Expanding horizons for cooperation with Korea

Modern oil and gas industry of Uzbekistan is one of the largest industries of economy, the most important energy base of the country. The industry has significant science and technology potential, achieved certain success in its development.
For the years of Independence, Uzbekistan has experienced stabilization and then dynamic development of oil and gas industry. In 1995, Uzbekistan achieved self-sufficiency in oil and stopped importing oil. Achieving energy self-sufficiency was carried out despite deep economic crisis in the FSU republics, breakup of economic and trade links, increase of prices and intensification of inflation.

Sub-soils of Uzbekistan contain huge reserves of hydrocarbon resources. About 60% of the territory of the country is prospective for oil and gas. In five oil-and-gas-bearing regions of Uzbekistan, 211 deposits of hydrocarbon resources have been discovered: 108 ? gas and gas-condensate, 103 oil-and-gas, oil- and-gas-condensate and oil. More than 50% of deposits are under exploitation, 35% prepared for development, others are continuing prospecting works.
The annual production of hydrocarbon resources in Uzbekistan is about 86 million tons of conventional fuel. Export potential of all produced gas today constitutes US$ 1.4 billion.
Current investment trends in the oil and gas industry of Uzbekistan are characterized by large-scale projects in the field of reconstruction and re-equipment of facilities as well as the new construction.
In accordance with the Investment Program of the Republic of Uzbekistan for 2015 year 31 projects of NHC "Uzbekneftegaz" were included with a total value of US$ 23 billion 857 million and with the forecast of investment of US$3 billion 249million 280 thousand:
- Foreign direct investment ? US$ 2.2 billion;
- Internal funds ? US$ 529 million;
- Fund for Reconstruction and Development funds ? US$ 342 million;
- Commercial bank loans - more than US$ 81 million;
In 2015, 7 projects of NHC "Uzbekneftegaz" were completed and industrial capacities commissioned.
In order to increase the investment attractiveness of the oil and gas industry in NHC “Uzbekneftegaz" company five main priorities have been identified that aimed at the following:
- establishment of a reliable long-term source of raw materials for upgraded facilities production systems, oil and gas processes, transportation of natural gas;
- upgrading of the technological infrastructure of mining and processing of hydrocarbons with an increase in the export potential of the industry in the supply of natural gas and liquefied gas production, stabilization and further increase in production of liquid hydrocarbons;
- reconstruction and modernization of gas transportation system in order to ensure reliable natural gas supply to the domestic consumers and annual even exports of the increasing gas volumes;
- preparing and implementing development projects with the production of gas chemistry diversified products for the further development of related industries and exports of gas chemistry products;
- localization of production at the competent enterprises, creation of new enterprises, that reach targets on import substitution, as well as cooperation with other sectors of the economy.
The implementation of projects in these areas is based on existing potential of the Ustyurt region for the opening of hydrocarbons, presence of sufficiently high reserves in the Bukhara-Khiva and Surkhandarya regions. In addition, there are prospects for deep oil-bearing areas of the Fergana and Surkhandarya basin.
The involvement of foreign companies in investment activities on exploration work has allowed Uzbek specialists to master advanced techniques and technologies in the seismic conditions of the transition zone, shallow water, mountainous terrain, requiring special tools and equipment. The work with modern 3-component geophones for spatial study of oil and gas deposits was mastered.
Currently the fleet of drilling equipment is being modernized by acquiring new rigs, which has greatly increased the commercial speed of drilling and reduced the cost of drilling for enterprises by reducing the time required for the construction of wells.
One of the promising areas is the preparation and implementation of projects on the development of gas chemistry with the production of diversified products for the further development of related industries and exports.
For the period of 2006-2014 the total amount of direct investments aimed at developing the oil and gas industry of Uzbekistan reached about US$3.1 billion. This includes the project on the "Construction of Ustyurt GCC on the basis of the Surgil Deposits", implemented in collaboration with a consortium of Korean companies such as ?KOGAS?, ?Lotte Chemical? and ?STX Energy? - US$ 2.2 billion.
It is important to note that this project is one of the largest in the Central Asian region, which was also recognized as the deal of the year in the oil and gas and chemical sector in 2012 by the renowned news agency ?Thompson Reuters?.
Special technological zones are currently under construction. The complex will process 4.5 billion cubic meters of natural gas annually. The volume of production will amount to 400.0 thousand ton of polyethylene and 100.0 thousand of polypropylene.
Given the rapid construction pace involving a number of Korean contractors, August 2015 will see the completion of the main production facilities and the launch of production.
Korean partners are involved in projects aimed directly at meeting the growing demand of the country's automotive industry: the production of CNG cylinders for cars, equipment for the automatic compressor station gas fillers and construction of the automatic compressor station gas filler.
Based on current trends and development of innovative technologies, as well as considering the fact that the Uzbek natural gas is saturated with valuable components such as ethane, propane, butane, etc., NHC "Uzbekneftegaz" plans further development of promising projects, especially with Korean partners, aimed at deep reprocessing of natural gas with the production of new high value added polymer products:
- "Methanol to olefins" project for the production of polymeric products;
- organization of production of polyethylene foam;
- production of polycarbonate, polystyrene, ABS plastics;
- production of 1.4 butanediol from natural gas for subsequent use as polymer (rubber, spandex, etc.);
- production of plastic products (compound, etc.) for automotive and other industries;
Other projects:
- building a network of automatic compressor station gas fillers in the regions of the Republic of Uzbekistan;
- storing of natural gas in liquid state with the use of cryogenic technology.
NHC “Uzbekneftegaz” is strongly committed to furthering mutually beneficial cooperation with foreign partners and hopes that Korean companies would continue actively participate in various projects in Uzbekistan that would make its contribution to expanding and deepening investment collaboration between the two countires.