Uzbekistan, Tashkent, Sept. 17 / Trend, D.Azizov /
National Holding Uzbekneftegaz and Petronas Carigali Overseas of Malyasia signed a protocol on entry into force of the product-sharing agreement on the Baisun investment block in Surkhandarya region, Uzbekneftegaz said.
It was reported earlier that the PSA on the Baisun investment block was signed in late June 2010.
The Malaysian company has established and registered Petronas Carigali (Baisun) Operating Company Ltd. in Uzbekistan to implement the draft on the PSA.
At present the company has begun preparations for the drilling of an appraisal well in the Gadjak field. As a result of the drilling and specifying hydrocarbons, Petronas will develop a preliminary feasibility study for the project.
The commercial terms of the agreement, including the tax regime, will be agreed with the sides after the approval of the preliminary feasibility study for the project. It was previously reported that in accordance with a decree by the Uzbek President Islam Karimov, Petronas has the right within six months from the date of entry into force of the PSA to attract one or more co-investors to implement this project and sign an agreement with them on a consortium basis.
So far, Petronas has invested about $80 million in exploration work at the Baisun investment block. The works included 2D and 3D field seismic works, test-well drilling and the interpretation of the results obtained.
As a result of these tests the State Commission on reserves of natural resources of the Cabinet of Ministers of Uzbekistan approved the amount of industrial reserves of the field. The amount of reserves was not reported.
Previously it was reported that the PSA on the Baisun block will be signed for 35 years. The design capacity of gas production within the project will be 2.5 billion cubic meters. Investment in the project estimated at $660 million.
Within the project based on the Gadjak field, it is envisaged that a gas processing plant will be constructed, including construction complex for the processing and drying of gas with a high sulfur content.
This is the second PSA with the Malaysian company for the exploration and development of oil and gas fields in Uzbekistan. In May 2008, Petronas and the government of Uzbekistan signed a PSA to develop fields in the Urga, Kuanish and Akchalak fields of the Ustyurt region group in Uzbekistan.
In May 2008 the government of Uzbekistan and Petronas had signed a PSA to develop gas-condensate deposits in the Urga, Kuanysh and Akchala group, located at the Ustyurt Plateau. The PSA is estimated to be worth $550 million and became effective in October 2009.
As per the terms of the PSA, signed for a period of 15 years, both parties will receive 50 percent of the output at the initial stage. It is expected that under the project annual natural gas production will be equal to 700 million cubic meters.
The consortium also includes Uzbekneftegaz, Russia's Lukoil Overseas Holding Ltd., the Korean National Oil Corporation (KNOC) and China's CNPC.
Uzbekneftegaz national holding company, Petronas International Corporation Ltd. and Sasol Synfuels International (PTY) Limited signed charter and constituent agreement of joint venture Uzbekistan GTL in November 2009. The preliminary cost of the project was put at $2,739 billion.
In line with a preliminary feasibility study, the plant will process 3.5 billion cubic meters of gas and produce 672,000 tonnes of diesel fuel, 278,000 tonnes of aviation kerosene, 361,000 tonnes of naphtha and 63,000 tonnes of liquefied gas. The project will start in 2014.
National Holding Uzbekneftegaz, the monopoly operator of the oil and gas industry of Uzbekistan, was established in 1998 and comprises six joint stock companies. Uzbekistan ranks second among CIS countries and among the ten largest natural gas producing countries in the world.