UZBEKISTAN - The Energy Base Of Uzbekistan.
The energy base of Uzbekistan has seen slow expansion from 45 million tons of oil equivalent (oe) per annum in 1985 to a government estimate of about 56m t/yoe for 2008, up from almost 55m t/yoe in 2006. But it peaked at 56.7m t/yoe in 2002. The main component of the energy mix is natural gas, accounting for over 90% of Uzbekistan's energy use.
Uzbekistan has considerable energy resources, particularly fossil fuels, which have enabled the state implicitly to subsidise other sectors of the economy. The state has kept low prices for refined oil products, natural gas, and electricity to support living standards. It has expanded the access of the population to natural gas, with the goal being 100% coverage. Over 4m households, almost 95% of the population, get natural gas.
Uzbekistan's oil consumption has fallen from 265,000 b/d in 1989 to about 120,000 b/d early in this decade. It has risen to 156,000 b/d in 2007 and it is expected to average 160,000 b/d in 2008. Uzbek oil consumption peaked at 275,000 b/d in 1988. Consumption of natural gas has risen from about 33.2 BCM/y (29.9m b/doe) in 1987 to 50 BCM/y (45m t/yoe) through 2005-07 and to an estimate of 60.8 BCM/y (45.3m t/yoe) for 2008. In this decade, gas consumption peaked at 52.4 BCM/y (47.2m t/yoe) in 2002.
Uzbekistan is the third largest natural gas producer in the CIS - next to Russia and Turkmenistan - and one of the world's top ten gas-producing countries. Since becoming independent, Uzbekistan has raised its gas production from 42 BCM/y in 1993. Most gas production is concentrated in 12 deposits, particularly in fields such as Shurtan and Kokdumalak (see gmt16UzbProdOct13-08).
Uzbekistan's energy sector - from oil and gas fields to retail petrol pumps and the electricity system - is fully owned by the state. The policy-making responsibilities are with the Fuel Energy Complex (FEC) headed by a deputy PM. Regulatory roles are split between several institutions - the Pricing Department of the Ministry of Finance regulates the economy, i.e. price setting of all energy forms, while technical regulation is done by UzGosEnergoNadzor (UGEN) for the electricity sector, and UzNefteGazInspectsia (UNGI) for the hydrocarbon sector.
Energy price setting responsibilities in the Ministry of Finance are further split between two units, one dealing with all energy prices to industry as well as with electricity prices to households, and the other with prices of coal and refined oil products applicable to retail consumers. In addition, the State Committee for Nature Protection is responsible for regulating the environmental aspects.
Operational responsibilities are those of state-owned UzbekNefteGaz (UNG) for the hydrocarbon sector, UzbekEnergo (UE) for electric power, and UzbekUgol for Coal. UzbekUgol is an autonomous entity within UzbekEnergo.
Despite the existence of various entities, the energy sector is strategically vital. The President of the Republic, Islam Karimov, and the Council of Ministers are the decision makers for energy policy, including decisions for those relating to industry structure, form and content of sector regulation, pricing, corporate structures of operational entities, privatisation and private sector participation.
Implementation of these decisions is delegated to the FEC and the individual agencies such as UNG, UE, etc. Decisions regarding privatisation and private sector participation are implemented by the State Property Committee (GKI), headed by another deputy PM.
In addition, many decisions of an operational or commercial nature affecting industry players are administratively regulated and/or subject to approval by the Ministry of Finance, the Anti-Monopoly Committee or the Council of Ministers. For instance, Special Regulation No. 021 approved by the Ministry of Finance regulates the distribution of cash received by subsidiaries of UNG. The cabinet's Decree on Natural Gas Delivery provides a list of consumers who have the right to suspend payments for gas for up to 120 days.
UZBEKISTAN'S ENERGY CONSUMPTION 1985-2005 (In Million T/Y Of Oil Equivalent) 1985 1995 2000 2002 2003 2004 2005 2008 Oil 11.4 6.7 6.8 6.8 6.5 6.3 6.0 7.9 Gas 29.6 38.1 42.4 47.2 42.5 46.2 45.0 45.3 Coal 3.5 1.4 1.2 1.4 1.4 1.4 1.4 1.4 Hydropower 0.5 1.4 1.2 1.3 1.3 1.3 1.4 1.4 Total 45.0 47.6 51.6 56.7 51.7 55.2 53.8 56.00