FSU/ Eastern Europe: Uzbekistan
August 2000 Vol. 221 No. 8 International Outlook FSU/EASTERN EUROPE Interfax Petroleum Agency, Moscow Uzbekistan In late April, Uzbek President Islom Ka
FSU/EASTERN EUROPEInterfax Petroleum Agency, Moscow UzbekistanIn late April, Uzbek President Islom Karimov signed a decree promoting direct foreign investment in oil and gas. Under the decree, foreign firms that discover fields in Ustyurt region (western Uzbekistan) may receive 25-year concessions to develop them, with an extension option. The decree specifies several other preferential terms, including exclusive rights to explore territory with subsequent production under a joint venture or concession. A firm that fails to find oil or gas will receive preferential rights to explore other areas. Any oil and gas produced will belong to the field operator. Investors will receive a guarantee on recouping exploration expenses, if they discover a field and develop it. National oil firm Uzbekneftegaz regulates E&P operations, and manages concessions. Foreign investment totals $1.2 billion.
Resources. About 60% of the country holds promise for exploration. Of 171 fields discovered, 95 actively produce (51 oil, 27 gas and 17 condensate). Remaining reserves at explored fields or those under development total 63.6 Tcf of gas and about 730 million bbl of oil. Reserves can maintain production over the next 10 to 12 years. Gas is produced at 52 fields 95% of output is at the 12 largest fields, such as Gazli, Zevardi, Alan, Pamuk and Dengizkul-Khauzak. All are in the west, close to Turkmenistan, and largely depleted. Exploration work is underway in five regions: Bukharo-Khivinsky, Gissarsky, Karakalpak, Surkhandarinsky and Fergana. The most promising regions are Karakalpak (Ustyurt plateau) and Fergana. Top oil and gas officials have a slightly different list, embracing areas in western Uzbekistan. These include the Ustyurt region (including the Ustyurt plateau) and the southern section of the Aral Sea and adjacent lands. Privatization. About 49% of shares in Uzbekneftegaz (which includes eight stock companies) will be sold to foreign investors in 2001. Up to 44% of the stock of Uzneftegazdobycha and 39% of Uzneftepererabotka and Uzburneftegaz divisions also will be tendered. Projects. Investment in production at fields onstream or those under development totals $242 million. Included is a $25-million project to boost output at Umid and South Kemachi fields in Kashkadarya. The project will increase output by 2,000 bopd, 660 bcpd and 200 MMcfgd. Others are the $45-million replacement of pump stations at the underground storage facility at Gazli field and the $20-million development at Kokdumalak field to produce 57,000 t of LNG and about 650 bcpd. Several projects that might attract foreign firms have been identified. For instance, Kuanysh Block (68 by 15.5 to 25 mi) is in the former northern Aral Sea and the eastern Ustyurt plateau. Deep drilling in the western portion has totaled 21 wells. The block includes Kuanysh gas / condensate field, producing at wellhead rates of 9 to 13 MMcfgd from between 10,500 and 10,825 ft. Meanwhile, Romanias R.P.T. Oil Holding S.A. and Uzgeoneftegazdobycha set up a joint venture, Uzromneftegaz, for a $10-million development of Zafar gas / condensate field in Kashkadarya. Peak output is projected at 6,660 bcpd and 13.5 MMcfgd. The first well goes onstream in January 2001. Baker Hughes and Uzbekneftegaz have an $8.1-million PSA project underway, to boost output to 2,000 bopd at North Urtabulak field in Bukhara. Production/drilling. Uzbekneftegaz produced 161,335 bpd of oil and condensate, up 0.2% from 1998s level. That level rose from 59,750 bopd in 1990. Gas output in 1999 was 5.4 Bcfd, 1.4% more than in 1998. The company plans to invest $500 million to $600 million in exploration over the next five years. Deep drilling may rise to more than 650,000 ft/year by 2005. The firm plans to drill at least 295,000 ft in 2000.
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