Energy Minister Zhurabek Mirzamakhmudov, at a meeting with press on February 12, commented on the investigation on YouTube by Radio Liberty’s Uzbek service Ozodlik entitled "Secret agreements that left Uzbeks without gas".
In the video, Ozodlik claims that back in 2017, “[Russian President Vladimir] Putin’s oligarchs were handed over full and exclusive control over the Uzbekistan’s oil and gas fields for 35 years.”
The Russian version of the article says that the Cypriot company Altmax Holding "and its partners in Natural Gas-Stream signed an agreement with the government of Uzbekistan, according to which they received the exclusive right to implement any oil and gas projects in Uzbekistan for 35 years."
The basis for such a statement was an extract from the financial statements of Altmax Holding (created by Bakhtiyor Fazylov in Cyprus in 2015, in 2017 a 50% share was bought by Andrey Filatov’s company), which is part of a consortium of investors together with Gas Project Development Central Asia AG (at that time a structure of Gazprom) and UzNefteGazQazibChiqarish (owned by Uzbekneftegaz).
The extract says that on April 5, 2017, the consortium signed a production sharing agreement (PSA) with Uzbekistan for the Mustakillikning 25 yilligi (M25) field in the Surkhandarya province for 35 years with the construction of a gas chemical complex. However, the extract in English states that Gas Project Development Central Asia AG and Uzneftegazdobycha (investors) have signed a PSA with Uzbekistan to “grant investors exclusive rights to all oil and gas operations in Uzbekistan.”
Zhurabek Mirzamakhmudov, in a conversation with journalists, denied the hand-over of all oil and gas fields to Russian companies.
"It is not true. This is completely unfounded, false and misinterpreted information. Most operational fields belong to Uzbekneftegaz JSC. As for the 35 years, this information concerns only the development and use of the Mustakillikning 25 Yilligi field,” he stressed.
According to him, there are 294 oil and gas fields in Uzbekistan, M25 is only one of them, although it is one of the largest.
“According to the terms of the signed agreement, all expenses for the development of the field shall be borne not under the state’s guarantee or at the expense of the budget, but entirely at the expense of investors. The profit is divided equally: 50% - to the investor, 50% - to the state," the minister said.
Production sharing agreements have been signed with partners - foreign investors for only one field, he said.
He showed the reporters the agreement: “I brought this agreement with me on purpose. If you look, each page has been worked out with the involvement of a working group, investors, international legal consultants. This document did not emerge overnight, this is an agreement that was worked on systematically, on the basis of legislation, obligations are defined in accordance with international standards.”
The agreement stipulates that the investor has been granted the exclusive right to conduct and manage all oil and gas operations within and in relation to the contract area during the term of the document - 35 years. The territory covered by the agreement is one field and the area around it.
The agreement is of long term because only exploration work at the M25 field (formerly known as Gajak) will take at least eight years, the minister said. Surhan Gas Chemical Operating Company was established to manage the project.
On behalf of Uzbekistan, the agreement was signed by former Deputy Prime Minister Gulomjon Ibragimov.
The investor has not started gas production yet. Currently, infrastructure is being created and a gas processing plant with a capacity of 5 billion cubic meters of gas per year is being built.
Zhurabek Mirzamakhmudov also listed other PSAs concluded by Uzbekistan. In 2004, a production sharing agreement was signed with the Russian "Lukoil" for the projects "Kandym-Khauzak-Shady" (for a period of 35 years, in 2014 extended for another 7 years - until 2046) and "South-West Gissar" (entered into force in 2007 and has a duration of 36 years).
In addition, a PSA was signed with Gazprom for Shakhpakhty field (since 2004 for 15 years, extended for 5 years in 2018) and Dzhel (signed in 2018 for 25 years).
The Minister of Energy noted that two PSAs were entererd into with the Malaysian Petronas for the Baysun investment block (current M25) and Ustyurt, but in 2014 the company withdrew from the agreements.
In addition to the PSA, contracts may be entered into within the framework of joint ventures or the project may be completely transferred to the investor.
Of the 294 oil and gas fields in Uzbekistan, 118 belong to Uzbekneftegaz, and 176 are operated by foreign companies. Among foreign companies:
- Uz-Kor Gas Chemical – 1 field (Surgil field, one of the largest). Created by a consortium of Korean companies, which includes the Korean Gas Corporation (KOGAS), Lotte Chemical Corporation and GSE&R (50%), as well as Uzbekneftegaz (50%);
- Gazprom - 2;
- Natural Gas Stream – 10 fields;
- Saneg (Sanoat Energetika Guruhi, formerly Jizzakh Petroleum) - 105, most of them oil fields;
- Lukoil - 13;
- Uzmaloil (Uzbek-Malaysian joint venture) - 1;
- CNPC (China) - 13;
- Epsilon - 18;
- Gissarneftgaz (together with Gas Project Development Central Asia) - 8;
- Surhan Gas Chemical - 1;
- Andijanpetro (together with the Russian Zarubezhneft) - 3;
- Petromaruz (Russia) - 1.
Zhurabek Mirzamakhmudov did not disclose the reserves of the fields where the listed companies operate. In particular, the largest proven reserves were managed by Uzbeknetfegaz - 934.1 billion cubic meters of gas (50% of current reserves). Lukoil worked at fields with gas reserves of 413.1 billion cubic meters (22.1%), Uz-Kor Gas Chemical — 109.6 billion cubic meters (5.9%), Surhan Gas Chemical — 106.6 billion cubic meters (5 .8%), Jizzakh Petroleum (now Saneg) - 84.9 billion cubic meters (4.5%).
Journalists at a meeting with the minister said that the Uzbek authorities should disclose the content of documents related to the country's natural resources.
