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LAW OF THE KYRGYZ REPUBLIC

of June 8, 1998 No. 77

About oil and gas

(as amended on 20-01-2015)

Accepted by General Court of Jogorku Kenesh of the Kyrgyz Republic on May 18, 1998

Action of provisions of this Law extends to all organizations of oil and gas industry of the republic irrespective of forms of their property, and also to all citizens, physical persons and legal entities of the Kyrgyz Republic.

Article 1. Oil and gas industry

Oil and gas industry - the industry component including complex of the organizational, technical and engineering procedures connected with searches, investigation, development (production), storage, conversion, transportation and sale of oil, gas and products of their conversion.

Organization activity of oil and gas industry is regulated by provisions of this Law, the Constitution of the Kyrgyz Republic and other regulatory legal acts of the Kyrgyz Republic.

Article 2. Purposes of this Law

The purposes of this Law are creation of the regulatory framework conforming to international standards for ensuring increase in cost efficiency, reliability and safety of functioning and organization activity in oil and gas industry, consumer protection and producers, forming of favorable conditions for investment attraction in oil and gas industry for intensive growth in volumes of their production.

Article 3. Determination of terms

In this Law following terms have the following values:

subsoil - part of crust, including minerals, stretching from surface or the lower bound of soil layer, bottom of reservoirs and water currents to depths available to geological studying and industrial development;

minerals - the natural mineral formations of crust used in the field of commodity production;

popular minerals - the widespread minerals and rocks in the destroyed, natural and technology changed condition used for construction works and production of construction materials;

geological branch - the subsoil plot represented for geological studying and represented in graphical documentation in geographical or rectangular coordinates of its angular points;

land branch - the site of the land surface provided to the licensee for geological studying and industrial development of subsoil and represented in graphical documentation in rectangular three-dimensional coordinates of its angular points;

mountain branch - the subsoil plot provided to the licensee for industrial development (production) of oil and gas deposits and represented in graphical documentation in rectangular three-dimensional coordinates of its angular points;

oil and gas industry - the industry component including complex of the organizational, technical and engineering procedures connected with searches, investigation, development (production), storage, conversion, transportation and sale of oil, gas and products of their conversion;

the organization in oil and gas industry - the physical and (or) legal entities irrespective of patterns of ownership performing activities in oil and gas industry;

activities in oil and gas industry - set and (or) complex of works of the organizations connected with searches, investigation, development (production), storage, conversion, transportation and sale of oil, gas and products of their conversion;

primary resources - the resources in natural state lying in earth subsoil which can be used in oil and gas industry;

secondary resources - the resources received in case of conversion of primary resources;

crude oil - any hydrocarbons irrespective of their specific weight extracted from subsoil in liquid state at normal atmospheric temperature and pressure including the liquid hydrocarbons known under the name of distillate (gas condensate) or condensate formed of natural gas by natural condensation;

oil - crude oil, and also the hydrocarbons received after purification of crude oil, conversion of combustible slates and bituminous rocks;

mining - complex of processes on extraction of minerals of subsoil;

protection of subsoil - ensuring rational use of subsoil and the minerals containing in them, the greatest possible and economically reasonable completeness of their extraction from subsoil, complex use of fields and the extracted mineral raw materials at all stages of its conversion;

geological studying of subsoil - complex of special research works on searches and investigation of fields, to determination of quantity and quality of the inventories of mineral raw materials containing in them with assessment of their economic value, and also to studying of other geological objects which are not connected with mining;

payment for use of natural resources - one-time payment to the owner of resources of subsoil (state) for provision of the right of their development;

natural gas - hydrocarbons which are in gaseous phase in earth subsoil under the corresponding temperature conditions and reservoir pressure;

gas condensate - natural system of the mutually dissolved gaseous and easily boiling fat oil hydrocarbons which are in thermodynamic conditions of bowels of the earth in gaseous or vaporous state; hydrocarbonic gases which under conditions of normal pressure and normal temperature are in gaseous state and in case of rather small increase in pressure (without liquefaction) turn into liquid state. In case of pressure decrease these hydrocarbonic liquids evaporate and pass into steam and gaseous phase. The high-quality composition of hydrocarbons shall conform to the standard established by the relevant state bodies authorized by the Government of the Kyrgyz Republic;

oil products - the products and components received as a result of conversion of crude oil and gas by thermocatalytic and petrochemical synthesis and other methods conforming to the established international standards;

passing components in oil and (or) in natural gas - the different chemical elements and their connections which are in dissolved and suspension in oil, natural gas and reservoir waters of fields;

the oil field and natural gas - one or several natural accumulations of hydrocarbons in the subsoil of the earth connected with single geological structure, having economic value in case of this price level and industrial technologies;

search - any transactions (geological, geophysical, scientific and methodical, boring) directed to determination (establishment) of geological structures and bodies in subsoil of crust, perspective for opening (identification) of oil fields and natural gas;

investigation - any transactions, first of all the boring, directed to establishment of availability of fields (deposits) oils and natural gas within geological structures and bodies in earth subsoil;

opening - detection and opening by means of drilling of geological bodies of the first productive deposit of oil and (or) natural gas within geological structures and bodies in earth subsoil;

development (production) of oil and natural gas - the transactions including drilling of operational wells and complex of other transactions for the purpose of oil recovery and natural gas from deposits in subsoil on the land surface;

production (conversion) - complex of engineering, technical procedures of receipt of by-products of solid, liquid and gaseous hydrocarbons, organic and inorganic substances of oil and gas;

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