RusEnergy

12.05.2005 11:16 MSK - MosNews - The Russian Ministry of Natural Resources proposes simplifying legislation regarding production sharing agreements (PSA) for the development of shelf deposits. The ministry prepared its suggestion for the regular meeting of the Russian government set to take place on Thursday, May 12. The current set of procedures for drafting and implementing production sharing agreements has been called "complex and multi-tiered", Interfax reported. Before the implementation of the PSA can begin the parties have to undergo 28 stages of preparation and coordination. In this context, the Ministry of Natural Resources considers it necessary to de-bureaucratize the process of signing PSAs and offers a possible scheme for simplifying the mechanism for drafting and concluding the agreements. According to these proposals, the procedure would consist of four stages and it would take 5-6 months to prepare a single PSA project. In other words, the total time taken to conclude a PSA would be reduced to a sixth of what it takes at present. The first stage of the process calls for a government decision defining what areas of subsurface resources could be made available to an investor on PSA terms. In the second stage a specially authorized state body would conduct a tender for the right to develop these areas, with major world oil companies invited to bid. After this the government would approve a list of participants in a consortium, as well as the respective stakes held in it by the participants in the tender. At the final stage the authorized state body would, on behalf of the Russian government, sign a PSA with the consortium for development of shelf deposits.