VLADIMIR PUTIN SIGNS LAW TO RATIFY RUSVIETPETRO AGREEMENT
04 July 2016
The agreement sets out favourable conditions for the operations of the Russian–Vietnamese company within the Russian Federation.
President Putin has approved a federal law ratifying an agreement between the ministerial cabinets of the Russian Federation and Vietnam for further cooperation in geological exploration and oil and gas production in Russia on the basis of a joint venture. The document was published via an official web portal for legal information.
Signed in Hanoi on 20 April, the agreement will remain valid until 31 December 2033. It is envisaged that the Russian–Vietnamese company will pay just 40% of mineral extraction tax on its oil drilling in Nenets Autonomous District.
The agreement outlines the principles of distribution of profits made by Rusvietpetro. Seventy percent of the company’s profits left after deductions are made to the reserve fund will be paid out as dividends on a quarterly basis, with the remainder distributed at the end of the year depending on cash flow valuation.
Rusvietpetro was established in 2008. Zarubezhneft holds 51% and Petrovietnam holds 49% of this joint venture company, which is currently developing 13 oil fields in the Nenets Autonomous District.