Page 10 - FSUOGM Week 28 2019

FSUOGM POLICY FSUOGM
Uzbekistan seeks new PSA law
UZBEKISTAN
Uzbekistan wants more gas to ow to the domestic market rather than being exported.
UZBEKISTAN plans to overhaul legislation covering production-sharing agreements (PSAs) with foreign investors this year, potentially requiring projects to supply some of their gas to the domestic market.
e former Soviet state introduced its law on PSAs in 2001, as part of e orts to help Tash- kent to spur international investment in explo- ration and production. It has remained largely unchanged since then.
“ is law was adopted more than 15 years ago and naturally not all the issues re ected in it today satisfy our requirements for produc- tion-sharing agreements,” Bahodirjon Sidikov, chairman of national oil company Uzbekne - egaz (UNG), told local media on July 13. “ ere were points at which Uzbekistan, in order to attract foreign investors, o ered them certain conditions. Today our ability to attract invest- ments has increased signi cantly and naturally we believe that the law needs to be revised.”
According to Sidikov, international experts will be hired to help dra a new law by the start of December. He added that discussions will take place to put in place a requirement that PSA holders provide some of their gas to the local market.
Uzbekistan produced 56.6bn cubic metres of gas last year while consuming only 42.6bcm. But
despite this surplus, the country has reported domestic shortages, as much of the gas produced at major projects is ringfenced for export.
To alleviate these shortages, the government convinced Russia’s Lukoil last year to begin selling some of the gas it extracts at the Kand- ym-Khauzak-Shady and Southwest Gissar gas developments to UNG. The Uzbek company agreed to pay $146 per 1,000 cubic metres for the supplies, which is considerably more than what it charges domestic consumers. As a result, UNG has clocked up a $600mn debt to Lukoil.
As it strives to improve gas supply security, Tashkent has also set out plans to unbundle its national gas pipeline operator in order to improve its performance. President Shavkat Mirziyoyev issued a decree on July 10 requir- ing UNG’s gas transport arm Uztransgaz to be spun o and a 49% stake in the company sold to private investors by 2024. Under the order, gas distribution networks will also be transferred to independent operators.
Tashkent intends to unbundle UNG’s other activities as well, although it is yet to decide on a precise plan for doing so. UNG’s restruc- turing will pave the way for the company’s rst Eurobond sale, scheduled for next year, and potentially an initial public o ering (IPO) of its stock.™
PROJECTS & COMPANIES
Uzbekistan reports trio of gas finds
UZBEKISTAN
Tashkent has ambitious output goals.
UZBEKISTAN has chalked up three more gas discoveries as Tashkent continues its search for new resources.
National oil company Uzbekne egaz (UNG) has identified a new gas deposit known as Chakar in the eastern Andijan province. e nd was made a er UNG drilled a 1,710-metre well that test- owed gas at a rate of 300,000 cubic metres per day. e company said on July 12 it planned to conduct additional studies and sink two more wells at the site.
On the same day UNG also revealed the dis- covery of the Aralyk eld in the western Kar- akalpakstan region. Here it drilled a 3,910-metre borehole that produced 700,000-800,000 cubic metres per day of gas.
“In the near future, work will be carried out on testing potential productive horizons at the well, and gas condensate studies were conducted
to clarify the layers’ parameters,” UNG said. Two more wells are planned at this eld as well.
Earlier this month Uzbek state media reported an additional discovery by UNG at the Kushkair block in the north-western Ustyurt plateau. A well measuring 3,500 metres in depth achieved a daily ow rate of 200,000 cubic metres, reports claimed.
Since taking power in 2016, Uzbek Presi- dent Shavkat Mirziyoyev has sought to increase investment in the oil and gas industry, which saw stagnation under the decades-long rule of his predecessor, Islam Karimov. Tashkent intends to ramp up national output to 70bn cubic metres per year by 2025, up from 60bcm last year.
Under Mirziyoyev’s new direction, Uzbeki- stan is also undertaking sweeping reforms in the energy sector, aimed at improving performance and clamping down on corruption.™
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w w w . N E W S B A S E . c o m Week 28 17•July•2019