Presentation
Platform for Business Discussion
Rashid Gaissin
The III Annual Forum of Kazakhstan’s Subsuface Users was held in late April in Almaty on the theme: «Problems of legislation and right-applying practice in the subsuface use sphere in the Republic of Kazakhstan». About its results in an interview to Petroleum say Rashid Gaissin, managing partner of Grata Legal Firm, and representatives of Herbert Smith international law firm.
- Rashid, what was the scale of the 3-d Annual Forum of Subsurface Users?
- The Third Annual Forum of Subsurface Users of Kazakhstan was held on April 29 in Almaty city, as it was planned. The event was initiated by «GRATA» Law Firm in association with «Herbert Smith», an international law firm.
The Forum again was joined by subsurface users of oil and gas, and mining industries. I would like to note that the number of participants is only increasing with every new Forum. So in 2010 the Forum was attended by 140 delegates and in 2011, as we expected, there were more than 200 participants! It indicates the urgency and the relevance of the issues discussed.
The goal of our firm was to create a field for free exchange of views. I was instructed to be a moderator of one of four sections.
- What debatable topics were raised at the Forum?
- The content of the Forum was diverse. The topics of the sections covered the issues of legislation and law enforcement in the field of subsurface use, problematic issues of local content, environmental control, debt financing, taxation and transfer pricing. This year the Forum quite differed from the meetings of last years.
In 2010 within the bounds of the session, dedicated to the investment climate in the State, we examined the project of a new Law «On Subsoil and Subsoil Use». This time subsurface use companies met to describe issues which have occurred after adoption of the Law, which, it should be noted, is the legal basis of the whole subsurface use field.
Nadim Khan
Also it should be mentioned that at the last Forum the main question, that concerned delegates, was an ability to settle a dispute in an international arbitration. This time the subsurface users focused on the issue of local content. The issue of local content is the most important for foreign investors.
This problem should be examined from both sides: from the State’s side and from the investors’ side. The State takes care of local market and employment of the population, but the investors also can be understood. At times, they have difficulties with finding skilled specialists; suitable equipment is not produced in Kazakhstan and etc.
For instance, Odd Magne Instefjord, Director General of Statoil Kazakhstan, considers that national suppliers often do not fulfill their obligations in a full manner. In the first place, it impedes to their development. In order to solve the problem, Odd offers, first, to stimulate foreign companies to purchase services of national suppliers and, second, to establish joint ventures for the effective work. Also during the discussion it was found out that new Law «On Subsoil and Subsoil Use» has faults.
Tapanov Aslan, Director of the Analysis of the local content Department of the «Contract Agency» Branch under the Ministry of Oil and Gas of the Republic of Kazakhstan, did not exclude that the new Law will soon need amendments. Zhumangarin Serik Makashevich, First Deputy Chairman of board of National Agency on Local Content Development «NADLoC» JSC, assured the delegates that the State is going to establish several engineering companies.
Edward Baring
- Have you achieved the purposes of the Forum?
The purpose of the 3-d Annual Forum was to create a «platform» for business discussion of the issues of applying of the legal base in the subsurface use field. Judging by the amount of the companies which took part in the Forum, and by the way the delegates commented on speaker presentations, I can say with certainty that we did achieve our purpose. We invited speakers from competent state bodies and from subsurface use companies. The participants actively spoke about the things they had to face with during their work. The representatives of state bodies and companies, in their turn, shared with their experience and told about new amendments to the subsurface use legislation. It created an effective discussion field between business and state structures, where both parties could not only to hear each other, but also to try elaborate concerted actions for dealing effectively with emerging problems. Everyone had a possibility to express his or her opinion and many took advantage of this opportunity.