COMMENTARY TO ARTICLE 30. TYPES OF SUBSURFACE USE LICENSES TO THE CODE OF THE REPUBLIC OF KAZAKHSTAN "ON SUBSURFACE AND SUBSURFACE USE"
Taking into account the type of subsurface use operations, the following subsurface use licenses are issued:
1) license for geological exploration of subsurface;
2) license for exploration of solid minerals;
3) license for extraction of solid minerals;
4) license for the extraction of common minerals;
5) license for the use of subsurface space;
6) a prospecting license.
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(M.B.Telemtaev, M.A. Ibragimov)
1. The license regime for subsurface use introduced by the Subsoil Code applies to most subsurface use operations, excluding exploration and (or) production of hydrocarbons and uranium mining, for which the Subsoil Code, by analogy with previously existing legislative acts on subsurface use, provides for the conclusion of relevant contracts. Now, the legal basis for the right to conduct subsurface use operations, which are listed in the commented article, is the corresponding license issued by one or another state body, in accordance with the procedure and conditions established by the Subsoil Code.
The commented article contains an exhaustive list of types of licenses, the granting of which is regulated by the Code on Subsoil and underlies the right of the subject to conduct relevant operations on subsoil use.
2. A license for the geological study of subsurface resources grants its holder the right to carry out geological survey and (or) geophysical work on the relevant subsurface area, as well as prospecting and evaluation work for groundwater. This license is issued by the authorized state body for the study of subsurface resources for a period of three years, during which the subsurface user has the right to conduct relevant operations. The specified period of validity of the license is not subject to renewal, so after the expiration of this period, the license is terminated, and therefore the corresponding right of subsurface use is terminated.
It is important to keep in mind that, unlike licenses for exploration or production of mineral resources, including OPI, as well as licenses for the use of subsurface space and mining licenses, a license for the geological study of subsurface does not grant its holder the exclusive right to a geological study site, except in cases where a decision of the Government of the Republic of Kazakhstan establishes otherwise. The absence of such exclusivity means that, as a general rule, operations for the geological study of subsurface in the same area can be carried out simultaneously by several subsurface users under different licenses, and in cases with other operations under other licenses, holders of exploration or production licenses enjoy priority when conducting subsurface use in a particular area of the subsurface, and There are also licenses for the use of subsurface space or prospecting.
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.
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 has the exclusive right to obtain licenses for the extraction of TPI or OPI found within the exploration area or licenses for the use of subsurface space located within the exploration area, then the license for the geological study of subsurface does not have such rights to its holder. provides.
3. Under a TPI exploration license, its owner has the exclusive right to use a subsurface area for the purpose of conducting TPI exploration operations, including the search for TPI deposits and the assessment of their resources and reserves for subsequent production.
An exploration license is issued by the competent authority regulating the field of TPI operations for a period of six consecutive years. At the request of the subsurface user, the specified period may be extended once for a period of up to five consecutive years.
An important feature of the TPI exploration license is that, as mentioned above, at any time of the license's validity, if a deposit is discovered within the exploration area, the subsurface user has the exclusive right to obtain, among other things, a license to extract TPI from this field. This exclusive right of the holder of a TPI exploration license should therefore be distinguished from the exclusivity of the right to use a subsurface area, which is characteristic of both exploration licenses and licenses for the extraction of TPI and OPI, as well as licenses for the use of subsurface space and licenses for prospecting.
The presence of such an exclusive right from a subsurface user conducting exploration gives him firm confidence in the validity and justification of exploration costs and the ability to continue work by proceeding to production at the discovered field if his exploration operations are successful.
4. A mining license grants its holder the right, on an exceptional basis, as is the case with an exploration license, to use a subsurface area for the purpose of conducting operations for the actual extraction (extraction) mining operations, as well as the use of subsurface space for mining operations, the location of mining and (or) mining and processing industries, man-made mineral formations, as well as for conducting operational exploration within the mining area.
A mining license is issued by the competent authority regulating the field of mining operations for a period of no more than twenty-five consecutive years. At the request of the subsurface user, the specified period may be extended for a period not exceeding the initial license period. At the same time, the number of such extensions of the mining license is not limited by the Subsoil Code. This procedure consistently guarantees the subsurface user the possibility of a continuous production period, limited in fact only by the amount of resources and reserves of the deposit available for profitable production operations.
5. A set of rights that is largely similar in comparison with a mining license is granted to a subsurface user by an OPI mining license. Its owner also has the exclusive right to use the subsurface area not only for the purpose of mining OPI, but also to use the subsurface space available within the mining area for mining operations, the location of mining and (or) mining and processing production, man-made mineral formations, as well as to conduct exploration of the mining area (operational exploration).
The license for the extraction of OPIUM is issued by the local executive body of the region, the city of republican significance, the capital for a period of no more than ten consecutive years. The possibility of extending the specified period is not provided for by the Subsoil Code.
6. The license for the use of subsurface space grants the exclusive right to use a subsurface area for the purpose of conducting operations such as the placement and operation of underground oil and gas, gas and petroleum products storage facilities, the placement and (or) operation of underground facilities for the storage or disposal of waste, harmful toxic substances, wastewater, industrial and technical waters, water injection into the subsurface to replenish groundwater reserves, the placement and (or) operation of facilities for the placement of man-made mineral formations of mining and (or) mining and processing industries.
A license for the use of subsurface space is issued by the authorized body for the study of subsurface resources for a period of no more than twenty-five consecutive years. As in the case of a mining license, the term of the license for the use of subsurface space may be extended at the request of the subsurface user for a period not exceeding the initial license period. At the same time, the number of license extensions is not limited, which makes it possible for a subsurface user to plan their activities for any future and use the corresponding subsurface area for almost unlimited time.
7. A mining license grants its holder the exclusive right to use a subsurface area for mining operations for precious metals and precious stones, the list of which is determined by the Law of the Republic of Kazakhstan "On Precious Metals and Precious Stones", at placer deposits and deposits of a man-made nature (dumps and deposited waste from mining and metallurgy). Such activities can only be carried out manually or with the use of mechanization and other low-power equipment.,
including stripping, sand and soil washing, and other related work.
A prospecting license is issued by a local executive body for a period of three years. At the request of the license holder, the specified period, in the absence of restrictions defined by the Subsoil Code and the presence of stipulated conditions, is subject to extension once for three years.
Unlike other licenses, mining licenses have significant features, which consist in the fact that only citizens of the Republic of Kazakhstan can be holders of mining licenses. At the same time, one person may have only one mining license, and the transfer or encumbrance of the right of subsurface use (a share in the right of subsurface use) under a mining license is prohibited.
8. The provisions of the Special Part of the Code dealing with specific types of subsurface use licenses, namely exploration licenses, mining licenses, and mining licenses, as well as licenses for the use of subsurface space and prospecting, indicate the exclusive right of the holder of one or another of these licenses to carry out the relevant subsurface use operation. This exclusivity of the license holder's right to use the subsurface area provided to him primarily means that similar operations by other persons and under other licenses cannot be carried out on this subsurface area. As for the possibility of conducting other operations on a given subsurface area provided to a subsurface user under a license, including operations with respect to other subsurface resources and minerals, this possibility is regulated by special articles of the Special Part of the Subsurface Code, which define the procedure for issuing and territories allocated for certain specific operations.
For example, a license for exploration of mineral resources cannot be issued within the territory of a subsurface area used by another person to conduct operations for the extraction of hydrocarbons, without his consent, or within the territory of a subsurface area provided for operations for exploration and (or) production of mineral resources, for the use of subsurface space, etc.
Thus, the exclusivity of the rights of subsurface users who carry out various operations in relation to various subsurface resources and minerals, which is fixed and regulated by the Code, makes it possible to harmoniously combine the interests of license holders, streamline their relationships and ensure the stability of their use of the relevant subsurface areas.
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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
