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New Rules on Subsurface Use Rights Came into Force in Kazakhstan.

  february 2011

New Rules on Subsurface Use rights were introduced in Kazakhstan according to the Kazakhstan Government Resolution. They became effective on February, 1st, following 10 calendar days after official mass-media publication according to statutory procedure.

According to them, the subsurface use rights stipulated mineral resources law are awarded by three ways: competition, without it (by direct negotiating) and under the written resolution reflected in the appropriately approved contract or made by another body. It must be noted that the former Rules did not have a third point.

The subsurface use right shall become effective on the contractual operational date.

The procedure on competition winner selection (subject to a case appropriateness) was significantly revised. The new Rules formed its bases, such as competitive offer, subscription bonus size, region economic infrastructure and social and economic developmental costs.

The terms and conditions were narrower than the previous ones.

In particular, the winner selection was preconditioned by competitive offers and their major deliverables, such as prospecting or extraction terms and intensity, production profitableness and efficiency, proposed, initial, subsequent budget deductions, invested amount, financing part concerning project and industrial social infrastructure of contract territories; compliance with legislative and other acts on environment and subsurface protection, work safety.

They stated that extraction contracts can be concluded with owners of an exclusive right to commercially discovered oil production by direct negotiating, without competition announcement. Prospecting contract including underground structures building and operation, which did not cover prospecting or extraction, contracts on prevailing minerals prospecting or extraction including of general use automobile and railways and bridges building (repair, reconstruction), extraction contracts providing for cooperative works with the national company were also preconditions exempting from competition requirement.

News source:  According to News-Kazakhstan Agency materials
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