Uzbekistan plans to expedite the implementation of the Production Sharing Agreement (PSA) for the Ustyurt region, the Energy Minister Jurabek Mirzamakhmudov told Azerbaijani news publication Report.

According to him, the Ustyurt area is now one of the most promising areas in the region, which previously produced primarily gas. The minister noted that after studying all the historical data, Azerbaijan's SOCAR had expressed interest in exploring oil reserves, and a project operator has already been established under the PSA.

"We face an ambitious goal—to expedite the start of work. We plan to begin physical seismic exploration work covering more than 3,000 linear kilometers by the end of this year. Based on the findings, we plan to drill the first well," Mirzamakhmudov said.

He elaborated that the parties' shares shall be distributed in the classic model: "50/50"—the state and investors. The investors are SOCAR and Uzbekneftegaz.

The minister emphasized that all commercial terms—production sharing, taxation, and other parameters - were specified in the agreement.

According to him, the first three years will be seismic exploration, drilling phasez, and obtaining initial findings. "It will take three to five years to achieve first production, including the construction of the necessary infrastructure," he added.

Mirzamakhmudov noted that drilling had not previously been conducted directly at these sites, but work had been conducted in neighboring territories. "Technologies have advanced significantly: while major discoveries were not expected in the Ustyurt region in the 1970s, modern interpretation methods have demonstrated high potential. This is confirmed by the results of research by other analytical companies," he said.

He added that SOCAR specialists were predicting "good oil indicators." "If these forecasts are confirmed, we will simultaneously begin work on the construction of an oil refinery," he emphasized.

Furthermore, Mirzamakhmudov stated that small-scale chemical projects are already being developed: "We are open to cooperation with SOCAR and other partners."

The Ministry of Energy of Uzbekistan, the State Oil Company of Azerbaijan (SOCAR), and Uzbekneftegaz signed a production sharing agreement (PSA) on July 24. The deal provides for geological exploration and subsequent hydrocarbon production at the investment blocks of the Ustyurt oil and gas region—Boyterak, Terengkuduk, Birgori, Haroy, Karakalpak, and Kulboy.

According to the deal, prospecting and exploration work, as well as the drilling of at least one exploratory well, were due to be completed within five years. During this period, SOCAR will act as the operator.

Uzbekistan 24 TV channel reported that a large field with enormous reserves at 100 million tons of oil and 35 billion cubic meters of natural gas were projected to be discovered.