COMMENTARY TO ARTICLE 16. SUBSURFACE SPACE TO THE CODE OF THE REPUBLIC OF KAZAKHSTAN "ON SUBSURFACE AND SUBSURFACE USE"

Home / RLA / COMMENTARY TO ARTICLE 16. SUBSURFACE SPACE TO THE CODE OF THE REPUBLIC OF KAZAKHSTAN "ON SUBSURFACE AND SUBSURFACE USE"

The subsurface space is a three-dimensional spatial property of the subsurface, which, taking into account geotechnical, geological, economic and environmental factors, can be used as an environment for the placement of industrial, scientific or other activities.

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(Telemtaev M.B., Ilyasova K.M., Ibragimov M.A.)

1. The commented article includes provisions that are novelties of the Kazakh legislation on subsoil and subsurface use, and contains a brief formulation of the concept that was not applied in the previously existing legislation of the Republic of Kazakhstan. At the same time, it should be noted that the subsoil was almost always widely used for the construction and operation of underground structures that were not directly related to the exploration or extraction of minerals. Such use took place, for example, for the purposes of underground storage of oil, gas, and other materials, disposal of harmful substances and industrial waste, wastewater discharge, etc. Therefore, the norms that

They regulated relations unrelated to exploration or mining operations, but involving the use of underground space for other purposes of economic activity, and have long been the institute of legislation on subsoil use (Articles 9, 30 of the 1992 Code on Subsoil and Processing of Mineral Raw Materials, paragraphs 2), 11), 21), art.1, art.10, 19 of the Law on Subsoil of 1996, paragraphs 6), 18), 38) of Articles 1, Articles 28, 44 of the Law on Subsoil of 2010).

An analysis of previous legislative acts shows that relations on the use of subsurface resources for purposes not directly related to exploration and production operations were first mentioned in the 1976 Code on Subsurface Resources of the Kazakh SSR. By regulating this area of subsurface use, the said law defined and regulated these relations in relative detail as an independent type, however, it did not contain a detailed definition of the status, rights and obligations of the owners of the relevant underground structures, did not define the process of burial of harmful substances and industrial waste in these structures, discharge of wastewater into them, etc.

The subsequent 1992 Code on Mineral Resources and Processing largely eliminated the existing gaps. Thus, this legislative act established the procedure for providing subsurface resources for the disposal of harmful substances and industrial waste, defined in great detail the process of designing, building and commissioning underground structures for other purposes, introduced rules on the selection of a subsurface area, etc.

This range of issues was later regulated in sufficient detail in the 1996 Law on Subsoil, which in its initial editions, in particular, stipulated that the construction and operation of underground structures not related to exploration and (or) mining include work (operations) on the construction and operation of underground structures. general economic purposes, as well as those used for the disposal of radioactive waste, harmful substances and wastewater. At the same time, it was established that this type of subsurface use is carried out on the basis of a contract and the rules related to mining apply to it, unless otherwise provided by law.

In many ways, similar provisions regarding the construction and use of underground facilities and structures not related to the exploration and extraction of minerals have been consolidated in the 2010 Law on Subsoil.

The differences in the legislation on subsoil and subsurface use, which was in force at different periods, in the definition of this concept consisted in determining the list of underground structures, the construction of which related to the operation of subsurface use.

At the same time, it should be noted that, along with the use of subsurface resources for the construction of underground structures not related to exploration and production, previous legislation also provided for provisions according to which such a function of subsurface resources as a spatial and operational basis was also used for the construction of underground structures related to the implementation of subsurface use operations.

A subsurface user who signed a contract for exploration and (or) extraction of minerals could build various underground production facilities (wells, underground pipelines, storage facilities, reservoirs, etc.). Thus, the definition of the term "subsoil" in the 1992 Code on Subsoil and Processing of Mineral Raw Materials indicated that the properties of the subsoil are not limited to They belong to a natural storeroom and can be used to house underground structures. In Article 3 of the 1992 Code on Subsoil and Processing of Mineral Raw Materials. The subsoil was defined as a part of the natural environment that can be used to meet national economic and other needs by extracting (separating) its components or for the placement of underground structures, the burial of harmful substances and industrial waste, and the discharge of wastewater. However, it does not follow from this definition that we are talking only about the placement of underground structures that are not related to exploration or mining.

The legislative acts on subsoil and subsurface use, which were adopted later, also provided for regulations on the construction of underground structures related to exploration and production (paragraphs 21), 24) of Article 1 of the 1995 Oil Law, paragraphs 1-3 of Article 13 of the 1996 Law on Subsoil, paragraphs 5-2), 76) Article 1 of the 2010 Law on Subsoil).

For example, according to paragraphs 24) of Article 1 of the 1995 Oil Law, the concept of "production" covered the construction and operation of underground and above-ground industrial equipment and structures, including the contractor's pipeline for transporting oil from the production site to the transshipment site to the main pipeline and (or) to another type of transport. Paragraphs 5-2) of Article 1 of the 2010 Law on Subsoil provided for an independent definition of the concept of "construction and (or) operation of underground structures related to exploration and (or) production", which meant work on

construction and (or) operation of underground facilities intended for the disposal and storage of industrial waste in accordance with the approved project document for exploration and (or) production resulting from exploration and (or) production. The definition of the concept of "oil operations" in paragraph 76) of the specified article included not only work on oil exploration and production, but also on the construction and (or) operation of necessary technological and related facilities.

This approach of the legislation on subsurface and subsurface use, which provides for provisions on the use of subsurface not only for exploration or mining, but also for the construction and operation of underground structures, is based on the so-called "geometric" approach in defining the concept of "subsurface" in Kazakh legislation, which rather inconsistently regulates relations on the use of subsurface space. Although the previous legislation provided for this type of use of subsurface (subsurface areas) However, neither the Code on the Subsoil of the Kazakh SSR of 1976, nor the Code on the Subsoil and Processing of Mineral Raw Materials of 1992, nor the Law on the Subsoil of 1996, nor the Law on the Subsoil of 2010. the term "subsurface space" was not defined or used in any way, using only such concepts as "underground structures not related to mining", "underground structures for other purposes", "construction and (or) operation of underground structures not related to exploration and (or) mining" Only once did the 1992 Code on Subsoil and Processing of Mineral Raw Materials mention the "space of the subsoil", which, in the meaning of the relevant provision, meant, first of all, mining workings and voids formed as a result of mining.

Thus, the previous legislation did not use the concept of subsurface space as a subsurface resource, as is the case in the Subsurface Code, but referred to the immediate facilities and structures, the use and/or construction of which was or was not related to subsurface use in the form of exploration or extraction of minerals, but, at the same time, assumed the implementation of certain economic activities within the spatial framework (limits) of the subsurface.

2. In paragraph 2 of Article 10 of the Subsoil Code, subsurface space is recognized as an independent resource for the use of subsurface resources, along with minerals and man-made mineral formations. Confession

subsurface space by a separate type of subsurface resources requires its differentiation from other types of resources, which can be achieved by defining such a concept, indicating its features, goals, forms and ways of using the specified resource.

Based on the above, the regulatory purpose of the article being commented on is to define the concept and general characteristics of the subsurface space, which implies its use as an environment for people to stay, place objects of industrial, scientific and other activities, including use as an environment for practical processes.

In order to get a more detailed idea of the content of the term "subsurface space", it is necessary to address the issue of the pre-existing understanding of what exactly is included in the subsurface and its resources, as well as briefly define the relationship between the concepts of "subsurface" and "subsurface space" as a "spatial property of the subsurface". On the one hand, it was believed that only the minerals contained in them were subsurface resources, whereas another approach assumed that any penetration into the depths of the subsurface for the construction and placement of certain objects under the surface of the earth should also be considered the use of subsurface resources.

There is no doubt that the main economic interest of the subsoil is primarily as a source of extraction of the minerals contained therein. It is the presence of the latter that primarily attracts the main attention of a person and determines his main economic activity in relation to the subsoil. At the same time, one cannot but agree that the right of state ownership extends not only to the minerals themselves, as some useful substances located in the subsurface, but also to all the subsurface as a whole, which are located below the earth's surface and represent a well-defined part of the natural environment. In this sense, any part of the subsurface, including waste rock, thermal energy, voids, etc., is a material object of state ownership of the subsurface. Only such an understanding provides the basis for defining the State's ownership of mineral resources as complete and exclusive.

In this regard, it is no coincidence that in the framework of the discussion on the boundaries (limits) of the subsoil, it was rightly argued that the subsoil is "in principle a three-dimensional concept" and it should be extended not only to minerals and other named material objects, but also to the space located below the soil.

In the case of its absence, it extends to the space below the earth's surface, the bottom of reservoirs and watercourses, which is reflected in Article 10 of the Subsoil Code. At the same time, the concept of "subsoil", defined in the Subsoil Code, almost completely repeats the definition given in the previously valid 2010 Law on Subsoil, where, as is the case now in the Subsoil Code, the part of the earth's crust located below the soil layer, and in its absence - below the earth, was recognized as subsoil. surfaces and bottoms of reservoirs and watercourses. However, unlike the Subsoil Code, the previous legislation did not provide a precise definition of "subsoil resources". For the first time, the Subsurface Resources Code describes the types of resources and what exactly applies to them. Thus, the commented article contains a definition of what is one of the types of subsurface resources specified in the Subsoil Code, namely the subsurface space, and also defines the main purposes of using this resource.

The most representative objects of space can be, first of all, naturally occurring or artificially created cavities of the subsurface, as well as other areas of the subsurface suitable for the above-mentioned purposes, within which there are no mineral deposits and man-made mineral formations. At the same time, it should be noted that the previously valid 2010 Law on Subsoil also regulated relations in connection with the use of subsoil in the form of natural or artificial cavities or structures located in them. Thus, its regulation covered the construction and (or) operation of underground structures not related to exploration or production, as one of their types of subsoil use rights. In particular, Article 44 of the 2010 Law on Subsurface Resources stated that the conditions and procedure for the implementation of this type of subsurface use are determined by a contract to which the relevant provisions of the 2010 Law on Subsurface resources related to mining were applied. Moreover, this provision was the legal basis for the relevant Order of the Minister of Investment and Development of the Republic of Kazakhstan dated January 30, 2015 No. 94 "On Approval of the Rules for Granting the Right of Subsurface Use for the Construction and (or) Operation of underground structures not related to exploration or production, as well as the specifics of the construction and (or) operation of underground structures not related to exploration or production", which has now become invalid due to the entry into force of the Subsoil Code. The contracts concluded in accordance with these Rules gave the right to construction and (or) operation.:

1) underground or buried below the soil layer structures for storing oil and gas, with the exception of gas stations;

2) tunnels, subways, underground overpasses and engineering structures with a depth of more than three meters;

3) structures designed to inject groundwater into the subsurface for artificial replenishment of reserves;

4) tailings dumps buried below the soil layer, sludge storage facilities for the burial and storage of solid, liquid and radioactive waste, harmful toxic substances and the discharge of wastewater and industrial water into the subsoil.

Thus, the construction and operation of the listed facilities were specific uses of subsurface space that were subject to the 2010 Law on Subsurface Resources, although this legislative act and the by-laws adopted on its basis did not even contain a mention of "subsurface space". In addition, this Law, as well as the 1996 Law on Subsoil and the 1995 Oil Law, provided for regulations on the construction of underground structures related to exploration and production.

In contrast, the Subsurface Code uses the concept of "subsurface space", which covers not only certain cavities (voids) located or specially created underground, but also the entire volume occupied by the subsurface as a whole as part of the natural environment. Thus, the subsurface resource that is the object of use is precisely the spatial property (volume) of the subsurface, with the exception of the space occupied by deposits in respect of which promising mineral reserves have been identified or are available (with the exception of common ones), or within which there are areas of domestic drinking water, as well as subsurface volumes that include in areas where conducting operations on subsurface use is prohibited by the Code on Subsurface Resources.

In this regard, it would be quite appropriate to draw the following analogy: both the gas mixture, called "air", is enclosed in a volume called "airspace", and the "subsoil", located in a certain space in the form of "a part of the earth's crust located below the soil layer, and in its absence – below the earth's surface, the bottom of reservoirs and watercourses", fill the corresponding volume under the soil layer, which is the "subsurface space" and represents the "three-dimensional spatial property of the subsurface".

3. The commented article defines the concept of "subsurface space", which is referred to as subsurface resources in Article 10 of the Code on Subsurface. It is envisaged that the subsurface space is a three-dimensional spatial property of the subsurface, which, taking into account geotechnical, geological, economic and environmental factors, can be used as an environment for the placement of industrial, scientific or other activities.

It follows from the above definition that this concept refers to the properties of the subsurface. At the same time, this property is characterized as a three-dimensional spatial property of the subsurface. The specified property of the subsurface assumes the characterization of this space by such dimensions as length, width and height.

It follows from the commented article that the three-dimensional spatial property of the subsurface allows using the subsurface space as an environment for the placement of industrial, scientific or other activities, taking into account geotechnical, geological, economic and environmental factors.

The Subsoil Code defines the regime for the use of subsurface resources, the specifics of the emergence, exercise and termination of rights to subsurface areas, the legal status of subsurface users and their conduct of relevant operations, as well as issues of the use of subsurface and disposal of the right of subsurface use and other relations related to the use of subsurface resources.

At the same time, it should be noted that the Subsoil Code regulates two types of use of subsurface (subsurface area): 1) in the mode of subsurface use rights; 2) in the mode of extraction of OPI for purposes not related to entrepreneurial activity. At the same time, the right of subsurface use is an opportunity to use the subsoil for entrepreneurial purposes, while the extraction of OPI for purposes not related to entrepreneurial activity is carried out by land owners and land users within the boundaries of their land plots. Meanwhile, the goals of using the three-dimensional spatial properties of the subsurface in the commented article are not limited to entrepreneurial goals. In this regard, it should be assumed that the definition of "subsurface space" in the commented article also applies to other relations regarding the use of these subsurface properties that are not related to subsurface use operations.

4. The scope of application of the commented norm is determined by the fact that the subsurface space is one of the subsurface resources that can be

It is used in the implementation of not only such a special type of subsurface use operations as the use of subsurface space, but also other types of subsurface use operations in which the spatial framework of the subsurface area defines the boundaries of such operations.

At the same time, the provisions of the commented article are general provisions characterizing the spatial property of the subsurface. Since the concept of "subsurface space" is defined as a three-dimensional spatial property of the subsurface, the scope of application of this provision, at first glance, is limited to such an object as the subsurface, which, as is known, is the object of only state property rights. At the same time, the commented article contains provisions on the purpose of using the three-dimensional spatial properties of the subsurface as an environment for the placement of industrial, scientific or other activities. These types of uses of the specified property of the subsurface are carried out not so much by the subject of ownership of the subsurface, but by legal entities and individuals, in particular, subsurface users and other entities that use the spatial properties of the subsurface.

Based on the above, we believe that the scope of the commented article is not limited to property relations. The provisions of the article also apply to other rights that use the spatial property of a part of the subsurface. In particular, we are talking about the use of the spatial property of the subsurface (part of the subsurface) by subsurface users and other entities within the framework of their subsurface use rights or other rights to use the space located below the soil layer. Thus, it should be borne in mind that the specified property of the subsurface (part of the subsurface) can be used as an environment for hosting not only production facilities, but also scientific or other activities. The subjects of such use may be not only subsurface users. However, the provisions of the Subsoil Code, which relate to subsurface use operations, are not applicable to other entities. When using the spatial properties of the subsurface (part) of the subsurface in carrying out activities that do not relate to subsurface use operations, the relevant relations relate to the sphere of regulation of other legislation (Civil Code of the Republic of Kazakhstan, PK RK, legislation on architectural, urban planning and construction activities, on main pipelines, on permits and notifications, etc.).

The attribution to the sphere of regulation of the commented article of relations for the implementation of various types of subsurface use operations is due to the fact that the use of the three-dimensional spatial property of the subsurface, or rather, part of the subsurface, is inextricably linked with such operations.

It should be noted that in the Subsoil Code, the use of subsurface space is defined as one of the types of subsurface use operations. Along with this, the Subsoil Code regulates the procedure and specifics of the use of spatial boundaries of subsurface areas in the implementation of other subsurface use operations.

The spatial boundaries of the subsurface area are formed by closed contours (boundaries) on the earth's surface (the territory of the subsurface area), and the depth forming the upper and lower spatial boundaries. Thus, the outer boundaries of the territory of a subsurface area for mining operations (mining area), for prospecting (mining area) and the use of subsurface space (subsurface space use area) should form a rectangle. At the same time, if the natural features or boundaries of another subsurface area do not allow defining the territory of the corresponding area in the form of a rectangle, the territory of such a subsurface area may have the shape of a quadrilateral, the two opposite sides of which must be parallel to each other.

The stated rules are based on the concept of Article 16 of the Subsoil Code on the three-dimensional spatial property of the subsoil. Accordingly, the provisions of the commented article are basic and define the legal regime for the use of the spatial property of the subsurface (part of the subsurface) in the implementation of subsurface use operations.

For example, the Subsoil Code regulates in great detail the issue of territories provided for operations on the use of subsurface space. Information about subsurface areas provided, including for the use of subsurface space, is contained in the Unified Cadastre of the State Subsurface Fund, where information about subsurface objects includes data on the coordinates of the location and characteristics of the subsurface cavity, the possibility of placing production, economic and other objects and substances in them, the implementation of technological and other processes.

In order to use the subsurface space, the authorized body for the study of subsurface resources, in accordance with the procedure defined by the Subsurface Code, issues a license to conduct one of the following subspecies of operations:

1) placement and operation of underground oil and gas, gas and petroleum products storage facilities at a depth below five meters from the earth's surface;

2) placement and (or) operation of underground places (structures) for storage or burial of solid, liquid and radioactive waste, harmful toxic substances, discharge (injection) of sewage, industrial and technical waters into the subsoil;

3) injection of water into the subsurface for artificial replenishment of groundwater reserves, including the construction and (or) operation of underground structures intended for these purposes;

4) placement and (or) operation of facilities for the placement of man-made mineral formations of mining and (or) mining and processing industries.

It should also be noted that now, in accordance with the Subsoil Code, the owner of one or more licenses for the exploration of solid minerals, the areas of the subsoil of which have common borders (adjacent areas), has the exclusive right, among other things, to obtain a license to use the subsoil space in cases of the absence of a mineral deposit or the insignificance of its resources, confirmed a report on the results of geological exploration by also applying to the authorized body for the study of subsurface resources with an application for the issuance of such a license. The Code also contains a number of other rules based on the provisions of the commented article, which regulate other issues of the use of subsurface space.

5. A comparison of the subspecies of operations for the use of subsurface space provided for by the Code on Subsurface Resources suggests that the Subsurface Code almost completely repeats the 2010 Law on Subsurface Resources, as well as the "Rules for Granting Subsurface Use Rights for the Construction and (or) Operation of underground structures not related to exploration or Production" adopted on its basis and mentioned above. as well as the specifics of the construction and (or) operation of underground structures not related to exploration or production." The only difference is that the Code on Subsurface Resources excludes from the previous list of operations the construction and (or) operation of tunnels, subways, underground overpasses and engineering structures with a depth of more than three meters, instead of which the list includes "placement and (or) operation of facilities for the placement of man-made mineral formations of mining and (or) mining and processing industries".

It is easy to see that in both cases, the legislator, referring to specific actions for the use of subsurface space, lists operations related to the use of certain cavities (volumes, voids) located below the soil layer, which may be of natural or artificial origin and used for purposes not directly related to exploration or mining. At the same time, these operations are almost identical in both cases, except for a separate non-fundamental difference between them.

In this regard, it is quite natural to ask how justified is the allocation of the subsurface space by the Code of the Subsoil as a new separate concept and resource of the subsoil, if in the previous period the legislation and practice of its application completely dispensed with considering these operations regardless of such a concept as "subsurface space". How does the introduction of this new concept, which designates a separate and special resource of the subsurface, serve as a theoretical and legal justification for those specific types of operations that have long existed and were practically carried out before the introduction of the Subsurface Code and continue to be implemented in an almost unchanged form on the basis of the Subsurface Code?

Moreover, it should be borne in mind that the objects of use for the purposes of subsurface use are such objects as subsurface areas, including for the placement of underground structures. When used in this way, the three-dimensional spatial property of the subsurface area is important, not the subsurface as a whole.

Taking into account the above, it should be assumed that it is in the answers to these questions, first of all, that the prospects for further theoretical substantiation and improvement of the commented article consist.

Another direction of such improvement may be to clarify the boundaries of the possible application of the norm in question. In the commented edition, it assumes the possibility of using the subsurface space as a resource as an environment for the placement of industrial, scientific or other activities. Meanwhile, the Subsoil Code in Chapter 33 contains provisions regulating only production activities, while other types of activities remain outside the scope of regulation by the Code. Thus, it is obvious that the regulatory boundaries established by the commented article are potentially broader than those specifically defined by the individual norms of the Special Part of the Code on Subsoil. However, it is quite conceivable, for example, that in the future

The Subsurface Code can be expanded and supplemented with norms regulating the procedure for operations involving the use of geothermal resources of the subsurface, therapeutic mud and mineral waters, etc., which will also become guidelines for the use of subsurface space, but only from the moment when the Subsurface Code applies to these operations. That is why the commented article, as it seems, should be supplemented with a concretizing indication that the directions of using the subsurface space in the form of industrial, scientific or other activities it establishes should be carried out "in accordance with the procedure and under the conditions determined by the Code."

Another alternative direction for improving the provisions of Article 16 of the Subsoil Code, taking into account the fact that the purposes of using the subsurface space are not limited to the sphere of subsurface use, may be that the article may provide for reference norms to other legislation, according to which the three-dimensional spatial property of the subsurface can be used for purposes not related to subsurface use.

Another direction of such improvement may be to clarify the boundaries of the possible application of the norm in question. In the commented edition, it suggests the possibility of using the subsurface space as a resource as an environment for the placement of industrial, scientific or other activities. Meanwhile, the Subsoil Code in Chapter 33 contains provisions regulating only production activities, while other types of activities remain outside the scope of regulation by the Code. Thus, it is obvious that the regulatory boundaries established by the commented article are potentially broader than those specifically defined by the individual norms of the Special Part of the Code on Subsoil. However, it is quite conceivable, for example, that in the future

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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