LAW OF THE REPUBLIC OF KAZAKHSTAN

of June 28, 1995 No. 2350

About oil

Chapter 1. General provisions

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) affiliirovanny persons - the affiliated organizations of the subsoil user and the organization having the block of shares or share in the authorized capital of the organization which is the contractor on carrying out oil operations in the Republic of Kazakhstan;

2) investigation - any transactions which are connected with search and investigation of oil and include:

geologic-geophysical researches;

structural drilling;

drilling of search and exploratory wells, and also test operation of the field which is in investigation;

3) the block - the subsoil plot intended for provision to the contractor for carrying out oil operations and designated as the block on specially prepared card of blocks;

4) the coastline - the line of the coast of water object which is formed as a result of the maximum inflow (high water);

5) the coastal states - the adjacent and opposite states of basins of the Caspian and Aral seas (lakes);

6) authorized body on studying and use the nedrgosudarstvenny body performing regulation in the field of geological studying, rational and complex use of subsoil;

7) the contract - the contract between the contractor and competent authority for carrying out oil operations;

8) the contract area - the territory determined by geological and (or) mountain branch in which the contractor has the right to perform the oil operations determined by the contract;

9) the field - one or several natural accumulations of hydrocarbons in the geological reservoir of any type;

10) positive practice of development mestorozhdeniyobshcheprinyaty world practice of carrying out oil operations which is oil operations, rational, safe, effective and necessary in case of carrying out;

11) test operation of fields - the work on refining which is available and to receipt of the additional information about geological physical characteristic of layers, conditions of bedding of hydrocarbons, productivity of wells, testing of new or earlier known technologies of oil recovery and gas;

12) commercial detection - detection in the contract area of one or several fields, profitable for development;

13) competent authority - the state body determined by the Government of the Republic of Kazakhstan and acting on behalf of the Republic of Kazakhstan in implementation of the rights connected with state regulation when carrying out oil operations, the conclusion and execution of contracts;

14) the bulk distribution line - the engineering construction consisting of linear part and land objects integrated to it, communications, telecontrol and communication, intended for oil transportation from the pipeline of the contractor to places of transfer on other mode of transport, conversion or consumption. The pipeline working in the mode of combined collector does not belong to the bulk distribution line;

15) the contractor - the physical person or legal entity which signed the contract for carrying out oil operations with competent authority;

16) oil - crude oil, gas condensate and natural gas, and also the hydrocarbons received after purification of crude oil, natural gas and processing of combustible slates or resinous sands;

17) oil and gas pipelines - the pipelines intended for oil transportation including the bulk distribution lines, pipelines working in the mode of combined collector and also the equipment and mechanisms on cleaning, separation and liquefaction of the substances transported through system of pipelines or its separate parts, the control system and isolation, system of electrochemical protection and other equipment intended for servicing of such pipelines;

18) construction and (or) operation of oil and gas pipelines - any works (transactions) which are carried out for the purpose of construction, laying and operation of oil and gas pipelines on the land, the rivers, lakes, the seas and other internal reservoirs;

19) passing components in oil - the minerals and different connections containing in oil and reservoir waters, technologically requiring their extraction;

20) construction and (or) operation of underground storage warehouses and reservoirs of oil and gas - any works connected with construction and (or) operation of underground oil and gas storages and reservoirs;

21) oil operations - the works on investigation, production, construction and (or) operation of underground storage warehouses and reservoirs of oil which are carried out on the land within the rivers, lakes and other internal reservoirs, and also oil operations at the sea;

22) the national company on carrying out oil operations (further - the national company) - the joint-stock company created according to the decision of the Government which single shareholder is the national managing holding, performing oil operations on the conditions established by this Law;

23) the operator - the legal entity created or determined according to the legislation of the Republic of Kazakhstan contractors by the written notice of competent authority exercising operational management of activities and the uchetnootchetny transactions connected with execution of the contract for which actions the contractor bears property responsibility to the state;

24) production - any transactions which are connected with oil recovery on surface and include including:

construction and operation of underground and land industrial equipment and constructions, including from the pipeline of the contractor for oil transportation from the place of production to the place of transfer in the bulk distribution line and (or) on other mode of transport;

oil recovery on surface, the organization and maintenance of working process in operational wells;

processing and purification of oil of mechanical impurity and reservoir water;

extraction of passing components from oil, and also utilization of natural and associated gas;

utilization of boring slime in underground layers;

25) safety zone - the zone stretching from the coastline of the sea for five kilometers towards sushi in the territory of the Republic of Kazakhstan;

26) the strategic partner - the Kazakhstan or foreign legal entity (their associations) chosen or determined by the national company in coordination with competent authority based on the criteria provided by the Law of the Republic of Kazakhstan "About subsoil and subsurface use" for the choice of the contractor by projects implementation under the contracts signed following the results of direct negotiations between the national company and competent authority or according to the international treaties ratified by the Republic of Kazakhstan;

27) natural gas - hydrocarbons which are in gaseous phase at normal atmospheric temperature and pressure, including fat gas, dry gas, the associated gas remaining after extraction or separation of liquid hydrocarbons from fat gas and not hydrocarbon gas extracted together with liquid or gaseous hydrocarbons;

28) utilization of natural and associated gas - providing on the field of trade collection of natural and associated gas for the purpose of its use for technological needs and (or) its preparation to commodity product;

29) the sea - surface and thickness of water, and also bottom of the Caspian and Aral seas within the Kazakhstan part of the Caspian and Aral seas (lakes);

30) the best practice on environmental protection on the moreobshcheprinyaty international practice of carrying out oil operations at the sea which is creating the lowest level of pollution of the sea or completely excluding pollution of the sea;

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