Practice Area

Subsoil Use

Subsoil Use

Subsoil use has been one of SIGNUM’s core industry practices since the establishment of the firm. We advise leading international and Kazakhstan oil and gas and mining companies, investors, service providers and trading companies on a broad range of matters relating to exploration, production and the development of natural resources projects.

We support clients throughout the entire project lifecycle – from obtaining subsoil use rights, structuring investments and negotiating with government authorities to securing approvals for project and technical documentation, supporting ongoing operations, acquisitions and disposals of assets, project restructurings and termination of subsoil use rights. Our team also represents clients in complex regulatory, tax, environmental and other disputes arising from subsoil operations.

SIGNUM has substantial experience advising on major transactions involving oil and gas and mining assets in Kazakhstan, including cross-border M&A, joint ventures, production sharing arrangements and capital markets projects. We understand the particular dynamics of investor engagement with the state and regulatory authorities and advise on state pre-emption rights, approvals of the competent authority and other regulatory requirements applicable to transactions involving subsoil assets.

Several members of our team have previously worked in-house for leading oil and gas and mining companies. This experience enables us to understand not only the legal issues, but also the technical, operational and commercial objectives of our clients – and to develop solutions that work in practice.

Service includes the following directions
  • Subsoil Use Regulation and Project Development
  • M&A and Transfers of Subsoil Use Rights
  • Joint Ventures and Corporate Structuring
  • Contracts and Operations
  • Regulatory, Environmental and Permitting Matters
  • Subsoil Use Disputes
  • Taxation of Subsoil Users
  • Employment and Workforce Matters
Talgat Sariev is lauded for his “vast experience in commercial and tax litigation”, in addition to his “high degree of technical knowledge and commercial sense”. Talgat has also defended clients’ interests in environmental disputes, labour litigation and immigration matters.
Chambers Global, 2016
Sofiya Zhylkaidarova is described as “an exceptional oil and gas lawyer” who is clear and straightforward in her advice. Interviewees commend her strong leadership skills as well as her broad experience in the sector. She focuses her expertise on M&A, subsurface use, taxation and regulatory compliance.
Chambers Global, 2016
Talgat Sariev is excellent at defending clients in court in commercial and tax litigation.
Legal 500 Europe, Caucasus and Central Asia, 2016
“SIGNUM Law Firm provides advice to a number of well-known international clients on environmental, subsurface, taxation, debt recovery, competition law or compliance matters”
Legal 500 Europe, Caucasus and Central Asia, 2016
Sofiya Zhylkaidarova is recognized as a “good and very energetic” lawyer who “knows her subject well”. Peers particularly highlight her experience in tax litigation.
Chambers Global, 2015
Managing Partner Sofiya Zhylkaidarova is commended for her wide-ranging expertise and impressive knowledge of Kazakh law. She maintains a diverse practice that spans tax, commercial contracts and M&A.
Chambers Global, 2015
Valued by international clients for its provision of local counsel and by domestic clients for its broad offering of legal services. Various specialisms include commercial and corporate law, employment and labour law matters, finance and taxation.
Chambers Asia Pacific, 2014
“SIGNUM Law Firm’s greatest expertise lies in oil, gas and natural resources, and is increasingly advising manufacturers and distributors on coporate, commercial and tax law, particularly in the FMCG sector”
Legal 500 Europe Middle East and Africa 2013

Опыт

Subsoil Use Regulation and Project Development
  • Advised a major European oil and gas company on amendments to its subsoil use contract relating to expansion of the contract area and continuation of operations at the field.

  • Advised Kazakhstan’s national oil and gas company on amendments to a subsoil use contract in connection with the transition of a project from exploration to commercial production.

  • Advised one of the largest European oil and gas companies on negotiating and drafting amendments to a production sharing agreement (PSA).

  • Advised an oil company on the third stage of development of a field in the Mangystau region, including the development of associated oil and gas infrastructure and related regulatory matters.

  • Advised a major oil and gas producer on the extension of a package of four agreements covering the development of four fields in Kazakhstan.

  • Participated in negotiations with government authorities on subsoil use contracts and amendments for a number of oil and gas companies and assisted with obtaining the required regulatory approvals.

  • Drafted documentation and participated in negotiations on several hydrocarbons exploration and production projects, including an offshore PSA and investments in existing oil and gas projects.

  • Advised a major European company on expansion of the contract territory under an existing subsoil use contract.

  • Supported oil and gas companies in preparing and obtaining approvals for project and technical documentation, including exploration projects, trial production projects, development programmes, technological schemes and reserve approvals.

  • Advised international and Kazakhstan clients on a broad range of oil, gas, gold, copper, uranium and other natural resources projects.

M&A and Transfers of Subsoil Use Rights
  • Provided comprehensive legal support to a group of Norwegian investors and investment funds on the acquisition of a portfolio of oil and gas projects in Kazakhstan with an aggregate transaction value of approximately USD 1 billion.

  • Advised an international exploration and production company on the contemplated sale of an oil and gas project valued at approximately USD 77 million.

  • Advised on the structuring of the sale of 100% of the shares in an oil production company in a transaction valued at approximately USD 515 million, including the Kazakhstan regulatory aspects.

  • Provided comprehensive legal support for the acquisition of an oil and gas project valued at approximately USD 32 million, including transaction documentation and obtaining the required government approvals.

  • Advised a European oil and gas company on the acquisition of a 100% interest in a Kazakhstan oil and gas company in a transaction valued at approximately USD 15 million.

  • Represented an Australian publicly listed oil and gas company on the acquisition of several fields and exploration blocks in Kazakhstan.

  • Advised a UK oil and gas company listed on the Toronto and London stock exchanges on the acquisition of two Kazakhstan oil and gas projects.

  • Advised an Australian public company on the transfer of subsoil use rights in Kazakhstan.

  • Advised on the sale of an interest in an oil project operating under a PSA in Western Kazakhstan, including approval of the competent authority, the state’s waiver of its pre-emptive right and required competition clearances.

  • Provided comprehensive legal support for the sale of a 100% interest in an international oil and gas company conducting hydrocarbon exploration in the Kyzylorda region to a group of foreign investors.

  • Advised an international investor group on an agreement for the transfer of rights relating to an oil and gas field in Western Kazakhstan.

  • Represented an Australian mining company in the acquisition of an interest in a Kazakhstan company holding rights to gold mining assets.

  • Conducted comprehensive legal due diligence of oil and gas, gold mining and other subsoil assets for international investors, financial institutions and foreign law firms.

Joint Ventures and Corporate Structuring
  • Advised Kazakhstan’s largest state-owned oil and gas company and an international Fortune 500 chemicals company on establishing a joint venture for a gas processing plant project in Zhanaozen.

  • Advised a world-leading gas and engineering company on the establishment of a joint venture in connection with a major gas processing project in Kazakhstan.

  • Structured a joint venture between the national oil and gas company and foreign investors for the further development of a portfolio of mature fields.

  • Structured joint activities between an international consortium of investors and the national oil and gas company in connection with hydrocarbon exploration and production projects.

  • Advised the national uranium company and a major international uranium producer on establishing a joint venture for projects in Kazakhstan.

  • Structured an Italian-Kazakhstan service joint venture for offshore oil and gas projects.

  • Advised a global leader in offshore and onshore engineering and geophysical surveys and a leading Kazakhstan engineering company on structuring their joint activities and preparing the principal project documentation.

  • Advised the national oil and gas company on potential risks relating to the management of a joint venture.

Contracts and Operations
  • Drafted agreements for the transportation of hydrocarbons through Kazakhstan and other jurisdictions to Western markets for a major European oil and gas company.

  • Drafted a joint development agreement for consortium participants conducting exploration and production activities in Western Kazakhstan.

  • Drafted drilling services agreements covering approximately 30 wells for a major drilling contractor, with detailed provisions on liability, insurance and risk allocation.

  • Drafted a FIDIC-based turnkey agreement for the design, supply of equipment and materials and construction of a pipeline for a major oil producer in Western Kazakhstan.

  • Advised a major offshore subcontractor on Kazakhstan maritime law and vessel operations, including bareboat charter agreements and registration of vessels at the Aktau seaport.

  • Advised a participant in the Caspian Pipeline Consortium on the proposed sale of its interest, including compliance with transfer restrictions under the consortium’s constitutional documentation.

  • Advised major oil and gas companies on export customs duties, exports of petroleum products and applicable quota requirements.

Regulatory, Environmental and Permitting Matters
  • Provided ongoing support to major oil and gas companies on compliance with regulatory requirements, including obtaining licences, permits and approvals required for petroleum operations.

  • Conducted comprehensive regulatory health checks of oil and gas and mining companies and developed recommendations to address identified risks.

  • Assisted a major European oil and gas company with obtaining an industrial licence for the installation and repair of drilling and oilfield equipment and expanding the scope of its licensed activities.

  • Assisted with obtaining the full range of permits required for the construction of an artificial island and operational camp in the Caspian Sea.

  • Assisted with obtaining licences, permits and approvals for construction of a pipeline from an oilfield to a central processing facility.

  • Advised oil and gas companies on gas flaring permits and related environmental requirements.

  • Assisted with obtaining licences and permits for the use of chemicals, precursors and radioactive materials in oil and gas operations.

  • Advised a European oil and gas company on environmental aspects of pipeline construction in a coastal area.

  • Assisted clients with obtaining environmental and water use permits.

  • Advised an oil and gas company on environmental impact assessment requirements applicable to a trial production project.

Subsoil Use Disputes
  • Represented an international oil company in proceedings challenging the unilateral termination of its subsoil use contract by a government authority.

  • Represented a major oil company in challenging a notice issued by the competent state authority alleging breaches of a subsoil use contract, including proceedings before the Supreme Court of Kazakhstan.

  • Represented an international oil company in a dispute concerning extension of a subsoil use contract due to force majeure circumstances.

  • Represented a subsoil user in a dispute with geological authorities concerning alleged damage resulting from deviation from approved production parameters.

  • Represented subsoil users in major environmental disputes involving claims relating to gas flaring, extraction of common minerals, oil spills and well accidents.

  • Represented a PSA operator in a dispute with sanitary authorities arising from the suspension of operations at an oil field.

  • Represented a PSA operator in a dispute with customs authorities concerning restrictions on the import of equipment required for an oil and gas project.

  • Represented oil and gas and mining companies in commercial disputes with contractors and service providers, including drilling, construction and oilfield services disputes.

Taxation of Subsoil Users
  • Advised international oil and gas companies on the stability of special tax regimes established under PSAs and subsoil use contracts.

  • Represented a PSA operator in major litigation arising from a comprehensive tax audit involving additional assessments exceeding USD 70 million.

  • Successfully represented two international oil companies in litigation against the tax authorities concerning the stability of previously executed PSAs.

  • Supported a major subsoil user during a comprehensive tax audit involving potential additional assessments of approximately USD 50 million.

  • Successfully resolved a significant part of a uranium producer’s tax dispute at the pre-litigation stage, resulting in the tax authorities abandoning claims exceeding USD 10 million.

  • Advised a key producing asset of an international oil and gas company listed on the London Stock Exchange on taxes and subsoil user payments arising from the commencement of commercial production following successful exploration.

  • Advised Kazakhstan’s national oil and gas company on taxes and subsoil user payments applicable upon transition to commercial production.

  • Conducted comprehensive tax due diligence in connection with the indirect USD 21 million acquisition of a Kazakhstan subsoil user through a reverse takeover on the London Stock Exchange.

  • Advised buyers on tax aspects of acquisitions of companies holding hydrocarbon production contracts.

  • Represented international oil and gas companies during tax audits and litigation involving transfer pricing matters.

Employment and Workforce Matters
  • Represented a consortium of service companies involved in one of the largest oil and gas condensate projects in Western Kazakhstan in a dispute with a trade union representing more than 3,000 employees.

  • Advised major oil and gas companies on rotational work arrangements, working time and rest periods and regional compensation requirements.

  • Advised oil and gas and uranium companies on secondment of foreign specialists and work permit requirements.

  • Developed collective bargaining agreements, employment agreements and internal HR policies for oil and gas, uranium mining and processing businesses.

  • Represented oil and gas and service companies in individual and collective employment disputes, including disputes with senior executives and former employees.

  • Participated on behalf of an oil company in the investigation of a workplace accident.

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