Oil, gas and mining industries are the basis of the Russian economy today.
Mining segment has seen intensive growth in the last two decades. About 250 companies operate in the sphere of oil production. In gas industry, dominated by such major players as Gazprom and Novatek, it would be rather difficult for a medium-size or small business player to grow further, taking into account specific aspects of access to arterial pipelines.
In accordance with the Energy Strategy of the Russian Federation, the government is going to take steps aimed at further extension of the resource base, development of new fields and bringing such fields into a full-scale production process. According to the Ministry of Energy of the Russian Federation, implementation of the General Plan for Oil Industry Development will require over 8 trillion roubles. A number of large-scale projects relating to oil refining processes and oil and gas transportation (including liquefied natural gas) are to be launched before 2020.
In 2010 the government of the Russian Federation has approved the Exploration Sector Development Strategy until 2030. The Strategy outlines a framework of regulatory and legal measures aimed at achieving improved investment image of geological exploration activities, removal of administrative barriers, and scientific, methodological, information and staffing support for geological exploration surveys.
This demonstrates, first of all, the increasing investment need of the oil and gas industry (and the need for foreign investments as well). Second, it shows that the nation’s leaders realise that some steps shall be taken in order to improve Russia’s investment image, specifically in this area.
Of course, sanctions imposed on Russia’s oil and gas industry by the USA and the EU are adversely impacting the investment efforts in this sector. At the same time, the economic crisis results in lower prices of assets which improves their attention value. Therefore we anticipate a certain increase of foreign investors’ interest to Russian oil and gas assets. At the same time, obviously, some investment projects aimed at modernisation of existing oil-producing and oil-refining facilities will also be implemented.
Having profound knowledge of specific aspects and the overall vector of further development of oil mining and gas mining sectors, the experts of our Law Firm are ready to offer professional legal advice to mining companies, processing enterprises and service companies.
Corporate Consulting, support of Transactions and Investment Projects:
Industry Specific Consulting:
- Support of transactions on assets sale/acquisition and bringing in financial investors (M&A);
- Support of investment projects for construction of new facilities and re-equipment of existing facilities in the oil, gas and mining industries, and specificallyelaboration of contractual structures, preparation of investment agreements, partnership initiatives agreements, subcontractors agreements, and/or other agreements;
- Support in mining companies’ entering Russian and/or foreign market(s), and specifically be means of bond issue;
- Legal and tax due diligence checks of oil and gas mining companies (groups of companies) on request from potential buyers/investors or current owners, and specifically as may be required for entering public capital market;
- Search for effective ownership and management target structures and operational structures for company groups in oil and gas mining, in order to reduce risks and increase assets protection;
- Preparation of corporate agreements between enterprise owners, and corporate agreements with investors;
- Preparation of documents regulating corporate management within the company/group of companies.
- Consulting in industrial regulation and licencing of mining enterprises;
- Consulting in contractual law, elaboration of internal procedures for contracts approval, preparation of standard commercial contracts (delivery, independent work, service, lease and loan contracts, etc.);
- Verification of the internal control system in terms of its compliance with the licence terms of subsoil use and legal requirements applicable to minerals extraction activities, to be adopted within the company (group of companies), in order to discover/eliminate risks which might entail license withdrawal;
- Preparation and legal due diligence check of draft license agreements with respect to the right for subsoil use, legal valuation of applicable license agreements and preparation of drafts with amendments thereto, support during license renewals;
- Draft agreements on geological exploration surveys, on new project designs for field exploration and/or development , on preparation of stock record reports, and on delivery and installation of equipment (EPC contracts);
- Consulting on registration of title for wellsites and/or other immovable property belonging to mine infrastructure.
Tax Consulting and Support in Tax Disputes:
- Contestation of rulings or other non-regulatory acts and/or positive/negative acts of tax authorities in both pre-trial and/or judicial process, and specifically in industry-specific issues (MET, excise taxes);
- Analysis of potential tax risks, extent of tax benefits being applied (application of accelerated depreciation for capital assets operated in hazardous environment) and possible minimisation of tax losses;
- Analysis of transfer pricing, issuing recommendations and contestation of claims by tax authorities.
Support during Litigation and Representation in Government Agencies:
- Representation of client’s interests during proceedings concerning violations of Articles 10 and 11 of the Competition Protection Law which are “typical” for the oil and gas industry, and specifically in terms of charges of abuse due to dominant standing via monopolistically high prices, withdrawal of goods from circulation, imposition of discriminatory terms, entering into arrangements imposing restrictions on competition, concerted actions, etc.;
- Representation of client’s interests in proceedings on administrative offences with charges “typical” for the oil and gas industry as per Articles 14.31 and 14.32 of the Administrative Code of the Russian Federation;
- Representation of client’s interests at courts; contestation of rulings and decisions of antimonopoly agencies concerning violations or charges of administrative offenses “typical” for the oil and gas industry.
- Industry-based commercial disputes in Russian courts and commercial (including industry-based) arbitration courts;
- Representation of mineral mining companies before supervisory agencies (Rostechnadzor, Rosprirodnadzor, Rosnedra), and arbitration courts during disputes with environmental protection agencies; contestation of rulings and orders of supervisory bodies;
- Assistance during preparation for inspections by environmental protection agencies and during such inspections;
- Protection of top managers and owners of mining companies during criminal prosecution due to violation of industrial regulations (above-level mining, violation of subsoil protection regulations);
- Defence of mining companies’ interests in disputes relating to environmental violations against aggrieved government bodies and private citizens (or groups of citizens).