Emblem
Official Source of the
Prime Minister of the
Republic of Kazakhstan
Menu
Emblem
Close button

Optimizing costs and increasing oil recovery factor — what was done to digitalize energy industry

Wednesday, 28 October 2020, 16:07:43

Today at the platform of the Central Communications Service under the President, Vice Minister of Energy Zhanat Zhakhmetova and Director of Subsoil Use Department of the Ministry of Energy Kayirkhan Tutkyshbayev spoke about holding auctions on granting subsoil use rights for hydrocarbons.

In order to implement the Code "On Subsoil and Subsoil Use" this year, the Ministry of Energy adopted 4 by-laws, including on the criteria for determining an operator, on determining an operator, according to the rules for holding an auction and a regulation on the commission for granting the right to subsoil use.

In accordance with the adopted amendments to the Code of the Republic of Kazakhstan "On Subsoil and Subsoil Use", the ministry approved the rules for holding an auction using the Internet resource of the operator of electronic auctions for granting the right to subsoil use for hydrocarbons in electronic form.

According to the Vice Minister of Energy Zhanat Zhakhmetova, in order to save budgetary funds, it was decided to use the existing objects of informatization (platforms) with the necessary functionality. In accordance with the "Criterion for determining the operator of electronic auctions for the provision of subsoil use rights for hydrocarbons", the operator of the electronic auction was determined — JSC Information and Accounting Center, with 100% state participation in the authorized capital.

Also, in accordance with Article 90 of the Code “Requirements for Persons Claiming Subsoil Use Right for Hydrocarbons”, when granting the subsoil use right for hydrocarbons, the person acquiring the subsoil use right must:

1) not be at the stage of liquidation, reorganization or bankruptcy;

2) not to have outstanding debts on taxes and other obligatory payments to the budget;

3) in case of obtaining the right to subsurface use for exploration and production of hydrocarbons — to have financial resources sufficient to meet the minimum requirements for the volume and types of work on the subsurface site during the exploration period.

The first stage in the process of participating in an auction for granting subsoil use rights for hydrocarbons is filing an Application for holding an auction. In accordance with the Code, an interested party in obtaining the subsoil use right for hydrocarbons submits an application for an auction, signed by an EDS, to the competent authority through the Operator's system.

The period for consideration of the application by the Competent Authority is no more than 20 working days.

“In case of a positive result, we publish a notice on our Internet resource, where we indicate for which sites an electronic auction is possible, indicate the name of these sites, indicate their coordinates, date and time of the electronic auction. Also, in the notification, we prescribe a starting bonus for each site and the conditions that we set for a potential subsoil user. This is training of Kazakhstani personnel, R&D costs, as well as local content,” explained Zhakhmetova.

The next step is to apply for participation in the auction. When the competent authority has published the notice of the auction, the time period provided for the subsoil user to submit an application to participate in the auction is 2 months from the date of publication of the notice.

“When submitting this application, the applicant pays a participation fee. This year the contribution is 100 MCI (about 277 thousand tenge). The participation fee is paid to the operator, and the operator, in turn, transfers this money to the state budget within three working days. This year's payment can also be made electronically through the e-Government payment gateway,” the vice minister explained.

The applicant, through the Operator's system, submits an application for an auction to the competent authority.

The application for participation in an auction for granting the subsoil use right for hydrocarbons is considered within 10 working days from the date of its receipt by the competent authority.

The competent authority accepts and admits the applicant to participate in the auction or refuses to accept the application. Refusal to accept the Application for participation in the auction is made solely on the grounds specified in the Code. This is followed by the auction.

“Applicants admitted by the competent authority to participate in the auction enter the auction hall. The auction starts by automatically placing the starting size of the signature bonus in the auction room. The auction is considered invalid by the commission if less than two participants are registered on the day of the auction. The results of the auction are announced and documented in a protocol on the day of its holding,” the vice minister said.

The results of the auction are announced and documented in the minutes on the day of the auction.

By the decision of the Commission for Granting Subsoil Use Rights for Hydrocarbons on the basis of the Register of Auction Results, which is formed by the system after the end of the auction, the winner of the auction is the participant who offered the largest amount of the signature bonus.

The results of the auction are published on the Internet resource of the competent authority within 3 working days from the date of the auction.

“All 10 sites put up for auction are partially or completely located on the territory of the Atyrau region of Kazakhstan. In addition to the Atyrau region, the plots in the boundaries of the West Kazakhstan and Aktobe regions were also included,’’ Zhakhmetova clarified.

In general, in 2020 in Kazakhstan, an electronic auction was set up for 10 oil and gas subsoil areas with a total starting size of a signature bonus of 400 million tenge.

Currently, more than 30 applications for participation in the auction have been received.

The total area of ​​the sites proposed by the state for the development and production of hydrocarbons is about 29 thousand square meters.

Information about the launch of the auction was published in a number of Kazakhstani mass media and on information resources of Russia, Ukraine and Azerbaijan.

From Sep. 1, 2020, persons interested in obtaining the right to subsurface use can apply for an online auction.

“The auctions will be held on the electronic site www.gosreestr.kz. The Portal has a wealth of experience and practice in conducting such auctions. There are more than 80 thousand bidders in its database today. I would like to note that the Code provides for the participation of both individuals and legal entities — residents and non-residents of the country. In this regard, due to the automation of the application process, the volume of attached documents has been reduced several times and the possibility of requesting data from other information systems of state bodies has been implemented,” the vice minister explained.

Electronic bidding is scheduled for Dec. 23, 2020, (applications for participation are accepted until Nov. 29). These sites will be the first to be developed electronically. Until now, the auctions were held "face-to-face", and the participants had to visit the auction rooms, even if a foreign company applied for the development. Now, under conditions of quarantine and the cancellation of most international flights, bidding will be conducted electronically. This saves both government agencies and businesses from significant transaction costs.

At the same time, the director of the Department of Subsoil Use Kaiyrkhan Tutkyshbayev said that the last time the auction was held in 2018. As a result of the auction, the winners were identified in nine areas. The total amount of the signature bonus was about 1.5 billion tenge, 3 thousand new jobs were created.

Kaiyrkhan Tutkyshbayev noted that reserves on the state balance sheet have not been approved for 10 sites put up for auction this year.

“These plots are being put up for auction through our applications. Therefore, today they are absent from the state balance sheet. If an individual or legal entity that has received a contract discovers reserves at an oil field, he will put it on the balance sheet and receive a pre-emptive right to conclude a contract for its further production,” Tutkyshbayev said.

According to the speaker, the size of the initial subscription bonus, according to the Tax Code, is calculated using a formula. If there are no reserves, it is 200 MCI. And it can be considered a signature bonus.

 

Digitalization of energy sector

Zhanat Zhakhmetova noted that the Ministry of Energy of the Republic of Kazakhstan is carrying out digitalization activities within the framework of the state program ‘Digital Kazakhstan’. One of the projects is the provision of subsoil use rights in electronic format. In the oil and gas industry, work is now underway to create an information system for accounting for oil. It will be a very large information system, where it is planned to digitize data on oil production, transportation and refining.

There are also a number of other events in the energy sector. An electronic auction for renewable energy has been in operation since 2019. Work is underway to automate services for concluding contracts, concluding additions to these contracts, granting the right to subsoil use to a third party.

“We must automate almost all the functions performed by the Ministry of Energy within the framework of the Digital Kazakhstan state program,” Zhakhmetova stressed.

At the same time, the vice minister of energy noted that digitalization has shown its effectiveness during the pandemic.

“This year, for example, we were able to send 80% of our employees to work remotely due to the fact that the Ministry of Digital Development introduced a cloud solution for document management. Thus, we were able to secure our employees by sending them to work remotely. We want to carry out similar work on our companies,” Zhakhmetova said.

The main goal of digitalization, especially in the energy industry, is to optimize costs and increase the oil recovery factor, thereby increasing productivity.

At the same time, the Ministry of Energy sets itself two goals for digitalization. This is the automation of functions and services and assistance in digitalization for subsoil users and companies.


News feed
21 January 2021, 19:26
Arman Dzhumabekov appointed Chief of Staff of the Ministry of National Economy
21 January 2021, 19:02
Gabidulla Abdrakhimov appointed vice minister of culture and sports of Kazakhstan
21 January 2021, 18:35
Urken Bisakayev dismissed as vice minister of culture and sports
20 January 2021, 14:13
Prime Minister Askar Mamin visits North Kazakhstan region on a working trip
19 January 2021, 11:02
By the end of 2021, it is planned to vaccinate up to 6 million Kazakhstanis — Ministry of Healthcare
19 January 2021, 10:58
Over 10 thousand police officers and military personnel of National Guard involved in quarantine actions — Yerlan Turgumbayev
19 January 2021, 09:45
Mass vaccination of population to start on Feb. 1 in Kazakhstan
18 January 2021, 21:46
Government session to be held Jan. 19 in Ukimet Uyi
18 January 2021, 20:01
Prime Minister Askar Mamin introduces new ministers of national economy, labor and social protection of the population
15 January 2021, 19:07
President took part in the Plenary Session of the Majilis of the Parliament
15 January 2021, 16:25
President Kassym-Jomart Tokayev signs decree appointing Askar Mamin as Prime Minister of the Republic of Kazakhstan
15 January 2021, 10:04
President Kassym-Jomart Tokayev signs Decree on Government of the Republic of Kazakhstan
12 January 2021, 20:12
American Valmont Industries to launch plant for production of advanced irrigation systems in Kazakhstan
12 January 2021, 14:16
Volume of oil and condensate production in Kazakhstan in 2020 amounted to 85.7 million tons — Nurlan Nogayev
12 January 2021, 13:13
Agro-industrial complex of Kazakhstan in 2020 showed positive dynamics of development
12 January 2021, 13:00
At the end of 2020, state budget revenues plan fulfilled by 102.7% — Yerulan Zhamaubayev
12 January 2021, 11:55
Production of vehicles had positive effect on growth of machine-building industry — Beibut Atamkulov
12 January 2021, 10:51
Income of National Fund at the end of 2020 remained positive — Erbolat Dossaev
12 January 2021, 10:43
In 2020, employment measures covered 1.4 million people, tax breaks were received by 700 thousand entrepreneurs — Ministry of National Economy
12 January 2021, 10:02
In 2020, real sector became the main factor in stability of Kazakhstan’s national economy
11 January 2021, 19:20
Government session to be held Jan. 12 in Ukimet Uyi
11 January 2021, 10:36
Prime Minister Askar Mamin voted in elections of deputies to Majilis from Assembly of the People of Kazakhstan
10 January 2021, 07:46
Prime Minister of Kazakhstan Askar Mamin voted in parliamentary elections
08 January 2021, 15:54
World Bank improved its estimates for economic dynamics of Kazakhstan in 2020
08 January 2021, 14:03
Kazakhstan is developing investment cooperation with the United States through AIFC platform
07 January 2021, 08:08
Prime Minister of Kazakhstan Askar Mamin congratulates Kazakhstanis on Christmas
01 January 2021, 00:10
Prime Minister Askar Mamin congratulates Kazakhstanis on New Year
30 December 2020, 19:54
Yeraly Tugzhanov gets acquainted with production of unique devices for treatment of lung diseases
30 December 2020, 13:47
Fifty schools for 170 thousand places to be built under public-private partnership in Kazakhstan PPP
29 December 2020, 11:49
By 2030, Kazakhstan plans to grow about 270 thousand tons of marketable fish per year – Magzum Mirzagaliyev
29 December 2020, 11:33
Kazakhstan developed draft new General Agreement for 2021-2023 on achievement of Decent Work concept
29 December 2020, 10:00
Government adopts Program for Development of Fishing Industry until 2030
29 December 2020, 09:38
Askar Mamin instructs to ensure effective control over observance of labor rights of citizens
28 December 2020, 22:40
Government session to be held Dec. 29 in Ukimet Uyi
28 December 2020, 14:16
Alikhan Smailov participates in meeting of Council of Eurasian Economic Commission
24 December 2020, 17:37
Prime Minister Askar Mamin chairs meeting of Council on Transition to Green Economy under President of Kazakhstan
24 December 2020, 17:13
Askar Mamin chairs meeting of State Commission for Control over Construction of Nur-Sultan
24 December 2020, 11:31
Yerzhan Kazanbayev appointed vice minister of trade and integration of the Republic of Kazakhstan
24 December 2020, 11:29
Azamat Askaruly relieved as vice minister of trade and integration
23 December 2020, 12:16
Expansion of Makinsk poultry farm to improve food security in Kazakhstan — Askar Mamin
22 December 2020, 18:35
Government considers progress in implementation of Nation's Plan "100 Concrete Steps''
22 December 2020, 18:21
Minister of Defense speaks on military equipment of Armed Forces and service during emergency
22 December 2020, 11:48
Introduction of water-saving irrigation technologies to reduce water consumption and increase yields – Saparkhan Omarov
22 December 2020, 11:16
Ministry of Justice of Kazakhstan: Government’s plan of legislative work for 2020 fully implemented
22 December 2020, 10:21
192 billion tenge to be allocated for digitalization of trunk canals within 5 years — Magzum Mirzagaliyev
22 December 2020, 10:00
Government considers Plan of Legislative Work for 2021
22 December 2020, 09:50
Government considers issues of using water resources
21 December 2020, 16:17
Government session to be held Dec. 22 in Ukimet Uyi
21 December 2020, 13:17
Askar Mamin launches production of Yutong buses in Saran
21 December 2020, 11:09
Production of Sputnik V vaccine begins in Kazakhstan
© 2019 - 2020 Press service of the Prime Minister of the Republic of Kazakhstan.
Developed by SoftDeCo.