New Procurement Rules for Subsurface Users in Kazakhstan

This client update includes amendments to the legislation of the Republic of Kazakhstan in March 2013.

The Resolution of the Government of the Republic of Kazakhstan No. 133 and 134 on 14 February 2013 approved the new procurement rules for subsurface users:

1) Rules for the procurement of goods, works and services (hereinafter – GWS) during the subsurface operations by using the state information system “Register of GWS used under subsurface operations and their producers”

2) Rules for the procurement of GWS during subsurface operations (hereinafter – the Rules).

These Rules have been developed in accordance with the Law “On Subsurface and Subsurface Use” and focused on supporting local producers, to increase their competitiveness and to be prepared for the integration processes in the world economy.

These Rules are aimed to regulate the procedure for procurement by subsurface users within the subsurface operations and specify certain provisions for solid minerals producers as well as for hydrocarbons producers.

New in procurement procedures:

• Placement of tender documents in state information system – “Register of GWS used in subsurface operations and their producers”;

• Electronic procurement in electronic form;

• Procurement from a Single Source from Kazakhstani producer – sole supplier, registered in the database of GWS and its suppliers, which is formed and maintained by the National Institute of Development of Local Content;

• Long-term procurement contracts, if the procurement of such GWS is provided by the relevant procurement programs, etc.

The Rules also updated the procedure of procurement of an Open tender, which shall be carried out in two stages.

Stage 1:

• Advertisement on Open tender in the system and printed periodical publication;

• Collection of tender applications;

• Opening of tender applications;

• Consideration of tender applications for compliance with the requirements of tender documentation;

• Protocol on admission to an Open tender.

Stage 2:

• Quotations submission;

• Consideration of quotations;

• Announcing the tender winner;

• Protocol of results;

• Contract executing.

The present review includes only brief information about introduced changes. Should you need additional information, do not hesitate to contact us. In addition, we are currently conducting the trainings on the procurement rules and ready to discuss the free introductory training arrangements with our clients.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please seek for a specific advice in relation to any questions. Please note that Kazakhstan and Turkmenistan are emerging economies and their legislation and legal systems are in constant development. Should you have any questions or would like to discuss subjects addressed in this Client Update please contact us.