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Working meeting with Natural Resources and Environment Minister Sergei Donskoy

By   /   March 20, 2017  /   Comments Off on Working meeting with Natural Resources and Environment Minister Sergei Donskoy

MIL OSI – Source: President of Russia – The Kremlin – English – Press Release/Statement

Headline: Working meeting with Natural Resources and Environment Minister Sergei Donskoy

President of Russia Vladimir Putin: Mr Donskoy, we discussed with you on many
occasions the question of effective subsoil use. I know the Ministry has prepared a range of instruments, including work with licences. Let us
talk about this now.Natural Resources and Environment Minister
Sergei Donskoy Donskoy SergeiMinister of Natural Resources and Environment : Yes,
Mr President.Let me
begin by saying that a new system for subsoil resource use began taking shape
25 years ago, with the adoption of the law on subsoil resources. Over this
time, practically all of the discovered deposits have been distributed among
subsoil users. The share of unallocated subsoil resources is 3 percent for diamonds,
for example, around 5 percent for natural gas, 6 percent for oil, and 6.9–7
percent for copper. Today, we are shifting our focus from subsoil resource
distribution to ensuring that resources are used effectively. Let me brief you on what we have done over this time to resolve this task.
Firstly, we have modernised and essentially put in place a new system of preparing and approving detailed engineering plans, in order to rationalise
subsoil resource use. We have introduced a new classification for oil and gas,
which conforms to the framework classification used by the UN. We signed the relevant document harmonising these two classification systems with the UN last
autumn. We have set new rules for processing
geological data, making it more accessible and rapidly updated. Acting on your instructions, we have
updated licences, as I briefed you at an earlier meeting. We have now completed
this one-off updating. We have covered 5,326 licences, of which 70 percent were
updated, while the holders of the remaining 30 percent did not go ahead with
updating, for various reasons. Those 30 percent are now under our special supervision.I would
also like to note that this updating enabled us to include in the licences
clearer obligations that make monitoring more effective. Practically all
licences now set deadlines for carrying out geological exploration, providing
geological data, and much more.Vladimir Putin: These obligations have become more specific.Sergey Donskoy: Yes, more specific and clearer, and this means we can now continue our
work to improve the supervision of subsoil resource use. At the same
time, we passed several laws that made it possible to provide subsoil resource
deposits to resource users for geological exploration on declarative basis.
When investment in geological exploration was falling all around the world (we
estimate that it fell around 2.8-fold in the world), it stabilised here, and this is important, and we believe that the measures we took contributed to this. Investment coming in through this new system now comes to around 28 billion, which is comparable to state financing. The time
allowed for geological exploration has also been increased. In remote and difficult zones where more time is needed for exploration, we have made this
possible. The timeframe has increased by 40 percent, from 5 to 7 years, on land, and exploration can now take up to 10 years offshore. We have introduced
economic incentives, particularly through eliminating excess costs and administrative barriers. We give users the possibility to correct technical
mistakes in licences and change the boundaries of their licenced sections. The state expert evaluation of planned wells, which duplicated work already done,
has been abolished. Extraction of associated components is now allowed (only
for state companies for now, but as we pick up the pace in this work, we plan
to extend it to a broader range of companies). It is also possible now to use
land plots and forest tracts for subsoil resource use purposes. Overall, we
think that these measures have made it possible to make this work independent
of external challenges, and recent years confirm this. Now, we have completed the improvement work and have cleansed the stock of licences of outdated obligations
that were either generally obsolete or do not meet current demands, and we
think that the conditions are now in place for a better performing sector. To achieve this, we first need to bring order to subsoil resource use through
stricter supervision. If necessary, we are looking at the possibility of revoking the licences of subsoil resource users that fail to comply with the requirements. As I said, the licences now set out clear requirements. In other words, the decision-making process is clearer now. To be continued.

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