Fergana Oil Refinery returns to full state ownership four years after privatization

The Fergana Oil Refinery has returned entirely to state ownership four years after its privatization process began. Changes in the state register of enterprises and organizations indicate that the State Assets Management Agency (SAMA) has been listed as the sole founder of the plant.

According to the corporate registry, SAMA now controls 100% of the charter capital of the Fergana Oil Refinery, which is valued at UZS 124.54 billion. As recently as May, the state agency held a 58.5% stake in the enterprise, while the remaining 41.5% was owned by the private energy company Sanoat Energetika Guruhi (Saneg).

The government initially handed over the operations of the Fergana plant to Saneg, which was operating under the Jizzakh Petroleum brand at the time, under a trust management agreement in 2020 as part of a broader restructuring of the country's economic sectors.

In May 2022, SAMA announced the outright sale of the refinery to Saneg for $100 million. Under the terms of that privatization agreement, the buyer committed to investing $380 million into modernizing the facility. The investment was intended to scale up the production of Euro–5 gasoline, diesel fuel, and liquefied petroleum gas, while expanding the refinery's processing capacity to at least 2 million tons annually.

The deal also included strict social guarantees. Saneg pledged to maintain the existing workforce size for two years, protect employee salary levels as of the transaction closing date, and preserve the core terms of the standing collective bargaining agreement.

By September 2022, Saneg had launched an extensive modernization program and reported securing more than $160 million in financing for the project, out of a projected total of $400 million.

However, the trajectory changed in January of this year when the Cabinet of Ministers issued a directive to find new investors for several strategic infrastructure projects managed by Saneg. This portfolio review included the Methanol-to-Olefin (MTO) gas-chemical complex, the modernization of the Fergana Refinery, the upgrade of the Bukhara airport, and the development of the Tebinbulak mining and metallurgical complex.

The government concurrently ordered the sale of non-core assets held by Saneg and its affiliated entities, Enter Engineering and Eriell. This restructuring followed disclosures in early March that the asset disposals were required to liquidate approximately $131 million in outstanding wage arrears accumulated by the corporate group.