July 6, 2015
OFFICIAL VISIT OF THE PRIME MINISTER OF INDIA TO UZBEKISTAN.. 2
Prime Minister of India to Visit Uzbekistan. 2
Prospects of attracting foreign investments to the oil and gas sector of Uzbekistan. 2
Uzbekistan constructs, reconstructs 116.7 km of roads. 4
EU to Provide Aid to Uzbekistan. 5
OFFICIAL VISIT OF THE PRIME MINISTER OF INDIA TO UZBEKISTAN
Prime Minister of India to Visit Uzbekistan
At the invitation of President of Uzbekistan Islam Karimov on July 6-7, 2015 the Prime Minister of India Narendra Modian to pay an official visit to our country.
During the meetings and talks at the highest level they will discuss state and prospects of Uzbek-Indian relations, topical issues of regional and international character.
Following the visit, its planned to adopt the Joint Statement of the Republic of Uzbekistan and the Republic of India, to sign a number of intergovernmental and interdepartmental documents aimed at further strengthening multifaceted bilateral cooperation.
(Source: Press-service of the President of the Republic of Uzbekistan)
Investments
Prospects of attracting foreign investments to the oil and gas sector of Uzbekistan
The oil-and-gas industry is the biggest and most dynamically developing sector of the national economy. Extraction volumes of hydrocarbons show a healthy upward trend.
The industry is represented by the National Holding Company Uzbekneftegaz, incorporating 6 main joint-stock companies and over 190 enterprises. The latter carry out the following activities: geological exploration, prospecting, exploitation drilling of oil and gas wells, working of oil and gas deposits, extraction of oil, gas and gas condensate, processing of natural gas, transportation and underground storage of gas.
Uzbekneftegaz NHC also runs facilities that transport natural gas to local customers and export it abroad. Besides, the company is involved in transiting natural gas from the neighboring states. Its activities also include the implementation of planning and designing works, major construction works and outfitting of extraction, transportation and processing facilities.
Nowadays, there are more than 240 discovered deposits of oil, gas and gas condensate on the territory of Uzbekistan. The overall length of gas mains laid in the country exceeds 13,000 kilometers, with 250-plus compressor stations located along the whole length.
Over the years of development as a sovereign independent state, the Republic of Uzbekistan has done much to reconstruct and upgrade the existing facilities as well as to build new plants, squeezing compressor stations and underground storage reservoirs for gas.
Today, the structure of the National Holding Company Uzbekneftegaz encompasses 2 oil refineries in Fergana and Bukhara, the Mubarek Oil-Processing Works, the Shurtan Gas-Processing Works, the Shurtan Gas-Chemical Complex and other facilities.
Since independence, some 15 new oil and gas fields have been discovered, including with the help of foreign investors.
At present, there are more than 20 joint ventures in the Uzbekneftegaz system. Among the newly-created enterprises are Asia Trans Gas, Uz-Kor Gas Chemical, Uzbekistan GTL, UzPrista, Uz Dresser-Rand and others.
Several produce sharing agreements are being implemented with the Russian companies Gazprom and Lukoil, as well as with the International Consortium of Investors.
In accordance with agreements on conducting geological exploration works, the National Holding Company is closely cooperating with Gazprom and Lukoil, CNHC International, Korea National Oil Corporation, Korea Gas Corporation and PetroVietnam.
All measures to develop the national oil and gas sector are taken amenably to the Presidential Decree, “On the Program of measures to ensure the structural transformation, modernization and diversification of production facilities in the period 2015-2019”. Pursuant to this document, Uzbekneftegaz is planning to realize 77 investment projects, worth US $32.06 billion, including those to be implemented jointly with overseas companies.
Another portion of projects is carried out by the NHC in keeping with the Presidential Resolution, “On the Investment Program of the Republic of Uzbekistan for 2015”. It includes 34 projects to the tune of US $26.3 billion. Additionally, US $4.9 billion worth of projects are now being scrupulously studied.
At the current stage of the country’s development, the national policy in the oil-and-gas industry prioritizes the following targets: to increase the efficiency, with which oil and gas resources are used; to diversify the sector and to augment the output’s value added. That’s why, in accordance with these Programs, the organization of production of high-tech petrochemical and chemical goods on the basis of hydrocarbons’ deep processing is the main direction in which to develop the national oil-and-gas industry.
In this connection, Uzbekneftegaz, in conjunction with foreign partners, studies a number of important investment projects, whose realization is expected to have a profound effect on the very structure of the market for fuel resources within the country and in the entire Central Asian region alike.
In particular, the construction of the Ustyurt Gas-Chemical Complex on the basis of the Surgil deposit is the largest project in Central Asia’s oil-and-gas sector. A consortium of companies – KOGAZ, Lotte Chemical and STX Energy – is the chief foreign partner of Uzbekneftegaz. Estimated at US $4 billion, the project is realized under an international project funding scheme. According to the approved technical and economic assessment of a given project, its annual rated capacity comes to 3.8 billion c. m. of marketable gas, 387,000 tons of polyethylene and 83,000 tons of polypropylene. The following three companies – KBR, Ortloff and UOP (the US) are licensees under this project.
In 2012, Project Finance International, an international edition, has recognized the project’s planning and financial agreement as the best one in the world’s petrochemical and gas-chemical sector. This project has been awarded the international prize “Best Deal of 2012” of the Trade Finance Magazine and Global Trade Review.
Moreover, one of the world’s most authoritative agencies, Dealogic, together with the American leading edition – Wall Street Journal, has included the Ustyurt Gas-Chemical Complex Construction Project in Top Ten Projects of the World for 2012.
On March 13th, 2014, another authoritative international edition – Infrastructure Journal has awarded the prestigious prize “Global Deal of 2014 in the Oil-and-Gas Sector” to the construction project of this Gas-Chemical Complex.
Another big project implemented by Uzbekneftegaz in conjunction with foreign companies is the construction of a plant to produce a synthetic liquid fuel near the Shurtan Gas-Chemical Complex in Kashkadarya province. Petronas Carigali and Sasol are the project’s main foreign partners. The GTL technological processes, based on the company’s own technology SASOL, will allow the new production facility to process some 3.5 billion c. m. of purified methane a year to be supplied from the Shurtan Gas-Chemical Complex and to turn out 1.5 million tons of highly-liquid output, including diesel fuel, aviation kerosene, nafta and liquefied oil gas.
The main attractiveness of the Republic’s oil and gas industry lies in the abundance of hydrocarbon reserves, which, in turn, allows the country to retain the relatively low prices for essential raw stuff and materials needed for production.
There are several subservient factors that help foreign companies to operate successfully and profitably in Uzbekistan. These include: a well-developed production base needed for the implementation of all kinds of operations associated with oil and gas, such as geological prospecting, extraction, processing, transportation of raw materials, production of machinery and construction of required production facilities, training of highly qualified specialists and availability of appropriate training establishments, as well as the Republic’s convenient geographical location.
Foreign companies developing oil and gas deposits on the territory of Uzbekistan are granted a series of privileges and preferences, such as the exclusive right to carry out reconnaissance works, combined with the possibility to participate in hydrocarbon extraction operations either by setting up a joint venture or on terms of concession. Such companies and their foreign contractors and sub-contractors are granted exemption from all taxes and deductions to the off-budget funds within the entire period of reconnaissance. What’s more, the privileges also cover the customs duties on the imported equipment, material and technical resources and services required to accomplish prospecting and associated works.
Uzbekistan’s nearest plans for the development of its oil-and-gas industry contain the following objectives:
To organize the production of olefins from natural gas, which is needed for the production of polymers (including polyethylene, polypropylene, polystyrene, rubber, spandex etc.) using the MTO (methane-to-olefin) technology;
To build a gas-chemical complex at the Mubarek Gas-Processing Plant;
To organize the production of liquefied natural gas (LNG);
To construct a new hydrocarbon pyrolysis plant;
To set up a facility for complex processing of oil-shale to oil products, using the raw materials from the Sangruntau deposit (Navoi province);
To accomplish additional reconnaissance and outfitting of hydrocarbon deposits in the Uzbek part of the Aral Sea water area;
To carry out geological exploration works in the investment blocks of Sechankul, Akdjar and Chimbay, as well as in the investment oil-and-gas-bearing blocks of Khorezm and Meshekly – Tuzkoy; and to exploit the Urga deposit and deposits of the Akchalak and Chandyr groups;
To carry out geological exploration works and extract hydrocarbons in the Baisun and Surkhan investment blocks of the Republic of Uzbekistan.
It should be stressed that all the projects in the oil-and-gas industry will be realized in keeping with the nation’s strategic interests. Taking into consideration the sector’s high attractiveness for overseas investors, as well as the long-term trends of its development, it is safe to expect a further rise in the inflow of foreign investments to the oil-and-gas and petro-chemical sectors of the Republic of Uzbekistan.
(Source: «Business partner.uz» newspaper)
INFRASTRUCTURE
Uzbekistan constructs, reconstructs 116.7 km of roads
Uzbekistan constructed and reconstructed 116.7 km of automobile roads within the investment programme for 2015 in the first six months, the press service of Uzavtoyul said.
According to the company, about 34.9 km of automobile roads were fully repaired within the investment programme.
One of key tasks of Uzavtoyul is to use and carry our current repair of roads. In the first six months of 2015, the enterprises of Uzavtoyul carried out such works for 670 km of roads of Uzbekistan.
In the reporting period, the road builders reconstructed and fully repaired 11 streets of ancient Urgench with total length of 14.1 km, which created additional convenience for the citizens.
(Source: UzDaily.com)
International cooperation
EU to Provide Aid to Uzbekistan
The European Union is planning to provide Uzbekistan with financial aid before the end of the year, according to Yuri Sterk, Head of the EU Delegation in Uzbekistan. The bulk of the aid will be channeled into the development of Uzbek regions.
Phased implementation of projects under this partnership will start in Uzbekistan in the nearest future. According to Sterk, the first project has been agreed and will be aimed at improving the system of water resource management. Experts are set to provide assistance with the improvement of the legislative framework and introduction of modern technologies and energy-efficient mechanisms.
“Other issues will also receive attention,” he stressed. “Presently, the EU is funding projects on the improvement of education and healthcare, boosting the rule of law, development of parliamentarism, and increasing financial literacy and entrepreneurial capacities,” he added.
A Regional Secretariat of Centers for Advanced Experience in Chemical, Biological, Radiological and Nuclear Material, an initiative important for both parties, is expected to be inaugurated in the middle of July this year.
“The opening of the Center has been agreed, and the necessary legal framework is being developed to this end,” Sterk noted. “An agreement was inked on May 18 this year in Brussels during a session of the EU-Uzbekistan Cooperation Council. We are currently discussing the official launch and we are expecting a visit by an official delegation from Brussels.”
This will be the head office while each Central Asian country will have its own center. They will exchange advanced practices, review laws and regulating provisions, and improve capacities in tackling the spread of chemical, biological, radiological and nuclear material.
In addition, Uzbekistan and the EU are presently negotiating creation of a bilateral Council for Trade and investment, which will involve European companies already operating in or planning to enter Uzbek markets. As Sterk noted, the council will start working before the end of the year and envisions becoming a convenient platform for expansion of investments.
From 2007 to 2014, the EU provided upwards of €70 million in aid to Uzbekistan. The European Union Delegation, which started its activities in Uzbekistan in 2011, works to contribute to the development of political relationships between the two parties and expansion of trading, economic, cultural and educational ties.
(Source: «Uzbekistan Today» newspaper)
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