RUSSIAN DUMA TO DEBATE NEW RESOURCES LAW

Duma, Russia's lower house of parliament, will begin debate on draft laws on oil and gas and mineral resources law this month. While details are still sketchy, the new legislation is designed to provide incentives for bolstering foreign investment in Russia's beleaguered oil and gas industry. Meanwhile, Kazkahstan's government has just implemented a new law on foreign investment that places domestic and foreign investors on an equal footing while it pledges to sustain property

Feb. 6, 1995

2 min read

Duma, Russia's lower house of parliament, will begin debate on draft laws on oil and gas and mineral resources law this month.

While details are still sketchy, the new legislation is designed to provide incentives for bolstering foreign investment in Russia's beleaguered oil and gas industry.

Meanwhile, Kazkahstan's government has just implemented a new law on foreign investment that places domestic and foreign investors on an equal footing while it pledges to sustain property liabilities except in case of war or change of political system.

PETROLEUM LAW FRAMEWORK

The draft provides a legal framework to establish mining concessions, production sharing contracts, and risk service contracts aimed at the oil and gas industry. The draft law specifically deals with establishing a division of authority between federal and local governments as joint owners of subsurface resources under the Russian constitution.

Duma is expected to balk at a rule barring federal or local administrations from individually awarding concessions, although the two are to jointly compile a list of mineral or hydrocarbon deposits to be put up for bid.

Of critical importance is a draft law provision that would block the effect of any investor-sensitive legislative changes on concession agreements for 50 years unless such changes are included in the original agreement. If passed, the provision effectively would incorporate for the first time the concept of contract law into Russia's underground resources legislation.

Similarly, a bill on production sharing, included in the framework legislation on concessions, would be the first Russian legislative act to place a foreign investor on an equal footing with the host government within the context of civil law. That would help eliminate contradictions in present resources regulations, notably the almost whimsical levying of very high taxes.