Uzbekistan is actively seeking increased investment from Western energy companies following a recent production sharing agreement (PSA) signed with BP and Azerbaijan's state oil company SOCAR. This move is part of the nation's broader strategy to enhance its natural gas production and meet domestic consumption, which is currently about 55 billion cubic meters (bcm) annually, with an additional 10 bcm required for exports. The country is particularly interested in attracting technology and expertise from Western firms to develop its substantial, yet often challenging, gas reserves.
The recently finalized deal involves BP acquiring a 40% stake in six gas blocks located in the Ustyurt region of Karakalpakstan. SOCAR and Uzbekneftegaz, Uzbekistan's state-owned oil and gas company, each hold a 30% interest. This marks BP's first project in Uzbekistan, signifying a strategic return to hydrocarbon exploration for the British giant after a previous focus on green energy. The initial phase of the project, which includes seismic activities, is being operated by SOCAR. The total investment volume for this project is valued at $2 billion, with potential reserves estimated at up to 100 million tons of oil and 35 bcm of gas.
The Uzbek government sees the partnership with BP and SOCAR as a crucial step in revitalizing its oil and gas sector, which has seen declining production over the past decade and a half. Energy Minister Jurabek Mirzamahmudov emphasized that the entrance of a major Western player like BP demonstrates international confidence in Uzbekistan's energy reforms. The country aims to leverage such partnerships to unlock its resource potential more efficiently, improve its gas transmission systems, and secure long-term energy supplies, positioning itself as a more significant player in the global energy market.
