Russian govt commission backs proposal to allow sale of prospecting licenses, grant access to early stage of exploration
MOSCOW. June 27 (Interfax) - The Russian government's legislation commission has approved changes to the law on subsurface resources drafted by the Natural Resources Ministry that would allow companies to sell prospecting licenses and would attract private investment into regional stages of geological exploration, the ministry told Interfax.
The bill proposes two new measures to stimulate exploration. The first is to allow the sale of exploration licenses without having to confirm property or corporate relations between the investor and the subsurface resource user. The second allows private companies to participate in the regional stage of exploration, which is usually carried out and financed by the government.
"Today it is only possible to sell a license by selling the actual company that owns it. Because of this, large holdings are forced to acquire hundreds of legal entities to which purchased licenses are registered. In order to rule out possible speculation, the law requires the absence of violations on licenses for two years and simultaneous transfer to the investor of approved documentation on exploration of the whole resource property and all existing geological information," Natural Resources Minister Alexander Kozlov said.
Given the importance of the regional stage of exploration, access to this work will only be granted to Russian companies with at least five years of exploration experience and no violations for two years preceding the filing of the application. A procedure will be approved for the joint implementation of this stage by Federal Subsurface Resources Agency institutions and private investors.
The bill is expected to nearly double the annual growth of Russia's regional exploration maturity to 1.5% from 0.7%, and increase the number of prospective properties discovered annually to about 100 from about 40.
The ministry had already submitted these proposals to the government twice and was given recommendations for revisions.