ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of February 10, 2011 No. 122

About approval of Rules of representation by the national company of state interests in the contracts providing equity in them the national company

According to the subitem 32) of article 16 of the Law of the Republic of Kazakhstan of June 24, 2010 "About subsoil and subsurface use" the Government of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Rules of representation by the national company of state interests in the contracts providing equity in them the national company.

2. Recognize invalid:

1) the order of the Government of the Republic of Kazakhstan of June 29, 2002 No. 708 "About approval of Rules of representation of state interests by the National company in contracts with the contractors performing oil operations by means of obligatory equity in contracts";

2) Item of 8 changes and additions which are made to some decisions of the Government of the Republic of Kazakhstan, approved by the order of the Government of the Republic of Kazakhstan of November 26, 2003 No. 1184 "About modification and amendments in some decisions of the Government of the Republic of Kazakhstan" (SAPP of the Republic of Kazakhstan, 2003, No. 44, the Art. 484);

3) item 4 of changes which are made to some decisions of the Government of the Republic of Kazakhstan, approved by the order of the Government of the Republic of Kazakhstan of May 20, 2010 No. 454 "Questions of the Ministry of oil and gas of the Republic of Kazakhstan" (SAPP of the Republic of Kazakhstan, 2010, No. 34, the Art. 273).

3. This resolution becomes effective after ten calendar days from the date of the first official publication.

Approved by the order of the Government of the Republic of Kazakhstan of February 10, 2011 No. 122

Rules of representation by the national company of state interests in the contracts providing equity in them the national company

1. General provisions

1. These rules are developed according to the Law of the Republic of Kazakhstan of June 24, 2010 "About subsoil and subsurface use" (further - the Law) and establish procedure for representation by the national company of state interests in the contracts for subsurface use providing equity in them the national company.

Representation of state interests by the national company in contracts for subsurface use is performed according to the procedure of realization of single state policy in the field of subsurface use by means of equity.

2. In these rules the concepts established in the Law and also the following concepts are used:

1) affiliirovanny person - the legal entity in whom the national company has opportunity directly and (or) to indirectly determine decisions and (or) to exert impact on the decisions made by such person if at this legal entity the main activities are connected with subsurface use;

2) obligatory share in the contract - the share of the national company expressed as a percentage in the contract determined by the Government of the Republic of Kazakhstan following the results of carrying out tender;

3) the operator - the legal entity created or determined by subsoil users according to the legislation of the Republic of Kazakhstan by the written notice of competent authority, exercising operational management of activities and the accounting and reporting transactions connected with execution of the contract (authorized representative) for which actions subsoil users bear property responsibility;

2. Determination of obligatory share of the national company in the contracts signed following the results of tender

3. The government of the Republic of Kazakhstan approves the list of the subsoil plots exposed on the tender created by competent authority based on offers of authorized body on studying and use of subsoil regarding subsoil plots in the territory of the Republic of Kazakhstan and at the sea in size of obligatory share of the national company.

4. The list of subsoil plots specified in Item 3 of these rules is created taking into account offers of the national company on the subsoil plots provided to the national company on the basis of direct negotiations.

5. The competent authority in case of the announcement of tender in its conditions specifies obligatory share of the national company in the subsoil plot exposed on tender according to the decision of the Government of the Republic of Kazakhstan, and need of financing by other, except the national company, the owner of the right of subsurface use, the expenses connected with equity of the national company before commercial detection.

3. Representation of state interests in contracts

6. Representation of state interests is implemented by means of implementation of the rights of equity in contracts, within the powers fixed in them.

7. The national company or its affiliirovanny person exercises control of shares in contracts through the bodies provided by contracts, cooperation agreements and constituent documents of operators (in case of creation of consortia) and/or constituent documents of the organizations with joint participation in the authorized capital.

8. In case of contract performance the national company can conclude with other owners of the right of subsurface use any kinds of agreements which can be required for realization of the oil operations provided by the contract, and provisions of such agreements shall not contradict Contract provisions.

9. Representation of state interests in contracts, is performed according to the laws, decrees and/or orders of the President of the Republic of Kazakhstan, decisions and/or orders of the Government of the Republic of Kazakhstan, competent authority and other state bodies within their competence, and also decisions of advisory advisory bodies under the Government of the Republic of Kazakhstan on development of oil and gas and energy industries.

The competent authority concludes with the national company the Memorandum of the basic principles of realization of single state policy in contracts with obligatory equity taking into account possibility of change of the main directions of state policy in oil-and-gas sector determined by the legislation of the Republic of Kazakhstan.

10. The national company in contracts in the procedure established by the legislation of the Republic of Kazakhstan and the contract promotes observance of state interests when carrying out oil operations, including:

1) to execution of contract commitments on the Kazakhstan content in goods, works and services;

2) to execution of contract commitments on the Kazakhstan content in personnel, and also on providing conditions and compensations of the Kazakhstan personnel on not discrimination basis;

3) on observance of requirements of the Initiative of transparency of activities of the extracting industries;

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