Why is this important
BP is a global giant with experience in the Caspian region. BP’s participation will attract technology, capital, and increase the project’s attractiveness. $2 billion in investments will create jobs and increase oil production.
What happened
- Negotiations with BP on participation in the PSA in Ustyurt;
- Investors: SOCAR, Uzbekneftegaz (50/50 with the state);
- By the end of 2025: seismic exploration of 3000+ km, drilling of the first well;
- The project cost is $2 billion.
Project
- Ustyurt district: Ustyurt Plateau in the west of Uzbekistan (boundary with Kazakhstan, Turkmenistan).
- Oil production: previously gas was extracted, now focus on oil after studying SOCAR materials.
- Potential: 100+ million tons of oil.
Investors
- SOCAR (Azerbaijan): a state-owned oil and gas company with experience in the Caspian region.
- Uzbekneftegaz: National Company.
- Shares: 50% state, 50% investors (SOCAR + Uzbekneftegaz).
BP
- Who: with, transnational oil and gas company (capitalization $100+ billion).
- Experience: Caspian region (Azerbaijan — Shah Deniz gas field, Kazakhstan — Kashagan oil field).
- Negotiations: preliminary, BP has shown interest.
Product Sharing Agreement (PSA)
- Conditions: product division, taxation are specified in the agreement.
- Operator: created, has begun negotiations with contractors.
Deadlines
- By the end of 2025: the start of seismic exploration of 3000+ linear kilometers — studying the structure of the subsoil, searching for oil deposits.
- After seismic exploration: drilling of the first well — confirmation of reserves, assessment of commercial feasibility.
Why
- Increased oil production: Uzbekistan produces about 3 million tons per year, imports about 1 million tons. Ustyurt can add 1-2 million tons per year.
- Reducing imports: saving currency, energy security.
- Investments: $2 billion — job creation, taxes, regional development.
Context
- Ustyurt: previously gas was extracted (Kandym field), now focus on oil after studying SOCAR.
- SOCAR: successfully operates in Azerbaijan (mining on the Caspian shelf), expanding in the region.
- BP: Global leader, experience in complex projects (sea mining, high-tech deposits). Participation will increase the project’s attractiveness for other investors.
- Uzbekistan’s oil production: 3 million tons per year, imported around 1 million tons. Ustyurt can increase production by 30-50%.
