| The Ministry of Natural Resources has influential opponents Today the State Duma will consider in the first reading a new version of the law “On Subsoil”. The main ideologist and developer of the bill, Minister of Natural Resources Yuri Trutnev, will have to fight with deputies, most of whom do not agree that the regional authorities are being deprived of the right to manage the subsoil located on their territory. According to Duma Speaker Boris Gryzlov, amendments to the bill “despite the fact that it is being considered in the first reading are already being formed.” One of the critics of the document yesterday was the rector of the St. Petersburg State Mining Institute, Professor Vladimir Litvinenko, who has long-standing friendly relations with President Vladimir Putin. According to Mr. Litvinenko, the adoption of the law in its current version will lead to monopolism in the market and ruin small companies.
According to the draft law “On Subsoil”, the state refuses to apply the current principle of “two keys”, when the permission to develop subsoil must be signed by representatives of federal and regional authorities. Therefore, the distribution of valuable minerals, such as oil, gas, metals and precious stones, will be handled by the federal center. The subjects are left with sand, gravel and similar resources. In addition, the authors of the bill propose to introduce a category of strategic deposits, access to which will be limited for foreigners, and to replace licenses with civil contracts with companies for subsoil development (if a government agency has the right to take away a license, then the contract is terminated only through the court). It is also proposed to form a secondary market for deposits, when companies will actually be able to sell the areas at their disposal to each other. Now, when a license is issued for a specific subsoil user, holding companies have to sell the company operating the field to carry out such transactions, but the new law simplifies the procedure. The document also provides for a complete rejection of the distribution of subsoil through competitions. They will be replaced by auctions in which the winner will be determined by only one criterion - the amount of payment for the field.
Mr. Litvinenko told Interfax yesterday: “By adopting the law in the wording in which it currently exists, we are actually monopolizing the market. A situation may arise when 10-20 companies will be engaged in oil production instead of 200-300, and we will turn the producing companies into good speculators who will buy deposits for money (at auctions - Ed. ) and pay for a year or two taxes and do nothing, and then resell these deposits, receiving larger dividends than the production brings.”
The Ministry of Natural Resources categorically disagrees with this point of view. As one of the officials told Vremya Novostei, “the experience of holding auctions has shown that small deposits go to small companies, medium ones to medium-sized ones, and large ones to large ones.” So, in his opinion, there is no question of monopolism.
Deputies are also not satisfied with many things in the law, including the abolition of the “two keys” principle. However, despite this, the Committee on Natural Resources and Environmental Management of the State Duma two weeks ago recommended adopting the bill in the first reading. “Deputies and representatives of the regions, supporting the concept of the law, believe that it needs to be significantly improved for the second reading,” Mr. Gryzlov said yesterday. At the same time, according to the speaker, the adoption of the document is a priority task for the autumn session of 2005. He expressed hope that all controversial issues will be resolved during the preparation of the document for the second and third readings, and by the end of the year the law will be supported by deputies.
The authorities are rushing the Duma, because the adoption of the law is a strategic task for them: the state wants to sell large deposits after the new document comes into force. Denis REBROV |
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