(INITIAL EDITING) PETROLEUM LAW

EDICT WHICH HAS FORCE OF LAW OF THE PRESIDENT OF THE REPUBLIC OF

KAZAKHSTAN The 28th of June, 1995 No 2350

Concerning Petroleum

In accordance with Article 1 of the Law of the Republic of Kazakhstan, dated December 10, 1993 "Concerning the Temporary Delegation of Additional Powers to the President of the Republic of Kazakhstan and the Heads of Local Administrations", for the purposes of ensuring protection of the interests of the Republic of Kazakhstan and its natural resources in the course of Petroleum operations, I am issuing this Edict.

CHAPTER 1. GENERAL PROVISIONS

Article 1. General Concepts and Terms

In this Edict:

"Block" means any territory on land and on water situated completely or partially in the Republic of Kazakhstan and designated as a Block on a specially compiled map of Blocks.

"Internal Water Bodies" means lakes, artificial water bodies, and other water-surface resources.

"Production" means any operations associated with the lifting of Petroleum to the surface and it shall include among other things:

construction and operation of underground and surface industrial equipment and installations;

lifting of Petroleum to the surface, organisation and maintenance of the working process in operational wells;

processing and refining of Petroleum;

extraction of components associated with Petroleum.

"Competent Body" means a governmental authority to which the Government of the Republic of Kazakhstan delegate the rights directly related to conclusion of Contracts.

"Contract" means an agreement between a Contractor and the Competent Body for conducting of Petroleum operations.

"Contract territory" means a territory allocated for conducting of Petroleum operations and which is defined by geographical co-ordinates.

"Commercial discovery" means a discovery in the Contract territory of one or several Deposits [fields] worth of development.

"Licensee" shall a mean a User of the subsurface which became a holder of a Licence.

"Licence" means a permission granted by the Government of the Republic of Kazakhstan to a User of the subsurface for conducting Exploration and Production for a fixed term within a Contract Territory.

"Sea" means the surface and layer of water, the surface of the bottom of the Caspian and Aral Seas (lakes), from the initial coastline of its entire extent within the boundaries of the Republic of Kazakhstan to its exterior marine frontiers which are established on the basis of the treaties between the Republic of Kazakhstan and the Seaboard States.

"Marine Scientific Research" means scientific research work associated with conducting of Petroleum operations at sea.

"Deposit [field]" means one or several natural accumulations of hydrocarbons in a geological reservoir of any type.