Caspian Technical Conference
The subsoil use right online
By the end of the year, Kazakhstan will conduct the first electronic auction for granting the right to subsoil use.
In digital format
The legal basis for the innovation is the new Code on subsoil and subsoil use, which came into effect in June 2018, which established the first-come, first-served principle to attract investors to geological exploration. In practice, this means that a company that has discovered a new field automatically gets priority right to develop it.
Since the entry into force of the new Code, more than 600 licenses have been issued, implying the transfer of priority subsoil use rights to their holders in the event of the discovery of new assets. In February of this year, the Minister of Ecology, Geology and Natural Resources of Kazakhstan, Magzum Mirzagaliyev, said that 10 new fields might be discovered in the country this year, including 7 in the mining sector, and the remaining 3 in the hydrocarbon raw materials.
"The introduction of electronic auctions will create a transparent mechanism for conducting auctions in electronic form, and will also have a positive impact on improving the competitive environment," – the Ministry of Energy commented in August on the entry into force on September 1 of legislative amendments providing for electronic distribution of subsoil use rights.
Information on all 82 areas of fields identified by the State for implementing the right to develop in 2020, by September 1, is available on the portal of electronic auctions in the form of an interactive map of Kazakhstan (at traderesources.gosreestr.kz). The algorithm is accessible and simple to understand for any auction participant. It is vital that each area shows its status, for example, whether it is put up for auction or not.