Subsurface use licensing

is getting government authorization in the form of a license that certifies its holder's right to use a subsurface area within defined boundaries, with specified goals, terms and conditions of use. Discovered deposits and prospective areas form the national fund of subsurface resources, which is divided into the distributed (licensed) and undistributed funds. The latter includes the federal stock of reserve deposits, for which a production license may be issued on a sole source basis. The licensing system envisages commercial subsurface use. Subsurface users effect license payments (fee for participation in competitive tenders and bids, license issuance, information pack and initial payments for hydrocarbons extraction) and appraisal program payments. In 2001, the severance tax on oil and/or gas was introduced. Payments for field exploration within property boundaries are not collected. Subsurface users shall provide geological information and valid reserves inventory data to the national and territorial funds. The licensing system is aimed at supporting the government-run programs on geological exploration and development of oil and gas reserves, market relations development, anti-monopoly policy implementation, rational use and conservation of subsurface resources.