Page 12 - FSUOGM Week 46 2021

FSUOGM PROJECTS & COMPANIES FSUOGM

Zarubezhneft in talks to buy stake

in Uzbek oil producer

UZBEKISTAN RUSSIA’S Zarubezhneft is considering the talks with authorities to develop several onshore
purchase of a stake in Uzbekistan’s largest oil gas fields. In 2019, it bought a 50% interest in
company, Jizzakh Petroleum, sources told Kom- Uzbekneftegaz’s Andijanpetrol JV, which is
mersant on November 11. developing the mature South Alamyshik, Khar-
Controlled by Uzbek businessman Bakhti- toum and East Khartoum.
yor Fazylov, Jizzakh is today Uzbekistan’s largest Zarubezhneft invests mainly in countries
oil producer, owning 105 fields that account for with close political ties with Russia. Its largest
about 70% of the 15,000 barrels per day (bpd) presence is in Vietnam, where it owns a number
the country extracts. It also controls 22% of its of offshore gas fields. It struck a deal in May to
860mn barrels of proven oil reserves. buy the Vietnamese assets of Rosneft.
According to Kommersant, Lukoil was also Jizzakh was established in 2017 by Uzbekneft-
in talks to acquire Jizzakh but negotiations “did egaz and Russian partners Gazprom and Gaz-
not work out.” prombank, initially to oversee construction of a
Fazylov is an influential figure in the Uzbek third oil refinery in Uzbekistan. But that project
oil industry. He is also the shareholder of ERI- fell through after being unable to obtain ade-
ELL, the country’s largest oilfield services com- quate oil supply from the country’s neighbours.
pany, which also works in Russia, Bangladesh The Uzbek government approved a pro-
and Iraq. gramme to expand oil production in 2019,
As of press time, none of the involved com- under which it transferred rights to 105 oilfields
panies have commented on a potential deal. But to Jizzakh. The company pledged to invest some
Zarubezhneft told Kommersant it was working $2.7bn in the projects, in order to increase their
on expanding its presence in the former Soviet oil reserves by 6.4mn tonnes (47mn barrels) and
Union, including in Kazakhstan, where it is in their gas reserves by 46bn cubic metres. ™

Russian finds fall to five-year low

RUSSIA THE number of oil and gas discoveries in Russia This said, exploration has still taken a signifi-
has dropped to a five-year low this year, accord- cant hit, as drilling activity has slumped.
Russia discovered only ing to GlobalData, as companies have reined “Over the past decade, Russia has not only
six very small fields in in spending in response to the coronavirus-in- grown its oil and gas production to post-Soviet
the first half of this year. duced oil price crash in 2020. records, it also successfully explored for new
Russia discovered only six very small fields in oil and gas,” Belova continued. “News-mak-
the first half of 2021, adding only 36mn barrels ing discoveries were made over the decade
of oil reserves, equivalent to less than four days in offshore waters and new frontier basins,
of the country’s daily oil output. supplemented by large numbers of smaller
“To retain its place as one of the top oil and discoveries in more mature areas. However,
gas producing nations, Russia needs to ensure a COVID-19 has caused a steep drop in new
steady pace of discoveries to replace produced exploration and discoveries, when most
reserves,” Anna Belova, an oil and gas analyst at Russian operators significantly cut capital
GlobalData, commented. “Otherwise, the effects expenditures into exploration.”
of [coronavirus] COVID-19 and reduced invest- The discoveries that were made in 2020
ments will be felt by the Russian oil and gas sec- included a pair of large gas finds that Rosneft
tor well after the pandemic subsides.” made in the Kara Sea in the Russian Arctic.
Despite the poor exploration result, Russia Beyond OPEC+ cuts and the coronavirus
has fared generally better than other oil and gas pandemic, exploration activity was also affected
exporters during the market downturn. by changes in oil taxation that were passed into
“The country’s operators benefited from law by the finance ministry in late 2020. The min-
a quickly negotiated agreement with OPEC+ istry stripped a number of remote and challeng-
members to reduce oil production, which led to ing oilfields of tax breaks, limiting the funds that
price stabilisation; sustained oil price growth as oil companies had available to invest in explora-
economies recovered; and the country’s strong tion. Some projects managed to secure some but
rebound in global gas demand, which led to not all of the support back through their transfer
record-high gas prices,” Belova said. to a new profit-based oil tax regime. ™

P12 www. NEWSBASE .com Week 46 17•November•2021