Vietnam Drafts Petroleum Law Revision to Clear Investment and Regulatory Bottlenecks

National Assembly examines new petroleum framework

Vietnamese lawmakers began discussing a draft revision of the Petroleum Law on 4 August 2026 during the first extraordinary session of the 16th National Assembly, according to VnEconomy. The proposal builds on the 2022 law but seeks stronger measures to address obstacles that have emerged during its first three years of implementation.

The review comes as Vietnam’s petroleum industry faces declining natural production from mature fields, unpredictable oil-price movements and the accelerating global energy transition. National Assembly delegate Phan Thi Thuy Linh of Thanh Hoa said the revision should do more than resolve existing problems: it should shift the policy approach from offering investment incentives toward enabling the industry to compete globally.

Tax and cost-recovery incentives under review

The draft adds provisions for lower corporate income tax rates, reduced crude-oil export tax and a higher cost-recovery ratio. These measures are intended to improve project economics, particularly where geological, geographic or commercial conditions make development expensive or risky.

Delegate Vu Thi Lan Anh of Nghe An supported retaining incentives for small fields, marginal fields, projects in geographically complex areas and operations with high costs or risks. She also backed incentives for enhanced recovery projects, which can increase resource extraction and reduce the risk that recoverable petroleum is left undeveloped.

Lawmakers nevertheless called for the proposed benefits to be aligned with Vietnam’s corporate income tax, export and import tax, investment and state-budget legislation, as well as relevant National Assembly tax resolutions. VnEconomy reported that delegates requested a full assessment of the impact on state revenue and clearer rules defining the principles, scope, eligibility conditions and authority for approving incentives.

More authority requires clearer oversight

The draft would increase the authority of the Vietnam National Industry-Energy Group in selected professional and technical stages, including the approval and management of petroleum contracts. Supporters argue that greater delegation would allow the state-owned group, which holds a central position in the industry, to act more quickly and independently.

Delegates also warned against allowing the group to operate simultaneously as a commercial participant and a state regulator. They called for a clear division between the state management body, the state ownership representative and the enterprise. Where the group is permitted to decide or approve technical matters, the law would need to specify the scope of that authority, applicable conditions and criteria, accountability requirements, inspection procedures, supervision and post-approval review.

The revision must also remain consistent with the Law of the Sea of Vietnam, the Electricity Law, the Law on Environmental Protection and rules governing tax and public budgets. Phan Thi Thuy Linh additionally called for a transparent investment mechanism, a clearer definition of the national group’s functions and long-term reliance on highly qualified personnel and domestically developed technology. The debate indicates that Vietnam is trying to make difficult petroleum projects more investable without weakening fiscal discipline or blurring regulatory responsibility.