MOSCOW, May 12, (RIA Novosti) - The Natural Resources Ministry of Russia has proposed that production sharing agreements to develop shelf deposits should be concluded by simplified procedure. The Ministry will submit its proposals to a cabinet meeting on Thursday.
The procedure for drawing up and implementing the PSA is an involved and multi-staged process. Before it begins to be carried out it is necessary to pass through 28 stages of preparation and coordination. As a result, the procedure is stretched for two or three years.
In this connection, the Ministry considers it "necessary to de-bureaucratize the PSA process and offers one of the possible schemes to simplify the drafting and concluding such an agreement.
Under the scheme, the procedure may consist of four stages and require five to six months to draw up one PSA draft. In that way, the overall period of concluding the PSA is shortened to one-sixth of the previous time.
To organize a PSA, as suggested by the Ministry, it is necessary to have a government decision defining sites of the subsoil which can be given to an investor on PSA terms.
In the second stage a specially authorized state body holds a tender for the development of these sites by inviting the biggest world oil companies. Following that the government endorses members of a consortium, and also their shares in it.
At the last stage, as proposed by the Ministry, the authorised body on behalf of the government signs with the consortium a production sharing agreement for the development of shelf deposits.
