Draft bill ceasing practice of "sleeper licenses" for geological exploration adopted in first reading

MOSCOW. July 18 (Interfax) - The State Duma has passed in a first reading amendments to the law "On Subsoil Resources", which were drawn up by the Natural Resources Ministry in order to stop the practice of "sleeper" licenses for geological exploration.

The current legislation provides for a term of 5 years for licenses for geological exploration of subsurface resources. For certain regions and the shelf these terms are set at 7 and 10 years respectively.

The law also provides for the possibility of license extension for completion of geological exploration. Some subsoil users take advantage of this possibility - exploration works are delayed and so-called "sleeper" licenses appear (owners of such licenses extend the terms by making a small payment for subsoil use).

To curb the practice of "sleeper" licenses, the bill (N63540-8) adopted in the first reading proposes that rates for renewal be multiplied after the expiration of the planned term of the license: the first year - 2 times, the second year - 10 times, the third and subsequent years - 100 times.

At the same time, a protection mechanism is envisaged for bona fide subsoil users - if geological exploration is delayed for objective reasons, the costs of carrying out operations are deducted.

If adopted, the law will enter into force on September 1, 2024 and for hydrocarbons - on September 1, 2026, in order to avoid an additional financial burden for companies under sanctions.

During the discussion of the draft law at the meeting of the specialized committee, it was proposed that its norms be extended to cover commonly occurring minerals. The Natural Resources Ministry backed the idea and plans to present its vision of the issue by the second reading.