Pursuant to the Kazakhstan Constitution, subsoil is owned by the state. The state grants rights to use the subsoil to individuals, entities and consortiums in accordance with the subsoil use legislation. This right of use is called a ‘subsoil use right’ (SUR) and grants the opportunity to use, for a fee, the subsoil within the boundaries of an allocated plot for business purposes for a specific period. An SUR is a proprietary, indivisible right. Subject to the provisions of subsoil use legislation, provisions on the right to property will apply to the SUR insofar as these do not contravene the nature of the right in rem.
The absolute majority of SURs in Kazakhstan are held by private entities. Some SURs are granted to the national oil company, KazMunayGas JSC, which is entitled to obtain SURs both through online auctions on general grounds and through direct negotiations. KazMunayGas, as the state’s representative, also participates in a number of consortiums, including the biggest three oil and gas fields.
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