Draft Law of the Republic of Kazakhstan Concerning production sharing for conducting off-shore petroleum operations

Draft

Law of the Republic of Kazakhstan Concerning production
sharing for conducting off-shore petroleum operations

This Law shall establish the legal and economic fundamentals for the interaction of contractors and the state on production sharing terms for the purposes of attaining a balance of interests of parties and for the formation of conditions for coordinated development of all sectors of the Republic of Kazakhstan economy.

CHAPTER I. GENERAL PROVISIONS

Article 1. Scope of This Law

1. This Law shall regulate relations associated with the granting of the right to conduct petroleum operations in the Kazakhstan Sector of the Caspian Sea and in the Aral Sea, when concluding, implementing and terminating Production Sharing Agreements in the petroleum sector and it shall define the fundamental legal provisions for such Agreements as well as for subsequent distribution of production between the Republic of Kazakhstan and the contractor.

2. Relations which are formed by contractors in the course of combined exploration and production or production of hydrocarbon raw materials, sharing of production as well as in its transportation, processing, storing, using, marketing and any other disposal, shall be regulated by Production Sharing Agreements to be concluded in accordance with this Law.

Article 2. The Republic of Kazakhstan Legislation Concerning Production Sharing

1. The Republic of Kazakhstan legislation concerning Production Sharing Agreements shall be based upon the Republic of Kazakhstan Constitution and it shall consist of the provisions of the present Law, legislative acts concerning the subsurface and its use and petroleum and other laws and regulatory legal acts of the Republic of Kazakhstan.

2. Where legislative acts establish other rules for the conclusion, use and termination of Agreements, than those specified by this Law, the rules of this Law shall apply.

3. Relations which have not been settled by this Law shall be regulated by legislative acts concerning subsurface, subsurface use and petroleum.

4. The principles, terms and definitions of the legislation concerning subsurface and subsurface use as well as petroleum, which do not contradict the provisions of this Law, shall apply to Production Sharing Agreements.

5. The rules of the civil legislation of the Republic of Kazakhstan shall apply to rights and obligations of Production Sharing Agreements parties, having civil law character, which are not covered by this Law and civil acts in the sphere of subsurface use.

6. Where an international agreement ratified by the Republic of Kazakhstan specifies by other rules than those contained in this Law, there the rules of the international agreement shall apply.

Article 3. Items