Subsoil Users And NIOKR (Research & Development)

Introduction

In the beginning of 2012, the Subsoil Law¹ (the "Law") was amended² with the provisions of subsoil users' obligation to finance annually scientific research, scientific technical and development works ("NIOKR³").

Considering the stability guarantees of contracts, such obligation arises for the subsoil users of hydrocarbons or solid minerals only if it is directly set out in their subsoil use contract (including by amendments to the contract).

According to the Article 76.12-1 (Subsoil User' Obligations) of the Law, subsoil users are obliged to finance annually NIOKR, performed by Kazakhstani suppliers of goods, works and services in the amount of not less than 1 % of the aggregate annual income under contractual activities upon results of the previous year.