Amendments adopted by Majilis to improve investment attractiveness of oil industry — PetroMining Association

Today, November 15, amendments to the Code "On Subsoil and Subsoil Use" aimed at attracting investment in the development of exploration and production of hydrocarbons, streamlining procedures for state examination of basic project documentation, reducing financial and administrative costs of subsoil users were adopted at the plenary session of the Majilis in the second reading, the message in the Majilis official Telegram-channel reads.
"From our perspective, these amendments, which were developed by the Ministry of Energy of the RK together with MPs, associations and oilmen, are really aimed at boosting the investment attractiveness of the industry. For instance, subsoil users will have the right to refuse to drill wells with no mineral resources, that is, they will be exempt from fines. This is in fact a great relief. Because each subsoil user spends from US$ 500 thousand to US$ 5 million to drill one well, depending on various parameters. That is, they are taking a certain risk. If the well was empty, the developer was penalized, but now the draft law provides for exemption of business representatives from this punishment," explains Sayat Boranbekov, President of the PetroMining Association.
80 MPs voted for the adoption of the draft law.

Furthermore, in order to maintain the effective exploitation of old fields, the "depleting field" criterion and a new contractual obligation — "investment obligation of a subsoil user" — are introduced.
"We strongly support the direction the government is taking in terms of incentivizing the development of depleting fields. The production by national oil producers has fallen by 17% over 5 years. The measures taken will assist in halting the dynamics of the industry's decline," stresses Jaromir Rabai, Executive Director of the PetroMining Association.