Uzbekneftegaz has launched a systematic effort to fully secure its rights and interests as a founding shareholder in joint ventures where it holds a stake, while also working to boost production and financial performance, the company's press service, the company said in a statement.
reportedly, a meeting chaired by Uzbekneftegaz's board on August 21 conducted a critical review of operations at three joint ventures: Natural Gas-Stream, New Silk Road Oil and Gas, and Andijanpetro.
Preliminary findings pointed to systemic problems across the ventures involving governance, accountability and financial discipline. Officials noted that workflows at some enterprises were poorly regulated, accounting and financial reporting lacked transparency, and mechanisms for reporting back to Uzbekneftegaz had never been properly established.
These shortcomings, the company said, had contributed to a range of problems: production volumes declining year after year, unresolved questions over how investment funds were being used, weak financial stability, and dividend obligations that were only partially met. Officials singled out the founder's own lack of adequate oversight as a key factor that had allowed these issues to escalate unchecked.
"Every joint venture in which the company holds a stake will now be required to strictly observe corporate governance principles, fully protect the founder's rights and interests, and submit to transparent monitoring of its financial and production performance," the company said in its statement. "The production capacity, exploration activity and effectiveness of geological and technical work at these enterprises will be reassessed. Measures have also been introduced to audit outstanding debts owed to Uzbekneftegaz JSC and to digitize the monitoring of financial flows and procurement."
Going forward, every planned initiative, investment project and operational process at the joint ventures will require sign-off from Uzbekneftegaz. Each proposal will undergo a thorough review of its necessity, economic viability and cost before the company grants approval to proceed.
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