“Oil and Gas of Uzbekistan” - OGU 2007
The 11th International Exhibition “Oil and Gas of Uzbekistan” took place in Tashkent in May 2007. 142 companies from 18 countries of the world participated in the event. Among them one could find Russia, Austria, Germany, Netherlands, France, Poland, Czech Republic, Turkey, Iran, China, USA, Malaysia, Indonesia, Azerbaijan, Ukraine and Kazakhstan. The Exhibition consisted of the sections as follows: geology and geophysics, seismic equipment and services, oil production and gas extraction, seabed mining, oil  wells and gassers, transportation and storage of oil.  

International experts point out that our country has carried out tremendous work to improve its oil and gas complex. Uzbekistan is one of the major producers of fuel-energy resources in the Central Asia region; it occupies one of the key positions among the world biggest suppliers of the natural gas and is ranked as the third one among the CIS “blue fuel” extracting countries. Currently Uzbekneftegaz National Holding Company produces more than 64 bln cubic meters of the natural gas and about 8,6 mln tons of liquid hydrocarbons  per year. Production of hydrocarbon raw materials, compared to the year 1991, has increased at one and a half time.

The oil and gas sector is one of the basic branches in the Uzbekistan economy; this fact conditions a keen interest of those foreign companies which participate in the “Oil and Gas of Uzbekistan” (OGU) Exhibition every year. An opportunity to cooperate with the oil and gas sector of Uzbekistan attracts new companies, and the number of participants is steadily growing. The policy of liberalization of economy in Uzbekistan, being conducted under the leadership of the President, creation of favorable investment environment that contributes to development of all the economy branches, including the oil and gas industry, allows to build, reconstruct and modernize the oil and gas sector facilities; such reconstruction and modernization is being implemented by means of foreign investment and own funds.  The country successfully cooperates with such world-known companies as Lukoil OJSC, Gazprom, StroyTransGaz, SoyuzNefteGaz (Russia), Zeromax (Switzerland), CNPC, CPTDC, CINOPEC (China), NPC (Iran), Petronas Carigali Overseas (Malaysia), KNOC (Republic of Korea), Baker Hughes (USA), Bumar (Poland).

This year the OGU-2007 Exhibition has provided experts with a unique opportunity to get familiarized with the most recent achievements of the national and foreign companies in the field of oil production and gas extraction, transportation and processing of hydrocarbons, and, without doubt, it has facilitated to implementation of many promising projects. Most of the Exhibition stands were devoted to the newest technologies aimed at intensification of production and fine processing of oil and gas. Leading oil and gas companies showed their progress in the oil and gas transportation, oil and gas deposits survey and development, as well as their achievements relating to development of geodynamics and hydrocarbon potential of the Central Asia region.

A two-day international conference “Oil and Gas Industry of Uzbekistan: Trends of Development and Prospects of Cooperation” was held within the framework of the Exhibition. Participants considered such conference as a very significant step to expansion of cooperation among experts of the countries involved in oil and gas business and allied industries.

Lukoil to build unique gas processing plant in Uzbekistan
Uzreport.com 22.01.2007
Head of Lukoil Overseas in Uzbekistan Andrei Podbolotov commented on Lukoil's gas project in Uzbekistan to corporate newspaper of Russian company "Neftyanie Vedomosti".
Podbolotov said Lukoil and Uzbekistan signed product-sharing agreement on Kandym-Khauzak-Shadi-Kungrad. He said Lukoil Uzbekistan Operating is implementing project. The PSA acts for 35 years till 2039.

Currently, the work on drilling of wells is underway in Khauzak deposit, the company is recruiting personal and equipment on preliminary processing of gas, gas collection point, new village and electricity network are constructed, he said.

He said that in future the company plans to construct new road and railway and create developed infrastructure. He added that the company will receive first gas in next year.

Podbolotov said other works on PSA are also carried out. In line with project, the company will invest US$150 million in 2006 or twice much compared to previous year and reaches US$300 million. He said the cost of the project was US$1 billion during the PSA signing, but there are all grounds to say that the investments will reach US$2 billion. This is largest investment project in Uzbekistan.

SoyuzNefteGaz and Uzbekneftegaz sign product sharing agreement
Uzreport.com 06.02.2007
SoyuzNefteGaz Vostok Limited (100% subsidiary of Russian SoyuzNefteGaz) and Uzbekneftegaz National Holding (NHC) Company have signed a product sharing agreement on the exploration and development of oil and gas fields of the Central Ust-Yurt and South-western Gissar (Uzbekistan), Interfax quoted a source in the Uzbekneftegaz.

The source said the project was approved through the special resolution of the President of Uzbekistan. The document states that the Russian company undertakes to invest in the project the total of US$466.22 million, including US$369.6 million in the first three years, including the minimum programme of geo-exploratory works budgeted at US$21.8 million.

In accordance with the agreement, SoyuzNefteGaz Vostok Limited will receive a license for exploration on the territory of South-western Gissar and Ustyurt region for the period of five years and extraction of hydrocarbons - for 36 years.

As reported earlier, in February 2005 Uzbekneftegaz passed the decision to break the agreement with British UzPEC and revoke the license for the exploration in the aforementioned areas due to the failure of the British party to perform its investment obligations.
UzPEC refused to return the license, arguing that the Uzbek party's claims were unfounded. The holding then proposed to implement the project in the framework of a JV on the basis of the existing licensed fields, however SoyuzNefteGaz considered the project only on the conditions of the product sharing agreement.

Uzbekneftegaz NHC is a monopoly operator of oil and gas complex of Uzbekistan.

Oil production started at two oilfields 
SNG Gissar Operating LLC, incorporated in SoyuzNefteGaz (Russia), started to produce oil at two oilfields in May 2007; the company is getting prepared for the complex development of two gas-condensate fields in the territory of the South-West Gissar. Estimated investment, required to implement the project, makes more than USD 460 mln. The Company has obtained a 5-year license to conduct exploration work and a 25-year license to produce the hydrocarbon resources. Altogether, duration of the project will cover 36 years. Exploration envisages prospecting works at the Karaumbet and Shumanay investment blocks (Ustyurt region) and pre-exploration work in the territory of the South-West Gissar. The minimum volume of the exploration investment comes to almost USD 22 mln.

Investment
Intensified attraction of foreign investments, first of all direct ones, to the country economy is one of the most important priorities of the current year and for the future. As stated in the report “On Results of Social and Economic Development of the Republic of Uzbekistan in the 1Q of 2007” (Ministry of Economics and State Committee on Statistics), the growth rate of expended investment was 8 times more as compared to the 1Q of 2006, and the major growth of expended investment volume was provided by direct foreign investments.  The total volume of expended investment and credits made up USD 131,1 mln and grew at 1,8 time in comparison with the related period of 2006.
61 per cent of the total capital investment was directed to the production sphere, including 17,4 per cent for construction of new facilities and  35,2 per cent for  modernization and reconstruction of production facilities available. 43 industrial establishments have been commissioned. Implementation of several big industrial and social and cultural projects has begun. Agency on Information Support and Assistance to Foreign Investors (UzInfoInvest), established at the Ministry for Foreign Economic Relations, Investment and Trade early in 2007, was aimed at attraction of foreign investors to the economy of the Republic. 

The newly established Agency was presented to the public at the International Business Centre on May 14, 2007. During the presentation, Mr E.M.Ganiev, Minister for Foreign Economic Relations, Investment and Trade, described Uzbekistan as a country of great investment opportunities. Mr B.Irmatov, Director of the Agency, told about goals, objectives and trends of the UzInfoInvest activities. In particular, he pointed out that UzInfoInvest would not only provide potential investors with required information but the Agency would render every possible assistance in arrangement of meetings, negotiations with the related ministries, agencies and  local businessmen and would give any other necessary support. By now, a number of presentations on the investment environment and investment opportunities in different industries and regions of Uzbekistan have been held in the Republic of Korea, France, Indonesia and Egypt. Similar events took place at the Tashkent business forums where representatives of the business circles from Bulgaria, India, Lithuania, Ukraine and Republic of Korea took part. Several colorful publications, such as “Investment Environment of Uzbekistan”, “Investment Opportunities in Uzbekistan”, have been printed. The UzInfoInvest official website is available; it is accessible in the online regime, both in English and Russian, and more than 1200 visitors from 47 countries have been registered there within the month. Now the Agency is working on 60 investment proposals that embrace oil and gas, chemical and machine building, textile and silk making and food industries, as well as the spheres of production of construction materials, fruit and vegetable processing, agriculture, information technologies and other branches; the total investment proposals volume makes three billion of US Dollars.

“Exemplary Energy System of Uzbekistan”
This is the title of the article written by Amar Al-Sanjari, head of Al-Bayan, Arabic-speaking newspaper rep office; which was published in the mass media of United Arab Emirates.

Amar Al-Sanjari informs his readers that more than 100 types of minerals have been discovered in Uzbekistan; most of them are widely used in the national industry. According to the confirmed natural resources supplies (gold, uranium, natural gas, copper, salt, phosphate, etc.), Uzbekistan occupies one of the leading places in the world”. Speaking about modern oil and gas industry, the journalist points out that being and important source of power in the Republic, it is one of the leading industries in the national economy. He also stresses that 194 hydrocarbon fields have already been found in the territory of Uzbekistan, where 98 of them are the natural gas and gas condensate deposits and the other 96 are oilfields and compressed gas deposits. As of today, the money equivalent of oil resources explored in the Republic exceeds one trillion of US Dollars

Uzbekneftegaz National Holding Company is considered as one of the biggest industrial groups in the Central Asia region; the Holding Company has numerous affiliations, central oil and gas company and occupies the eighth place in the world in terms of the natural gas extraction volume and the fifth place among the CIS countries involved in production of combustive-lubricating materials and power. 

It is the Al- Bayan correspondent's opinion that “the government of Uzbekistan successfully follows a policy of creation of favorable investment environment in order to attract foreign investors and develops partnership and cooperation under priority investment projects. Legislative instruments contributing to attraction of foreign investment have been adopted by the Republic”.

Al-Sanjari considers that “the energy system of Uzbekistan is an exemplary one in the Central Asia region. Electric energy, being produced by 42 electric power stations of the Republic, exceeds 12,3 mln kWt and makes almost 50 per cent of the total energy output in the Central Asia”. 

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 (Material from published articles compiled by Uzbek A. Rustamov, General Representative, Interconcepts Inc. Translation to English: Lyubov Belokon)