ASTANA, Kazakhstan, April 25. Over the past two years, a number of changes have been made to the Code on Subsoil and Subsoil Use, said Vice Minister of Energy of Kazakhstan Askhat Khassenov, Trend reports.
"We designed a new mechanism dubbed the Improved Model Contract, which includes a number of regulatory and fiscal preferences. This applies to complicated projects with high reservoir pressure, hydrogen sulfide content, depth, and so on," he said.
According to him, five contracts have already been concluded under this mechanism.
"Previously, companies did not want to develop these fields due to economic unprofitability. However, thanks to the Improved Model Contract, today $9 billion in relevant contracts have been signed," he noted.
Khassenov also noted that the formal criteria for submitting auctions have been simplified.
"Thanks to this, there is interest in competition in the field of subsoil use. Compared to the auctions of 2021 and 2022, the subscription bonus has increased by 1.5 times. From 12.8 billion tenge (about $28.7 million) to 32 billion tenge (about $72 million).
As he pointed out, against the backdrop of all this, the volume of investment in geological exploration is growing.
"At the end of 2023, 152 billion tenge (about $341.7 million) of investment was attracted to geological exploration," Khassenov said.
Meanwhile, in line with the instructions of the President of Kazakhstan, more appealing tax and regulatory incentives for exploration and gas projects (the Improved Model Contract, or IMC) have been implemented starting in 2023. IMC encompasses offshore and gas projects, along with complex onshore production projects.
On February 6, 2023, Kazakhstan marked a significant milestone by signing its inaugural contract for hydrocarbon production under the terms of the IMC for the Kalamkas Sea, Khazar, and Auezov projects, set to be undertaken in collaboration with a strategic partner.