COMMENT TO ARTICLE 84. LICENSE FOR GEOLOGICAL EXPLORATION OF SUBSURFACE RESOURCES TO THE CODE OF THE REPUBLIC OF KAZAKHSTAN "ON SUBSURFACE RESOURCES AND SUBSOIL USE"
1. Under a license for the geological study of subsurface, its holder has the right to use subsurface resources for three years for the purpose of geological survey and (or) geophysical work, as well as prospecting and evaluation work on groundwater.
2. A license for geological exploration of subsurface resources does not grant its holder the exclusive right to a geological exploration site, except in cases where a decision of the Government of the Republic of Kazakhstan establishes otherwise.
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(M.B.Telemtaev, M.A. Ibragimov)
1. In accordance with the Code on Subsurface Resources, operations for the geological study of subsurface resources are systematic regional geological studies, studies using space methods of remote sensing of the Earth, geological surveys, aerial and (or) space seismological monitoring in order to obtain comprehensive geological information and create geological maps that form the information basis of subsurface use. The geological study of the subsurface also includes the search and evaluation of minerals, monitoring of the state of the subsurface, engineering and geological surveys for construction, applied scientific research in the field of exploration and use of the subsurface, other work carried out to study the Earth's crust and processes occurring in it, manifestations of minerals and other resources of the subsurface.
At the same time, it should be borne in mind that the above enumeration of types of work is typical specifically for the state geological survey, which is conducted on the basis of a relevant agreement concluded between the authorized body for the study of subsurface resources and the contractor in accordance with the legislation of the Republic of Kazakhstan on public procurement. As for the geological study of subsurface carried out on the basis of the license provided for in the commented article, the composition of these works on the geological study of subsurface is, as a rule, much more
more limited in nature. And this limitation is quite understandable, given that the private license holder has the immediate goal of obtaining some rather specific geological information, which can be further relied upon when deciding on possible future geological exploration of the identified promising discoveries identified during the geological study. That is why the commented article mentions only such purposes of geological exploration of the subsurface and types of activities under license as conducting geological survey and (or) geophysical work, as well as prospecting and evaluation work on groundwater.
At the same time, the holder of a license for the geological study of subsurface resources has the right to independently determine the specific types, methods, methods and techniques of the specified work on geological survey and geophysics, depending on what operations he specializes in and what work he plans to carry out in the future (exploration and (or) production of hydrocarbons or TPI).
2. The right to conduct a geological study of the subsurface arises, inter alia, on the basis of a special license provided for in the commented article. The holder of a license for the geological study of subsurface resources has the opportunity to carry out geological survey and (or) geophysical work on the relevant subsurface area, as well as prospecting and evaluation work for groundwater. The validity period of the license is precisely indicated by the commented article. It is three years long and cannot be extended. Thus, if the license is not terminated prematurely on any of the grounds provided for by the Subsoil Code (returned by the subsoil user to the state upon its refusal of the geological survey site or revoked by the authorized body on one of the grounds provided for by the Subsoil Code), after the expiration of the specified three-year period, the license is terminated and the entity loses its right to conduct this type of research. subsurface use operations.
3. Unlike other types of licenses (for exploration or extraction of solid minerals, including OPI, licenses for the use of subsurface space and for prospecting), a license for the geological study of subsurface is issued not by the competent authority in the field of subsurface use, but by the authorized state body for the study of subsurface.
4. Another important difference between the license in question and other types of licenses is that, as a general rule, a license for the geological study of subsurface resources does not grant its holder the exclusive right to a geological study site. In accordance with paragraph 2 of the commented article, such an exclusive right to a plot may be granted to the owner.
licenses are issued only by a special decision of the Government of the Republic of Kazakhstan. The Code on Subsurface Resources does not answer the question of when such a decision was made by the Government of the Republic of Kazakhstan: does this decision precede the moment of granting the license and then the interested person receives a license with the already existing exclusive right to the relevant subsurface area, or can it be issued after granting the license for geological exploration of the subsurface. The Code on Subsurface Resources does not contain any provisions that would define the grounds and procedure for making such a special decision by the Government of the Republic of Kazakhstan, and therefore it can be argued that granting one or another subsurface user the exclusive right to a site for geological exploration depends on the initiative and discretion of the Government itself. It is also possible, and practice has already confirmed this, that an interested person, a subsurface user, may be the initiator of such a government decision. It is important to keep in mind that the exclusivity of the right to a subsurface area, granted by a Government decision, means that the use of the relevant subsurface area is assigned only to a certain subsurface user who has received such a right, while other persons cannot carry out any subsurface use operations on this site. Thus, in this case, we are talking only about the exclusivity of the use of the relevant site, and not at all about the fact that this decision of the Government of the Republic of Kazakhstan gives the subsoil user some "exclusive" rights to further operations in the form of exploration and (or) production on the site provided to him or part of it.
The absence of the holder of a license for the geological exploration of subsurface exclusivity of the right to conduct operations provided for by the license on a subsurface area means, in particular, that such operations for the geological exploration of subsurface on the same site can be simultaneously conducted by several subsurface users under different licenses, and in cases with other operations under other types of licenses, priority in conducting holders of exploration or production licenses, as well as licenses for the use of subsurface space or prospecting, enjoy subsurface use in the relevant subsurface area. The existence of such priority follows, for example, from the fact that, in accordance with the Subsoil Code, the holder of a license for the geological study of the subsoil is not entitled to carry out work on the geological study of the subsoil (except in cases of aerogeophysical research) on the territory of a subsoil plot provided for use by another person for exploration and (or) mining, without the consent of such person. faces.
In other words, if we are talking about a free subsurface area, then two or more persons with licenses for
geological exploration of the subsurface. If operations are carried out at a particular site under a license for the geological exploration of subsurface, this does not prevent operations for exploration, production or use of subsurface space from starting at the same site. However, if a subsurface area is already in use by the holder of a license for exploration, production or use of subsurface space, then geological exploration of the subsurface on the basis of a license on the same site is possible only with the consent of existing subsurface users.
5. Licenses for geological exploration have another important feature. It consists in the fact that if, for example, the holder of an exploration license at any time of its validity has the exclusive right to obtain licenses for the extraction of solid or widespread minerals discovered within the exploration area or a license to use the subsurface space located within the exploration area, then the license for the geological study of the subsurface of such rights it does not provide it to the owner.
6. A license for geological exploration of subsurface is distinguished from other types of licenses for subsurface use by another important feature. The holder of this license does not formally have the right to early renounce the subsoil plot provided to him at his discretion, which in turn entails the termination of the license.
Indeed, with respect to all other licenses for the right of subsurface use, the Code on Subsurface provides that the subsurface user, at his discretion, has the right at any time before the expiration of the license period to abandon the subsurface area provided to him for use on the basis of the relevant license. In contrast, the Subsoil Code does not explicitly provide for the right to abandon a site in the case of a geological study of the subsurface under an appropriate license. However, the holder of a license for the geological exploration of the subsurface certainly has such a right. It is based on the provision of Article 33 of the Subsoil Code stating that any license for subsurface use is terminated, including in the event of a refusal by a subsurface user from a subsurface area for which a license was issued. Since this rule is general and unconditional, is not limited by any circumstances for its application and does not say anything that such a waiver is possible, for example, only in cases provided for by the Subsoil Code, the right of refusal should be considered applicable to any license that terminates in the event of such a waiver. its owner from the corresponding subsurface area.
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Kazakh Association of Organizations of the Oil and Gas and Energy Complex KAZENERGY
Nur Sultan 2022
The Kazenergy Association expresses its sincere gratitude for the support in preparing the commentary to the following companies: North Caspian Operating Company NV, NC KazMunayGas JSC, Mangistaumunaygas JSC, Karachaganak Petroleum Operating BV, White & Case Kazakhstan LLP, Haller Lomax LLP)", "Erlicon CG" LLP, "Signum Law Firm" LLP. © Kazenergy Association, 2022 © team of authors, 2022 © authors, 2022
Dear readers!
We offer you a scientific and practical commentary prepared by a group of Russian specialists with extensive practical experience in legislation on subsoil and subsoil use and who participated in the preparation of the Code on Subsoil and Subsoil Use.
Subsurface use is a very complex and specific area of public relations, the regulation of which has its own historical background and takes into account the technological specifics of the process of subsurface development, as well as environmental, commercial, legal and other features of exploration and development of deposits.
Kazakhstan's legislation on subsoil and subsurface use has passed through several stages in its development, and has always been based on a balance of interests between the state and subsurface users, transparency, striving for the maximum possible degree of protection of the rights and legitimate interests of investors, ensuring sustainable social, economic and environmental development of the country.
The Code "On Subsoil and Subsoil Use", adopted at the end of 2017, was developed taking into account many years of accumulated experience and law enforcement practice, as well as the results of extensive discussions with experts working in the industry.
It reflects specific, important measures on the part of the state to increase the investment attractiveness of exploration and further reduce administrative barriers.
Nevertheless, practice and legislation do not stand still, constantly evolving, taking into account new challenges facing both the subsurface use industry and the economy as a whole.
In this regard, this commentary is intended to serve as an aid for a wide range of interested persons – specialists working in the industry, in
understanding the meaning of the norms, their historical context, the interrelationship and mutual influence of the various provisions of the Code.
We also hope that studying the commentary will serve as an incentive for new generations of young domestic specialists to work scientifically and practically in this important industry, for the benefit of the development of our country, current and future generations of Kazakhstanis.
Sincerely, U. Karabalin, Deputy Chairman of the Kazenergy Association, Hero of Labor of Kazakhstan
