The first online auction for subsoil users in Kazakhstan brought 61 billion tenge

The first online auctions for the right to exploration and production of hydrocarbons were held in Kazakhstan, the press service of the Ministry of Energy of the Republic of Kazakhstan reported.

Trading started at 10:00 by capital time, while the entrance to the auction hall for participants was available from 9 am.

In total, exploration and production rights were sold at auctions on seven plots. Together, the starting price for them amounted to 263 million tenge, which ultimately increased up to 61 billion, having increased by more than 230 times. For one of the sections, the starting cost increased by 1000 times.

The longest trading took place on two plots: "Zaburun'ye" and "Saraishyk". The auctions for these two plots started at 10 am and lasted until the evening. As a result, the right for exploration and production in Zaburun'ye plot was sold for 16.3 billion tenge, the auction for it ended at 15:20.

The auction for "Saraishyk" plot continued until the official end at 17:00. The total cost of exploration and production rights amounted to 43 billion tenge. The starting price was 43 million tenge.

It is important to note that through the auction, the right to subsurface use is granted, and not the ownership of land. This right is regulated by the Code "On Subsoil and Subsoil Use", any technological processes at the plots will be considered by the Central Commission for Exploration and Development under the Ministry of Energy of the Republic of Kazakhstan.

Having received the right to subsoil use, the investor signs a land rental agreement with the local executive body. Before developing a project document, each subsoil user is obliged to hold public hearings with the participation of the local population.

Since the auctions are conducted online and anonymously, the participants do not see each other. This information is not available for specialists of the Ministry of Energy of the Republic of Kazakhstan, which are supervise holging of these auctions.

The online auction service was launched on September 1, 2020 on the portal of the State Property Register www.gosreestr.kz, the developer and holder of which is the "Information and Accounting Center" JSC.

Experts expect that a new mechanism will make the market transparent and significantly reduce costs for both business and the state.

Today an interactive map containing information about 82 plots is available to everyone.

To initiate an auction for each of the objects, a potential investor only needs to submit an application online, after which the process of auctioning exploration and development right for deposit is launched.

Anyone could follow the trading process. The operator, that is, JSC Information and Accounting Center, at the request of the Ministry of Energy of the Republic of Kazakhstan, created a separate public auction room.

All proceeds from the auction will supplement the state budget.

(Image from byrich.ru site)

Unofficial translation