Topic of PSA in Russia no longer a problem - Shmatko
MOSCOW. Jan 30 (Interfax) - The topic of production sharing agreements (PSA) in Russia is no longer a problem, Russian Energy Minister Sergei Shmatko said.
"The subject of PSA has finally recovered," he said.
The existing PSA, concluded in the 1990s when Russia did not have the technological experience to implement such projects, met with varied success. "There is still a lot of work to be done to increase efficiency. We will need to carry out work to refine techniques and work with regions with the aim of developing infrastructure. But it's no longer relevant to talk about fundamental problems. Practice shows that we can solve all problems during normal operations," Shmatko said.
At the same time, Deputy Energy Minister Sergei Kudryashov said that despite the normalization of work in the context of these projects, as of yet there are no plans to conclude new PSA in Russia.
A PSA is an agreement in accordance with which Russia provides a business entity (an investor) on a commercial basis and for a determined period of time the right to prospect for, develop and produce mineral resources at a subsoil section specified in the agreement, as well as to conduct maintenance-related activities. The investor is obligated to carry out the specified work at its own expense and its own risk. The PSA determines all the necessary conditions connected with subsoil resource use, including the terms and procedures for sharing production between the sides of the agreement. The legal basis for PSA is set out in the Russian federal law 'On production sharing agreements' from December 6, 1995. The terms for subsoil resource use set out in the agreement must not contradict the requirements set out in the law 'On subsoil' from February 21, 1991. The lists of subsoil sections for which the utilization rights under a PSA can be granted are contained in the federal laws.
