Score: 41/100) learn more

PetroVietnam is entirely owned by the government and is Vietnam's largest state-owned corporation. It functions under the direct management of the prime minister and the Industry and Trade Ministry. Since 2008, PetroVietnam has made an effort to disclose industry information, publishing brief news releases on its website with historical data on petroleum prices, export values, estimates of investment in exploration and development, and the government's share in production sharing contracts. The company does not provide full reports on its operations or subsidiaries. It is audited at irregular intervals and does not publish the results.

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