21:04 / 16.02.2023

“Uzbekistan has never given away its rights to anyone for free” – Kamoliddin Rabbimov

Political scientist Kamoliddin Rabbimov, who participated in an open dialogue between government members and activists, shared his findings. He noted that the 35-year contract covers only 1 field, only 13 out of 300 oil and gas fields in Uzbekistan are used by Lukoil and 2 by Gazprom, and the allegation that companies from Russia have taken over the oil and gas sector of Uzbekistan is inappropriate. 

Minister of Energy of Uzbekistan and Chairman of Uzbekneftegaz JSC, during a meeting with activists answered questions that arose after the publication in foreign media of an investigation into gas agreements in Uzbekistan. 

Political scientist Kamoliddin Rabbimov, who took part in the meeting, spoke about the conclusions that he made based on its results.

“It is impossible to describe the entire 4-hour meeting here. The main conclusion: Uzbekistan did not give away its rights to anyone for free. Uzbekistan can be a difficult partner for some, but by no means an easy one,” Rabbimov, who participated in the Sunday meeting, wrote.

According to him, the information presented in the investigation can be divided into two parts. The situation becomes clearer when some of the information is commented on. Some of the information is completely wrong.

“For example, Uzbekistan has not yet reached an agreement with Russia on the construction of a nuclear power plant. Negotiations are underway. The parties are still arguing about the price, term and other issues,” the political scientist says.

He noted that only 13 out of 300 oil and gas fields in Uzbekistan are used by Lukoil and another 2 by Gazprom.

Rabbimov noted that the 35-year investment project refers to only one field – “Mustaqillikning 25 yilligi”.

“We are talking about only one gas field. The Minister of Energy, holding a closed contract in his hand, showed a map of this site. Imagine that you have gas or oil on your land. You also have a certain amount of money. Now, in order to put this money to good use, you offer investors to extract gas and oil on your land. To find out how much gas and oil is in your land, you turn to the world’s most serious “appraisal” companies.

The estimated value of gas or oil in your land is determined. If you sell to an investor, you sign a “Production Sharing Agreement” (PSA). The land and the deposit belong to Uzbekistan, technologies, exploration and production belong to investors.

That is, not a single soum was spent from the state budget of Uzbekistan. Uzbekistan does not even give guarantees,” the political scientist wrote.

He added that an agreement will be concluded on the extracted product, and the initial distribution of profits from the “M25” field will be 50/50.

“Now, if an investor, having taken this land, cannot produce products, this is the problem of the investor, Uzbekistan does not give any guarantees,” Kamoliddin Rabbimov says.

“Why 35 years? According to the minister, such contracts have been concluded all over the world for a very long time. 8 years from this period will be spent on exploration. Is it possible to conclude this contract, say, for 10-15 years? It is possible, but then the Uzbek side must give guarantees and the distribution of finished products will no longer be 50/50, the investor will receive more products. After all, the investor is ultimately thinking about how to make a profit. The Minister said that attracting investments to Uzbekistan is a very difficult task.

The head of Uzbekneftegaz noted that it is necessary to change the legislation in Uzbekistan, that is, it is advisable to introduce the approval of contracts by Oliy Majlis; operating deposits should not be transferred to foreign investors. It was also noted that the salaries of employees are low, employees leave for foreign companies,” Rabbimov writes.

The political scientist also gave an explanation of the authorities about the closeness of agreements and contracts.

“This is the working format of companies around the world. Officials say that, for example, there are no international agreements signed in neighboring Kazakhstan or Azerbaijan in the public domain, these agreements are also completely closed. Minister Mirzamakhmudov opened the agreement on the field “Mustaqillikning 25 yilligi” and showed the section “Confidentiality”.

During the 4-hour conversation, journalists and bloggers, including myself, bombarded these two government officials with questions. At the end of the dialogue, we believed that the situation is quite complicated, and if the available information is not explained to the general public, then the people’s idea that: “all our gas and oil resources are given to Russia” cannot be changed,” Kamoliddin Rabbimov noted.

For information, according to Jurabek Mirzamakhmudov, an agreement was signed between the state and investors on the distribution of products in the 50/50 format for the project of geological exploration, development of reserves and construction of a gas chemical complex at the field “Mustaqillikning 25 yilligi” in Surkhandarya region.

Uzbekneftegaz owns a 20% stake in Surhan Gas Chemical – the project’s operator and is owned by a consortium of investors, which ultimately ensures a 50/50 profit sharing.

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