Uzbekneftegaz, Lukoil and CNPC to jointly develop fields in Uzbekistan

Business Materials 29 March 2013 20:32 (UTC +04:00)

Uzbekistan, Tashkent, March 29 / Trend D. Azizov /

Uzbekneftegaz National Holding Company, Russian oil company Lukoil and the China National Petroleum Corporation (CNPC) will jointly develop gas condensate fields in Uzbekistan, a source in the Uzbek company told Trend on Friday.

According to the source, the government instructed the relevant ministries and agencies to prepare a draft agreement between Uzbekneftegaz, Lukoil and CNPC and equip Khojasayat section of the Dengizkul deposit, Khojadavlat and East Alat fields of the Karakul investment block, located in Bukhara -Khiva region.

He said that the agreement can be signed in the second quarter of this year.

The government also instructed to work out a preliminary feasibility study within a two-month period to equip, prepare and transport gas from Khojasayat section of Dengizkul deposit, Khojadavlat and East Alat fields.

Currently, Lukoil is implementing three projects in Uzbekistan under the production sharing agreement (PSA) - Kandym-Khauzak-Shady-Kungrad, involved in the development of deposits of Southwest Gissar. It explores the Uzbek part of the Aral Sea within an international consortium.

At present, the cumulative gas production of the Russian company in the country hit more than 15 billion cubic meters, the volume of investments - more than 2 billion. Lukoil plans to increase production up to 18 billion cubic meters of gas, the volume of investments - up to $5 billion by 2017 within the first two projects under the PSA terms.

In June 2006, China National Oil and Gas Exploration and Development Corporation (CNODC), CNPC's subsidiary, and Uzbekneftegaz signed an agreement for exploration operations at five investment blocks within Ustyurt, Bukhara-Khiva and Fergana oil and gas regions of Uzbekistan for five years.

The exploration program worth $260.2 million was fully implemented in 2011. As a result, a number of fields were discovered at the Karakul block and two perspective structures were prepared for drilling.

CNODC and Uzbekneftegaz signed an agreement on the principles of establishing a joint venture for the development of gas condensate fields of the Karakul investment block in June 2012. The joint venture is expected to extract up to 1.5 billion cubic meters of gas a year. The estimated cost of the project is $ 650 million.

Uzbekneftegaz is a monopoly operator of the Uzbek oil and gas sector. Its capacity allows extracting natural gas to the amount of about 70 billion cubic meters and liquid hydrocarbons to the amount of eight million tons annually.