Kazakhstan approves new rules for awarding mineral licenses
January 20. Interfax-Kazakhstan
The Kazakh government has approved new rules for awarding exploration and production licenses.
The government’s decree published on Thursday in the official press becomes valid 10 calendar days since the day of publication.
According to the document, a mineral license (a subsoil use right) provides for the following types of operations: government’s geological survey, exploration, extraction, combined exploration and production, construction and (or) operation of underground facilities not related to exploration and production.
The Ministry of Oil and Gas grants the right for exploration, production, combined exploration and production of hydrocarbon minerals, while the Ministry of Industry and New Technologies awards a license for exploration, production, combined exploration and mining of mineral resources that exclude hydrocarbons.
Subsoil license for construction and (or) operation of underground facilities not related to exploration and production is given by a competent authority in a manner approved by the government.
The law on subsoil resources stipulates three possible ways of receiving a mineral license: bidding, direct negotiations, a written permission from an authorized agency or an agreement.
The procedure of determining a bidding winner has been reviewed. According to the new rules, the winner is determined after consideration of all bids, the size of the signature bonus and amount of investments into social-development projects and local infrastructure. Previously the list of the prerequisites to determine the winner was more extensive.
A period from the bid submission deadline to the official announcement of bidding results should not exceed 15 days. The period may be extended by the Bidding Commission, but for no longer than one month.
In order to participate in direct negotiations, an entity seeking to sign a subsoil contract, forwards its proposal to the competent authority or local executive body in accordance with the requirements established by the Law on Mineral Resources. Direct negotiations are to be held within two months from the receipt date of the proposal. However, the date of the negotiations may be extended by the competent authority or local executive body.
The document stipulates conditions to receive a mineral license, when an entity enterers a production phase after completion of exploration. Thus, a subsoil user, who discovered and estimated mineral resources under a contract for exploration, has an exclusive right to conclude a contract for production without a bidding contest or direct negotiations.