The Russian state oil and gas company Zarubezhneft is considering buying a stake in Jizzakh Petroleum in Uzbekistan, Kommersant said referring to three sources.
According to the publication, the terms of the deal have not yet been agreed. Jizzakh Petroleum was “showcased” to the Russian Lukoil, but the deal “did not work out,” said one of the sources.
Zarubezhneft did not comment on the deal, however, it announced its interest in "further development in Uzbekistan."
“The company is working on expanding its presence in the CIS countries, including in Kazakhstan, and hopes to form an oil and gas production cluster in this region,” the company said.
In 2019, Zarubezhneft acquired 50% in the Andijanpetro joint venture with Uzbekneftegaz for the development of mature fields in Uzbekistan South Alamyshik, Khartum and East Khartoum, with production in 2021 projetced at 20 thousand tons.
According to Dmitry Marinchenko of the Fitch agency, Uzbekistan produces very little oil - about 50 thousand barrels per day, which does not cover the needs of the economy.
According to him, if we proceed from the multiplicity of reserves in 15 years, it is clear that in theory Uzbekistan can double its oil production. But for this, the analyst specifies, investments are needed, including in new drilling rigs, and technologies - attracting foreign investors is, in this case, the norm for the industry.
About Jizzakh Petroleum
The Jizzakh Petroleum joint venture was set up in June 2017 by Uzbekneftegaz and Gas Project Development Central Asia (a subsidiary of Gazprom International). According to the project, the shares were redistributed with further decrease in the share of Uzbekneftegaz from 60% to 30% and an increase in the share of foreign-based founders from 40% to 70%.
In June 2020, the composition of the founders looked like this: Belvor Holding Limited from Cyprus (68%), Uzbekneftegaz (30%) and Gas Project Development Central Asia (2%), at the beginning of February 2021 the shares between Uzbekneftegaz and Belvor Holding Limited were split at 49%.
At the end of May, Uzbekneftegaz withdrew from the founders, and now Belvor Holding Limited owns a 98% stake. In addition, the legal name and status of the company have changed. It is now a foreign company, Sanoat Energetika Guruhi (Industrial Energy Group).
The media associate Belvor Holding Limited with the businessman Bakhtiyar Fazylov, who is the chairman of the board of the oil service company Eriell Group (he is also reported to be the main shareholder) and Enter Engineering (one of the largest EPC contractors in Uzbekistan, among the shareholders is Gazprombank).
In June 2020, the Fergana Oil Refinery was handed over to Jizzakh Petroleum for trust management.
According to the Jizzakh Petroleum, the company is one of the largest vertically integrated oil and gas companies in Uzbekistan. It accounts for about 80% of oil production and about 22% of proven oil reserves at 105 fields. The total production in 2020 amounted to 498.7 thousand tons of oil and 497.4 million cubic meters of natural gas.
As of January 1, 2021, in Uzbekistan, Lukoil operates in fields with gas reserves of 413.1 BCM (22.1%), Uz-Kor Gas Chemical - 109.6 BCM (5.9%), Surhan Gas Chemical - 106.6 BCM (5.8%), Jizzakh Petroleum - 84.9 BCM (4.5%).
