Kazakhstan will establish a Roadmap to extend the life of oil fields.

The Chairman of the Board of the National Company KazMunayGas JSC Alik Aidarbayev made such a proposal during the meeting of the Committee of the Oil and Gas Industry of the Presidium of the Atameken NCE RK. Previously, President Kassym-Jomart Tokayev raised the issue of increasing the oil recovery factor and the need to develop new oil fields at an enlarged meeting of the oil and gas industry.

It should be noted that business has repeatedly raised the issue of development of new fields and additional exploration of such fields as Zhanaozen but such work requires large investments.

"We need an effective system of economic regulation. Perhaps we should look at the experience of our Russian colleagues in terms of tax breaks. Today in Zhanaozen, for example, the oil recovery factor is 0.3, and it is needed to grow to 0.5. For this purpose, we need to apply incentive measures specifically for this field. We should be focused on certain fields and introduce technologies there," Alik Aidarbayev said.

According to the speaker, there are fields in Kazakhstan that require high costs for oil production, and there are no other ways to stimulate it. In turn, Committee Chairman Daniyar Abulgazin proposed to develop the Roadmap by the end of 2020.

"First of all, it is necessary to carry out a large-scale inventory of oil reserves and understand which of them should be stimulated. I propose to complete the work by September 2020 and present the Roadmap," Daniyar Abulgazin suggested.

Also during the meeting, the issue of the subscription fee for data transfer from oil products metering devices was raised. The operator, providing automated online data transmission, was determined by NIT JSC. Today, the monthly subscription fee is 4,150 tenge per month for one metering control device.

"This is a heavy load on the business. The business entities must bear fixed and unreasonable costs to provide the state revenue authorities with the necessary information through an intermediary. At present the retailers of oil products are ready to pay for services on granting of access to a personal office of E-Sapa information system for accounting of certain types of petroleum products, but the sum of a monthly user's payment should not exceed 1,500 tenge for one filling station, similar to a user's payment on data transmission from control and cash machines," the Chairman of the Kazakhstan fuel association Bolat Auetayev said.

In Kazakhstan, there are about 4,000 filling stations, each of them has at least 5 reservoirs. As a consequence, retailers must pay about 1 billion tenge per year for the services of the NIT JSC. For example, the cost of services for PetroRetail LLP will be about 90 million tenge per year, for Helios LLP – 70 million tenge.

"This is a burden on business, we need to raise this issue. When the norm was introduced, the business incurred multimillion-dollar expenses for the introduction of the metering device. It is more correct to exclude payment for these services in general, because if the initiator of introduction of metering device and data transfer is the authorized state body or the government, then the services of NIT JSC should be paid for by the state, but not at the expense of business entities," the Chairman of the Committee emphasized.

Remind that from 1 January 2019, according to the law "On state regulation of production and turnover of certain types of petroleum products", petroleum products should be produced and sold using a metering device and with the transfer of data online to the authorized body - the State Revenue Committee of the MF RK. This norm allows state authorities to increase tax payments.

Another important topic of discussion was the new environmental code. Kazakhstan has been developing the Code since last year. According to the Concept, the enterprises that harm the environment will bear high responsibility on the principle of "polluter pays".

In turn, subsoil users note that within the working group, the issues related to a significant increase in the rates of payment for emissions, with the exception of certain rates of payment for emissions from flaring and the lack of the necessary incentives in the submitted projects related to the cost of implementing the best available technologies, are not properly discussed.

"We do not have good coordination with the economic bloc of the government and the documents accompanying the code are not considered. We, together with the Association of Mining and Metallurgical Enterprises and the Kazakhstan Energy Association, have given our negative industry opinions on the issues raised under the new code. We have a lot of comments," Bolat Akchulakov, General Director of KAZENERGY Association, said.

Industry associations believe that the draft Environmental Code is a significant document for all sectors of the economy, and its development should be carried out with a simultaneous discussion of related draft laws, primarily fiscal ones.