Malaysian Petronas to allocate $50mln to Uzbekistan

Uzbekistan, Tashkent, Aug. 4 / Trend, D.Azizov /

"Petronas Carigali Overseas Sdn.Bhd." Company will allocate $ 50 million under the production sharing agreement (PSA) on the fields of Urga, Kuanysh and Akchalak group of the Ustyurt region, a source in Uzbekneftegaz said.

The source noted that within implementation of the PSA it's envisaged a phased compensation of Uzbekistan's costs in the amount of this sum towards these fields in the Ustyurt region.

The compensation paid by Petronas, will be equally divided between National Holding Company Uzbekneftegaz and the public budget. Part of funds for NHC, will be paid in foreign currency and used for further development of oil and gas industry by agreement with the Ministry of Economy and Ministry of Finance of Uzbekistan.
In May, 2008 the government of Uzbekistan and Petronas had signed a PSA to develop gas-condensate deposits of "Urga", "Kuanysh" and Akchala group, located at the Ustyurt Plato. The PSA is estimated at 550 mln USD and became effective starting from October, 2009.

As per the terms of the PSA, signed for a period of 15 years, both parties will receive 50% of the output at the initial stage. It is expected that under the project annual natural gas production will be equal to 700 mln cubic meters.

Malaysian company transferred the rights and duties under this agreement to a subsidiary specialized company "Petronas Carigali (Urga) Ltd".

Earlier it was reported that, currently gas inflow at a rate of about 30,000 cubic meters was received on the "Urga" field, while start of gas production is expected on the "Kuanysh" and "Akchalak group soon.

Malaysian Petronas actively operates in oil and gas sector of Uzbekistan.

The Government of Uzbekistan and Petronas Carigali Overseas (Malyasia) signed a product-sharing agreement in relation to Baisun investment block in Surkhandarya region in June of 2010.

The product-sharing agreement was signed for 35 years. The volume of gas production within the agreement will make up 2.2 billion cubic meters, while the project cost is US$660 million.

Malaysian companies invested about US$80 million to exploration programme in Baisun investment block in three years (2006-2008). Petronas has already concluded 2D and 3D field seismic surveys, and testing and analysis at the Gadjak Field amounting to $80 million. Subsequently, the Uzbek State Reserves Commission at the State Geology and Mineral Resources Committee approved the amount of the field's industrial reserves.

In November, 2008 NHC "Uzbekneftegaz" and Petronas had also signed a protocol to start exploration works at Surkhan investment block. The agreement stipulates for exploration works during 5 years and investments of no less than 20 mln dollars.

In addition, Petronas has a 20% stake in an international consortium, also including NHC "Uzbekneftegaz", Lukoil Overseas (Russia), KNOC (South Korea) and CNPC (China). In 2006, the consortium has singed a PSA agreement with the government of Uzbekistan to develop Uzbek part of Aral Sea during 35 years. As per the terms of the agreement, each consortium member will receive 10% of the output, the government of Uzbekistan - 50%.

Uzbekneftegaz, Malaysia's company Petroliam Nasional Bhd (Petronas) and South Africa's Sasol Ltd signed a memorandum on establishment of the joint venture (JV) UZBEKISTAN GTL to realize the project on production and sale of synthetic liquid fuels in Uzbekistan in November 2009.

In accordance with the project's feasibility study, plant to produce synthetic liquid fuels (gas-to-liquid technology, GTL) will process 3.5 billion cubic meters of gas and produce 672,000 tons of diesel oil, 278,000 tons of jet fuel, 361,000 tons of naphtha and 63,000 tons of liquefied natural gas. The plant is planned to be launched in 2014. The plant's feasibility study is expected to be approved by late June 1, 2010.

Uzbekneftegaz established in 1998 is a monopoly operator of oil and gas industry of Uzbekistan and comprises six joint stock companies.

Uzbekistan ranks second among CIS countries and among the ten largest gas-producing countries for natural gas.

The country produces more than 60 billion cubic meters of natural gas, part of which is exported

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