Areas of the Legal Regulation of Solving the Oil Industry Problems in the Modern Russia within the Framework of the Energy Strategy

Occupation: Head of the Laboratory of Legal Issues of Subsoil Use, Ecology and Fuel and Energy Complex of the Academy of Sciences of the Republic of Tatarstan
Affiliation: Institute of Ecology and Subsoil Use Problems of the Academy of Sciences of the Republic of Tatarstan
Address: Russian Federation, Kazan

Journal name

Energy law forum

Edition

Issue 2

Pages

75-79

Abstract

In market conditions, the economic assessment of oil and gas resources is dual in nature. It should reflect both the interests of the state, which is the owner of the subsoil, and the subsoil users acquiring a license (permit) from the state for the right to retrieve, explore and develop hydrocarbon fields. It seems that it would be reasonable to provide for a mechanism for testing and presenting the results of assessing undiscovered resources to include the information on undiscovered resources in the state cadastre of deposits and occurrence of oil and gas. It is also necessary to substantiate and develop measures aimed at increasing the investment attractiveness in the sphere of geological study of subsoil including subsoil containing fields with unconventional hydrocarbon types as well as improving the efficiency of works in this sphere carried out both at the expense of a subsoil user and at the expense of the state.

Keywords

energy law, legal regulation in the oil industry, legal regulation of hard-to-recover resources

Received

01.06.2021

Publication date

30.06.2021

Number of characters

13632

Cite Download pdf

GOST	Salieva R. Areas of the Legal Regulation of Solving the Oil Industry Problems in the Modern Russia within the Framework of the Energy Strategy // Energy law forum – 2021. – Issue 2 C. 75-79 [Electronic resource]. URL: https://mlcjournal.ru/S231243500022399-6-1 (circulation date: 29.04.2024). DOI: 10.18572/2410-4396-2021-2-75-79
MLA	Salieva, Roza N "Areas of the Legal Regulation of Solving the Oil Industry Problems in the Modern Russia within the Framework of the Energy Strategy." Energy law forum 2 (2021):75-79. DOI: 10.18572/2410-4396-2021-2-75-79
APA	Salieva R. (2021). Areas of the Legal Regulation of Solving the Oil Industry Problems in the Modern Russia within the Framework of the Energy Strategy. Energy law forum (2), pp.75-79 DOI: 10.18572/2410-4396-2021-2-75-79


1	In accordance with the Energy Strategy, the oil industry has the following tasks aimed at meeting the demands of the socioeconomic development of the Russian Federation by ensuring the appropriate volumes of production and export of products and services of the fuel and energy complex industries: Ensuring a stable, growing level of oil production in favorable conditions; Improving the efficiency, availability, and quality of meeting the national demand for petroleum products.
2	The Energy Strategy also defines a set of key measures to accomplish these tasks. In particular, such measures include: Transformation of the taxation system from turnover taxation to taxation of financial results and other measures to create conditions for the growth of investments in the industry ensuring monetization of the resource potential of the oil industry and achievement of a strong multiplicative effect in the related sectors of the economy; Comprehensive encouragement of the development of mature fields; Introduction of small fields, marginal and high-water-cut wells, hard-to-recover reserves (including the Bazhenov suite) into economic circulation as well as creation of conditions for the development of small and mediumsize enterprises in this sphere, primarily based on innovative national technologies and equipment; Creation of technological test sites for the development of technologies for economic production of crude hydrocarbons from hardto-recover reserves; Development of a national market for maintenance, engineering and construction services in the oil industry and expanding the involvement of Russian companies in it.
3	The measures listed in the strategy require appropriate legal regulation. Based on the provisions of the strategy, one can single out the main legal regulation areas in order to accomplish the planned tasks and mark the relevant legal means.
4	The first area is laying the legal ground work for the conditions of the growth of investments in the industry ensuring monetization of the resource potential of the oil industry and the development of the related industries.
5	The improvement of legal regulation of subsoil use should be attributed to one of the legal means in this area. The Government of the Russian Federation has approved the Action Plan for the Implementation of the Strategy for the Development of the Mineral Resources Base of the Russian Federation until 2035 (for 2019 to 2024). One of the important issues is the assessment of undiscovered resources. Since the presence of mineral resources in the subsoil remains one of the most important competitive advantages of the Russian economy, the issues of assessing mineral reserves and undiscovered resources are equally relevant. Oil, gas, and gas condensate resources are assessed from the geological and economic standpoint in order to develop realistic views of the scale, structure, qualitative characteristics, and economic significance of the potential mineral resources base of the oil and gas industry. In market conditions, the economic assessment of oil and gas resources is dual in nature. It should reflect both the interests of the state, which is the owner of the subsoil, and the subsoil users acquiring a license (permit) from the state for the right to retrieve, explore and develop hydrocarbon fields. It seems that it would be reasonable to develop a mechanism for testing and presenting the results of assessing undiscovered resources to include the information on undiscovered resources in the state cadastre of deposits and manifestations of minerals with respect to oil and gas. It would be advisable to regulate at the level of the Ministry of Natural Resources of the Russian Federation the procedures for the geological and economic assessment of undiscovered resources and the procedure for presenting information for the inclusion of data on undiscovered resources in the state cadastre by types of minerals, as the state cadastre includes information on fields with mineral reserves not yet registered by the State Register of Mineral Reserves but having assessment works (provided that the geological and economic assessment is positive) or exploration completed.
6	It is also necessary to substantiate and develop measures aimed at increasing the investment attractiveness in the sphere of geological study of subsoil including subsoil containing fields with unconventional hydrocarbon types as well as improving the efficiency of works in this sphere carried out both at the expense of a subsoil user and at the expense of the state. Such measures can be provided for in regulatory acts in the form of tax and other benefits as well as in the form of state support and state participation in financing by concluding agreements on investment, joint venture, public-private partnership aimed at the encouragement of the introduction of promising production technologies and intensification of retrieving and exploration operations.
7	1. The second area can be legal regulation of comprehensive encouragement of the mature field development. This area stipulates further improvement of laws on the revenue added tax (RAT). Thus, for example, Federal Law No. 342-ФЗ of October 15, 2020, On Amendments to Chapters 25.4 and 26 of Part Two of the Tax Code of the Russian Federation [1] expanded the list of group 3 subsoil plots where RAT is applied to the extraction of crude hydrocarbons due to depleted fields and fields located in the territory of the constituent entities of the Russian Federation located in the North Caucasian Federal District and on the territory of the Sakhalin region. 2. Another area is legal regulation of the introduction of small fields, marginal and high-water-cut wells, hard-to-recover reserves (including the Bazhenov suite) into economic circulation as well as legal regulation of creation of conditions for the development of small and medium-size enterprises in this sphere, primarily based on innovative national technologies and equipment.

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1. Federal Law No. 342-AP of October 15, 2020, On Amendments to Chapters 25.4 and 26 of Part Two of the Tax Code of the Russian Federation // Official Internet portal of legal information. URL: http://www.pravo.gov.ru, October 15, 2020.

2. Gavrin A.S. A Market without Small and Medium-size Enterprises Does not Exist / A.S. Gavrin // Oil, Gas and Business. 2000. No. 6. P. 5. ; Gorety M.V. On the Issue of Defining the Concept and Characteristics of Small-size Enterprises in the Oil Industry / M.V. Gorety // Taxes Newspaper. 2006. No. 20.

3. Order of the Government of the Russian Federation No. 2914-r of December 22, 2018, On the Approval of the Strategy for the Development of the Mineral Resources Base of the Russian Federation until 2035 // Legislative Corpus of the Russian Federation. December 31, 2018. No. 53 (part II). Art. 8762.

4. Decree of the Government of the Russian Federation No. 1499 of September 19, 2020, On the Establishment of Types of Hard-to-Recover Minerals, in Respect of Which the Right to Use a Subsoil Area May Be Granted for the Development of Technologies for Geological Study, Exploration and Production of Hard-to-Recover Minerals // Official Internet Portal of Legal Information. URL: http://www.pravo.gov.ru, September 23, 2020.

5. Federal Portal of Drafts of Regulatory Acts. URL: https://regulation.gov.ru/projects#npa=97371.