Astana, Kazakhstan, Feb. 6
By Daniar Mukhtarov - Trend:
The simplification of legislation in Kazakhstan in the sphere of subsoil use will lead to a reduction in the required examinations for investors by up to 60 percent, Kazakh vice minister of Industry and New Technologies, Nurlan Sauranbayev told Trend.
"The simplification of legislation in subsoil use will lead to a 60 percent reduction in the required examinations which must be passed by the investor whilst obtaining a contract for geological exploration. Previously, there have been cases when investors had to go through these procedures twice a year and they took a lot of time," he said.
Sauranbayev said that one of the 'inappropriate moments' of the existing legislation in the sphere of subsoil use is that it 'equalises approaches to exploration and mining'.
"However the exploration and production require completely different approaches and conditions. There are many risks in the exploration. For instance among 1000 fields being developed, there can only be one commercially effective field. All large companies when making exploration expenditures immediately write them off as a loss. This is the indicator of high risk in exploration. And the investors who came to the exploration sector, were forced to pay taxes on a par with those who have already been engaged in mining operations," the vice minister said.
Sauranbayev said that simplification of the legislation and rules have affected primarily internal procedures.
"We have reduced the time needed to obtain geological information. For example, earlier an investor with a contract could obtain the geological information only within 240 days, but now it will last for only a week. The corresponding decree 'On amendments and additions to the rules for determining historical costs and the value of geological information' has already been signed," he said.
Sauranbayev also added that the so-called 'model contract' (standard contract) will also undergo changes in order to simplify the legislation in the sphere of subsoil use.
"Earlier the model contract included 28 positions and now it is just eight. We removed duplicate positions," the vice minister said.
He stressed that Kazakh legislation on subsoil use will not include any exceptions for foreign or domestic companies.
At the same time Sauranbayev noted that if we are talking about a large deposit, then the 'raw materials in exchange for technology' principle will be a main condition for large foreign companies.
"The arrival of new and advanced technologies in the country is important for us," the vice minister said.
It was previously reported, that the Kazakh government has radically changed the policy in the sphere of subsoil use. At an expanded board meeting of the Kazakh Oil and Gas Ministry on January 27, Kazakh PM Serik Akhmetov announced the need for simplification of legislation in the sphere of subsoil use.
"Our rules should be transparent and understandable for the investors," Akhmetov said.
Translated by E.A.
Edited by S.M.