LAW OF THE REPUBLIC OF KAZAKHSTAN

of December 29, 2022 No. 174-VII ZRK

About modification and amendments in some legal acts of the Republic of Kazakhstan concerning transport and subsurface use

Article 1. Make changes and additions to the following legal acts of the Republic of Kazakhstan:

1. In the Land code of the Republic of Kazakhstan of June 20, 2003:

Article 43 to add 1) with Item 1-3 of the following content:

"1-3. Provision of the parcels of land located on aerodrome environs, including provided according to Articles 43-1, 44, 44-1, 45 and 119-2 of this Code, and also acquisition of rights the parcels of land according to article 48 of this Code are performed taking into account restrictions, stipulated by the legislation the Republic of Kazakhstan about use of airspace of the Republic of Kazakhstan and activities of aircraft.";

2) in part one of item 4 of Article 115:

to replace words of "customs authorities" with the word of "customs";

add with words ", the automated stations of measurement";

Part one of Article 117 to add 3) with words ", except for the airfields used during the limited period no more than three months within year in case of the conclusion of the contract according to the legislation of the Republic of Kazakhstan with the owner or the land user (lessee) of the parcel of land";

The subitem 4) of Item 2 of Article 121 to state 4) in the following edition:

"4) aerodrome environs;".

2. In the Budget code of the Republic of Kazakhstan of December 4, 2008:

in the subitem 39) Item 1 of Article 49:

words", regulating use" shall be replaced with words "about use";

replace the word "activities" with the word of "activities".

3. In the Entrepreneurial code of the Republic of Kazakhstan of October 29, 2015:

Article 124-6 to add 1) with subitem 10-2) of the following content:

"10-2) develops and approves rules of calculation and payment of the temporary balancing payment, the stipulated by the legislation Republic of Kazakhstan about rail transport, in coordination with the central executive body performing management in the field of rail transport;";

18) parts one of Item 3 of Article 140 of the word "along the line" to exclude 2) in the subitem.

4. In the Code of civil procedure of the Republic of Kazakhstan of October 31, 2015:

5) parts three of Article 491 to add the subitem with words "(removals of the sunk property)".

5. In the Labor code of the Republic of Kazakhstan of November 23, 2015:

state Article 141 in the following edition:

"Article 141. Regulation of work of workers in the field of civil and experimental aviation

Work of workers in the field of civil and experimental aviation is regulated by this Code with the features provided by the Law of the Republic of Kazakhstan "About use of airspace of the Republic of Kazakhstan and activities of aircraft" establishing for:

1) the aviation personnel which are directly connected with safety of flights, including servicing of air traffic, special regulations of duration of the mode of working hours and time of rest.

Such special regulations can be also provided by other regulatory legal acts of the Republic of Kazakhstan taking into account international standards and standard rates in the field of civil and experimental aviation;

2) the aviation personnel and other workers reporting or mentioned in reports on aviation events special regulations of attraction to disciplinary and (or) financial responsibility;

3) aviation inspectors of authorized organization in the field of civil aviation the special regulations providing restrictions and types of authority punishments.".

6. In the Code of the Republic of Kazakhstan of December 26, 2017 "About customs regulation in the Republic of Kazakhstan":

1) of Item 7 of article 355 after the word of "property" to add subitem paragraph two with words "(removals of the sunk property)".

7. In the Code of the Republic of Kazakhstan of December 27, 2017 "About subsoil and subsurface use":

1) in Article 28:

add Item 1 with part four of the following content:

"Conditions of intra country value in personnel when carrying out transactions on difficult projects are determined by investigation and (or) hydrocarbon production taking into account provisions of article 36 of this Code.";

add Item 2 with part three of the following content:

"Provisions of this Item are not applied to contracts for investigation and (or) hydrocarbon production on difficult projects on the subsoil plots fully or partially located within the Kazakhstan sector of the Caspian or Aral Sea.";

2) in Article 36:

state heading in the following edition:

"Article 36. Form and content of the contract for subsurface use";

add with Items 1-1, 1-2, 1-3 and 1-4 of the following content:

"1-1. Depending on conditions of carrying out transactions on subsurface use and mineral type the competent authority approves the following forms of standard contracts:

1) the standard contract on exploration and production of hydrocarbons on the difficult project;

2) the standard contract on hydrocarbon production on the difficult project;

3) the standard contract on exploration and production of hydrocarbons;

4) the standard contract on hydrocarbon production;

5) the standard contract on uranium production.

1-2. For the purposes of of this Code treat difficult projects:

1) the sea projects providing investigation and (or) production of any hydrocarbons on the site (sites) of subsoil which (which) it is fully or partially located (are located) within the Kazakhstan sector of the Caspian or Aral Sea;

2) the projects on the land providing exploration and production of hydrocarbons on any subsoil plot with at least than one of the following parameters:

containing inventories of nonconventional hydrocarbons;

absolute depth of the most upper point revealed (revealed) deposits (field) of hydrocarbons constitutes at least 4500 meters;

the hydrogen sulfide content in found (found) deposit (field) constitutes in 3,5 formation fluid and more than a percent;

found (found) deposit (field) is characterized by abnormally high reservoir pressure with anomaly coefficient 1, and more which is determined as the relation of reservoir pressure to hydrostatic pressure with density of liquid of 1000 kg/m3 in well trunk;

found (found) deposit (field) is located under salt deposits more than 100 meters thick;

the found deposit belongs to nonstructural traps;

3) the gas projects on the land providing investigation and (or) hydrocarbon production on the site (sites) of subsoil containing (containing) gas or gas-condensate deposit or field with share of amount of petrosaturated part twenty five percent and less from the total amount of hydrocarbons of deposit or the field.

1-3. Concerning the site (sites) of subsoil on the land on which (which) do not have the geological information allowing to carry it to the difficult project the contract for exploration and production according to the standard contract on exploration and production of hydrocarbons on the difficult project is signed.

In that case the subsoil user confirms the status of the difficult project during the investigation period, stipulated in Item 2 articles 116 of this Code, to any of the methods provided below at any time:

1) the approved subsoil user and the report on operational calculation of geological inventories which received the positive decision of state examination of subsoil confirming field compliance to at least than one of criteria of the difficult projects specified in subitems 2) and 3) of Item 1-2 of this Article;

2) the approved subsoil user and the report on calculation of geological inventories which received the positive decision of state examination of subsoil confirming field compliance to at least than one of criteria of the difficult projects specified in subitems 2) and 3) of Item 1-2 of this Article.

The confirmation of the status of the difficult project made at the choice of the subsoil user according to subitems 1) and 2) of part two of this Item is final and does not require additional confirmation at the corresponding further stages of the period of investigation and (or) during production.

In case of non-confirmation of the status of the difficult project during the investigation period under the contract for exploration and production on the difficult project upon transition to the period of production of condition of such contract shall be brought into accord with the standard contract on hydrocarbon production according to article 119 of this Code.

1-4. If at least one field from the found fields under the contract for subsurface use corresponds to one of the criteria of the difficult project specified in Item 1-2 of this Article the provisions of this Code established for difficult projects are applied to such fields provided that the share of initial recoverable reserves of hydrocarbons of the field (fields) which (which) belongs (belong) to the category of difficult constitutes more than a half of initial recoverable reserves of all found fields under the contract.";

the paragraph one of Item 2 to state in the following edition:

"2. Treat number of the compulsory provisions containing in the contract for subsurface use, except for contracts for exploration and production or hydrocarbon production on difficult projects:";

add with Item 2-1 of the following content:

"2-1. The contract for exploration and production or hydrocarbon production on the difficult project shall include the following conditions:

1) transaction type on subsurface use;

2) duration of the contract;

3) borders of the site (sites) of subsoil;

4) obligations of the subsoil user on amounts, types and terms of works by the years on the subsoil plot during investigation provided by the work program (extra works);

5) obligations of the subsoil user on financing of training of the Kazakhstan personnel during production;

6) obligations of the subsoil user on expenses on research, scientific and technical and developmental works in the territory of the Republic of Kazakhstan during production;

7) obligations of the subsoil user on mitigations of consequences of subsurface use and methods of providing such obligations;

8) obligations of the subsoil user on expenses on social and economic development of the region and development of its infrastructure during production;

9) conditions of the taxation and exemption of export customs duties;

10) responsibility of the subsoil user for violation of contract commitments;

11) share of intra country value in personnel;

12) share of intra country value in works and services in case of application of such requirement to the corresponding difficult project;

13) conditions and procedure for change and prolongation of the duration of the contract;

14) procedure for the dispute resolution;

15) the obligation, stipulated in Item the 7th articles 119 of this Code, for large-scale deposits of hydrocarbons;

16) other conditions on which the right of subsurface use was granted and (or) which are specified in the corresponding standard contract.";

and 5 to state items 4 in the following edition:

"4. The duration of the contract on exploration and production of hydrocarbons, except for the contract for exploration and production of hydrocarbons on the difficult project, is determined consistently fixed in it by the investigation period, the preparatory period (if necessary) and the production period.

The duration of the contract on exploration and production of hydrocarbons on the difficult project is combined and consists of the period of investigation including initial stage of investigation, evaluation stage and stage of test operation according to Item 2 of article 116 of this Code, and the period of production, stipulated in Item 1-1 article 119 of this Code for large-scale deposits.

The duration of the contract on hydrocarbon production, except for the contract for hydrocarbon production on the difficult project, is determined consistently fixed in it by the preparatory period and the period of production.

The duration of the contract on hydrocarbon production on the difficult project is established on the basis of the term of the period of production determined according to Item 1-1 of article 119 of this Code.

5. The duration of the contract on exploration and production, the contract for production, the contract for exploration and production of hydrocarbons on the difficult project or the contract for hydrocarbon production on the difficult project is prolonged by competent authority for effective period of force majeure circumstances if the subsoil user produces the evidence of such circumstances according to the legislation of the Republic of Kazakhstan.";

add with Item 5-1 of the following content:

"5-1. The share of intra country value in personnel in the contract for exploration and production or hydrocarbon production is determined by the subsoil user taking into account the following by the difficult project:

1) needs of the subsoil user for foreign or Kazakhstan staff depending on its managerial and administrative needs;

2) availability in the market of the Republic of Kazakhstan of the qualified Kazakhstan personnel on certain category corresponding to needs of the subsoil user;

3) step-by-step training, including training, the Kazakhstan personnel and the subsequent gradual replacement of foreign staff with the Kazakhstan personnel on the leading categories.

The minimum share of intra country value in personnel on specialists and skilled workers in the contract for exploration and production or hydrocarbon production on the difficult project shall constitute at least seventy percent from the total number of the personnel involved in case of execution of the contract on the corresponding category.";

state Item 6 in the following edition:

"6. The contract is signed in the Kazakh and Russian languages. If the subsoil user or at least one of owners of share in the right of subsurface use is foreigner, the foreign legal entity or the legal entity of the Republic of Kazakhstan with foreign participation, then the contract for exploration and production or hydrocarbon production on the difficult project with such subsoil user also consists in English at the discretion of the subsoil user.";

in Item 7:

the second to state part in the following edition:

"The guarantees established by part one of this Item do not extend to changes in the legislation of the Republic of Kazakhstan in the field of ensuring national security, defense capability, ecological safety, health care, the taxation, customs regulation and protection of the competition, except for the case provided by part three of this Item.";

add with part three of the following content:

"The guarantees established by part one of this Item extend to changes in the legislation of the Republic of Kazakhstan in the field of customs regulation providing temporary exemption of export customs duties on the crude oil extracted under the contract for exploration and production or hydrocarbon production on difficult projects.";

3) in Article 37:

add Item 2 with subitems 10), 11) and 12) of the following content:

"10) changes of terms of the contract in connection with its reference to the contract for exploration and production or hydrocarbon production on the difficult project;

11) changes of terms of the contract in connection with non-confirmation of the status of the difficult project by results of investigation;

12) stipulated in Item the 5th article 36 of this Code.";

in Item "9)" to replace the 8th figure with figures "12)";

The subitem 1) of Item 1 of Article 38 to state 4) in the following edition:

"1) the expirations on which he was imprisoned;";

Items 1 and 2 of Article 49 to state 5) in the following edition:

"1. Operator under the contract for subsurface use or on the field within the contract for subsurface use, to licenses for investigation or production of solid minerals is the legal entity created or determined by the subsoil user or owners of the right of subsurface use, acting as the subsoil user's representative to carrying out transactions on subsurface use.

2. The nominated person who is the single owner of the right of subsurface use under the relevant contract or the license for subsurface use cannot be the operator.";

Item 2 of article 55 after the word "Provision" to add 6) with the word "subsoil user";

7) in Article 56:

state Item 1 in the following edition:

"1. Owing to guarantee the guarantor bears in front of the Republic of Kazakhstan responsibility on payment of the complete sum of money determined according to this Code in case of non-execution by the subsoil user of the obligation on mitigation of consequences of subsurface use according to this Code.";

the offer second of Item 2 to add with words "if other is not provided by this Code";

add with Item 5 of the following content:

"5. Features of the guarantees provided as ensuring obligation fulfillment on mitigation of consequences of transactions on subsurface use are established by the Special part of this Code.";

8) 2) of Item 3 of Article 70 to add the subitem with the paragraph the fourth the following content:

"for exploration and production or hydrocarbon production as difficult projects;";

Article 78 to state 9) in the following edition:

"Article 78. Procedure for the dispute resolution, connected with subsurface use

1. The disputes connected with implementation, change or the termination of the right of subsurface use are subject to settlement according to the laws of the Republic of Kazakhstan and international treaties ratified by the Republic of Kazakhstan.

2. The disputes which arose under the contract for exploration and production or hydrocarbon production on difficult projects subject to its terms and conditions at the choice of the subsoil user are subject to permission in courts of the Republic of Kazakhstan or in arbitration according to arbitral regulations of the United Nations Commission on the international trade law (UNCITRAL) in the territory of the Republic of Kazakhstan, including the International financial center "Astana", or beyond its limits.";

Article 95 to add 10) with Item 2-1 of the following content:

"2-1. The notice on holding the auction on provision of the right of subsurface use on hydrocarbons on the subsoil plots relating to difficult projects in addition to the data specified in Item 2 of this Article, except for subitems 11), 13) and 14) to part one of Item 2 of this Article shall contain also the requirement about determination by person interested in participation in auction, in its statement on participation in auction of the minimum obligation for intra country value in personnel according to Item 5-1 of article 36 of this Code.";

Item 3 of Article 96 to add 11) with the subitem 6) of the following content:

"6) in case of provision of the right of subsurface use on the subsoil plots relating to difficult projects - the minimum obligations on intra country value in personnel determined by the applicant according to Item 5-1 of article 36 of this Code.";

Part third of Item 3 of Article 100 to exclude 12);

13) in Article 103:

state Item 6 in the following edition:

"6. Acknowledged legal entity or consortium of legal entities conforming to the requirements approved by the national company in the field of hydrocarbons and approved with competent authority, the undertaken obligations on implementation of investment financing under the contract for exploration and production of hydrocarbons or the obligation on compensation of subscription bonus under the contract for hydrocarbon production can be the strategic partner of the national company in the field of hydrocarbons.

The strategic partner is determined by the national company in case of filing of application on carrying out direct negotiations.";

the offer second of part one of Item 7 to exclude;

14) in Article 106:

state heading in the following edition:

"Article 106. Early termination of operation of the contract for subsurface use";

state Item 1 in the following edition:

"1. The contract for subsurface use on hydrocarbons ahead of schedule stops the action in the following cases:

1) if at the end of the investigation period under the contract for exploration and production of hydrocarbons on the difficult project the subsoil user did not reveal the field, the report according to the estimates of stock counting received the positive decision of the state examination of subsoil provided by this Code;

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