The following extract from "Doing Business in Kazakhstan" by...

The following extract from "Doing Business in Kazakhstan" by Baker McKenzie (an international law firm) helps to explain the complexities of being granted a Production Licence.

from:

http://www.bakermckenzie.com/files/Uploads/Documents/Supporting%20Your%20Business/Global%20Markets%20QRGs/DBI%20Kazakhstan/bk_dbi_kazakhstan_oilgas.pdf


"Production contracts are concluded for 25 years.

A contract for production at a deposit with recoverable reserves exceeding 100 million tons of crude oil and/or exceeding 100 billion cubic meters of natural gas may be concluded for up to 45 years.The effective period of a production agreement may be extended if the contractor applies for an extension no later than 12 months prior to the expiration of the effective period of the contract.

The specific terms of the contract are determined by an agreement between the parties in accordance with applicable laws. Every subsoil use contract must reflect the conditions of the Model Subsoil Use Contract, although it is simply a framework which may be modified to meet the specific requirements of the transaction

Before a contract is signed it must undergo, among other things, economic, tax, ecological, and legal expert examination and must be approved by the executive agencies responsible for sanitation, health and safety.

The contract must also be registered with the Ministry of Energy and Mineral Resources and becomes effective from the date of registration, unless the parties agree that it will become effective at a later date."

No wonder the granting of a Production Contract takes so long and requires so much local input; thus the essential hiring of local Kazakh's to submit the necessary paperwork for approvals.

Just as well we have Waterford and Soyuzneftegas on board to help navigate the Kazakhstan system as it does not appear that Chairman Gander had the necessary skills required for the next phase of the JPR Production Contract(s).