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UZBEKISTAN - E&P Offers.

Uzbekneftegaz has been offering a number E&P blocks to foreign companies for the past six years. On May 22-23, 1997, the government held its first annual oil and gas conference in Tashkent to promote these blocks. Called Uzbekistan International Oil & Gas Conference (OGU'97), the meeting was attended by a number of Western and Asian companies. But the response to Uzbekneftegaz's offers was not encouraging. Since then annual conferences have been held and the response of foreign companies has fallen short of Uzbek expectations, despite the fact that co-sponsors have included major companies like Shell, KPMG, ABN Amro Bank and Aitken Irwin Lewin Roshanian, with President Karimov giving the welcome address.

In mid-2000, the company began preparing to offer 16 blocks covering 78 oil and gas fields and numerous exploration prospects throughout Uzbekistan to foreign investors. Foreign investors were also to be invited to bid for up to 44% equity in several of Uzbekneftegaz' units in 2001.

In addition, eight individual fields were earmarked for foreign participation, and some of them have been on stream already. They require a total of $242m to develop. Operated by Uzbekneftegaz, they are as follows:

South Kemachi, in the Amu Darya Basin, with recoverable reserves officially estimated at 350.8m barrels oe.

South Tandircha, in the South-Est Gissar Basin, with recoverable reserves officially estimated at 314.4m barrels oe.

Gumbulak, a producing field in the South-West Gissar Basin, with recoverable reserves officially estimated at 214.8m barrels oe.

Umid, a producing field in the Amu Darya Basin, with recoverable reserves officially estimated at 116.6m barrels oe.

Dzharkuduk, a producing field in the South-West Gissar Basin, with recoverable reserves officially estimated at 115.6m barrels of oil equivalent.

Shakarbulak, a producing field in the Amu Darya Basin, with recoverable reserves officially estimated at 47.7m barrels oe.

South Kizilbairak, a producing field in the South-West Gissar Basin, with recoverable reserves officially estimated at 27.9m barrels oe.

North Shurtan, a producing field in the Amu Darya Basin, with recoverable reserves officially estimated at 11m barrels oe.

Together, North Shurtan, South Kizilbairak, Gumbulak and Dzharkuduk produce 2.5 BCM/year of gas and 90,000 tons/year of condensate.

Uzbekneftegaz has said $25m were needed at Umid and South Kemachi so that their combined production is raised to 2 BCM/year of gas, 100,000 t/y of oil and 30,000 t/y of condensate.

At the OGU'98 conference held on May 20-21, 1998 at Tashkent and chaired by Kayim Khakkulov, then deputy premier and chairman of Uzbekneftegaz, six blocks were offered. The man who presented them was deputy premier Ismail Jurabekov.

The six blocks are in the western region of Ustyurt at the southern end of the Aral Sea. Government officials have said the fields in this area could rival the Tengiz and Karachaganak oil and gas giants of neighbouring Kazakhstan. The offered PSA for one of the blocks was to allow drilling in the Aral Sea and this is the largest among the six tracts.

According to the official estimates, the Ustyurt region has unexplored reserves of 1.8 bn tons of oil, 1.9 TCM of gas and 120 million tons of gas condensate.

The six blocks have a total area of about 51,500 sq km and are located structurally along strike from Kazakhstan's Zheybai, Uzen and Kalamkas fields in the Buzachi and Mangyshlak regions. Uzbekneftegaz, the state's proposed partner in the offered PSAs, had not completed large-scale prospecting in the area.

Uzbekneftegaz still needs foreign capital and technology to develop the Ustyurt region. This should be done with the help of foreign companies. But the government is yet to offer adequate E&P incentives to attract such companies.

The Aral Sea block contains gas and includes a structural continuation of the Zaunguz-Murgab Graben, along which East Turkmenistan's super-giant Dauletabad gas field is located (see profile of Dauletabad in Gas Market Trends Nos. 11 & 12). Commercial gas flows have been obtained. The block, the largest among the six, has an area of 32,000 sq km and contains the Aral Sea. It occupies the north-east corner of Ustyurt.

The 4,200 sq km Kuanysh block, in the central part of Ustyurt and south-west of the Aral Sea, has been partly explored. It includes the Kuanysh gas field, in the western part of the block where 14 wells have been drilled. Another seven wells have been drilled in the western part.

The Karakuduk block contains oil. Initial drilling has resulted in oil flows from Paleozoic limestones.

Another central block, Akchalak, covers 2,000 sq km. Five wells drilled within the block yielded flows from the main gas reservoirs in the Lower and Middle Jurassic clastics and Paleozoic carbonates at depths of 2,200-3,700 metres. The potential for additional gas discoveries is said to be good.

To the south-west lies the Agyin block, 10,000 sq km. No fields have been discovered there. But seismic studies done indicate that the main prospects are associated with Jurassic clastics throughout the block and with Paleozoic carbonates in the southern part.

Commercial gas discoveries have been made in the Berdakh block. Small gas flows have been obtained in the Adzhibai area from the Middle Jurassic.

In the south-west corner of the Ustyurt plateau and near the border with Kazakhstan lies the Shakhpakhty block, which includes a producing gas field of the same name. The field has about 411 BCF of remaining reserves, according to official estimates. About 14 wells have been drilled around the field. The field's main producing zones are in Jurassic clastics and Paleozoic carbonates at depths of 3,500-3,700 metres.

These blocks have infrastructure. The government has indicated that the foreign companies will have the choice of signing PSAs in partnership with Uzbekneftegaz or taking concessions entirely in their own rights.
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Publication:APS Review Oil Market Trends
Date:Sep 25, 2000
Words:971
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