Conditions for concluding a production sharing agreement

Production sharing agreements may be concluded for individual subsoil areas (plots) limited in space and coordinates within which deposits, parts of mineral deposits of national and local importance are located, including subsoil areas within the continental shelf and exclusive (maritime) economic zone.

At the request of the investor and in cases where the land plots necessary for the implementation of the concluded production sharing agreement are in state or municipal ownership, subsoil plots (mineral deposits) are provided together with such land plots.

In all other cases, the state ensures the provision, at the request of the investor, of land plots necessary for the implementation of the concluded production sharing agreement, in the manner specified in such agreement.

In the event that land plots necessary for the use of subsoil under production sharing agreements are owned by individuals or legal entities or are in municipal ownership, the acquisition of ownership rights to these land plots is carried out by the state in accordance with the law.

A tender for the conclusion of a production sharing agreement for a separate subsoil area is held if any of the following conditions are met:

1) unprofitability for subsoil users and the state of continuing to develop mineral deposits, which is due to objective factors, in the case when the development of such a deposit can provide a significant volume of mineral extraction, and the conservation or liquidation of the development object can lead to negative social consequences and financial (material) losses;

2) lack of state funding and technical means for the development of new large mineral deposits, the development of which ensures the level of mineral extraction, necessary for the social development and economic security of state;

3) the need to involve special high-cost technologies for the development of difficult-to-extract and significant reserves of minerals located in difficult mining and geological conditions or remaining for the fields being developed, as well as the need to prevent losses of fuel, energy and mineral raw materials in the subsoil;

4) the need to provide regions with their own fuel and energy raw materials, the creation of new jobs in areas where employment is at a low level;

5) the need to introduce the latest technologies, equipment with advanced technical developments to ensure effective search, exploration and development of promising, underexplored mineral deposits;

6) the need to develop mineral deposits, the development of which is carried out in particularly difficult conditions (subsoil areas and deposits in marine areas, deposits with difficult-to-extract and depleted reserves or in areas with undetermined oil and gas content);

7) the need for further exploration, additional or in-depth exploration of the subsoil area.