Жарияланымдар

The Decree #1950 of the President of the Republic of Azerbaijan dated March 19, 2020 regulates a number of measures to reduce the negative impact of the coronavirus pandemic (COVID-19) and, as a result, sharp fluctuations in world energy and stock markets for the economy of the Republic of Azerbaijan, macroeconomic stability, employment and entrepreneurship.

World Health Organization has characterized the outbreak of COVID-19 infection as a pandemic. More and more countries are closing borders, restricting people’s movement, banning public gatherings, and controlling trade. Such measures have already hit hard tourism, air transportation, hospitality services. Other business sectors are expected to suffer in the coming weeks and months.

The Procurement Rules play an important role in the day-to-day activities of the petroleum companies operating in Kazakhstan, considering that requests to clarify procurement issues constitute 55% of all requests for clarification of subsoil use issues sent to the Minister of Energy’s blog in 2019. This article reviews how the Procurement Rules are applied and the proposed amendments that will change or facilitate the procurement process.

If an investor wants to engage in oil and gas exploration or production in Kazakhstan, the first step is to obtain a subsoil use right (SUR) through a contract (SUC). An investor may obtain a SUR either directly (acquiring it from a current subsoil user or from the state) or indirectly (by buying shares in a subsoil user or its direct or indirect parent company (“objects linked to SUR” - Objects). Another option is to work in cooperation with a national company that has the right to obtain a SUR from the state through direct negotiations. Otherwise the SUR can be obtained from the state only at auction (Auction). The last option is to obtain a SUR or Objects through a public sale by a pledgeholder or bankruptcy manager during an enforcement process.

The Order of the First deputy of the Prime-Minister of the Republic of Kazakhstan – the Minister of finance of the Republic of Kazakhstan dated 13 April 2020 No. 379 “On amendment of the order of the First deputy of the Prime-Minister of the Republic of Kazakhstan – the Minister of finance of the Republic of Kazakhstan dated 26 December 2019 No. 1424 “On approval of the List of goods subject to accompanying notes issue as well as the Rules on their issue and circulation” (hereinafter – the ‘Order’) was published on 15 March 2020.

The declaration of a state of emergency in the light of the COVID-19 epidemic, the following quarantine, the related restrictions, the fall in oil prices and the subsequent devaluation of tenge, together will have a serious negative impact on the financial situation of whether debtors or creditors. This can lead both to the need to protect debtors from the claims of creditors, and to protect the interests of creditors in order to avoid abuse by the debtors. Therefore, we considered it appropriate to remind readers of the main insolvency resolution regimes that are available to creditors and debtors under the Law of the Republic of Kazakhstan On Rehabilitation and Bankruptcy.