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Uzbekistan introduces new legal mechanism to increase hydrocarbons extraction
Uzbekistan’s Ministry of Energy has introduced a new type of service contract where contractors are offered tax allowances and payment deferments in a bid to increase hydrocarbons extraction.
Under the new legal mechanism, external contractors – selected on a competitive basis – will be able to perform work to increase hydrocarbon production at their own expense and risk. Contractors can then either sell their share of oil/gas condensate, in raw material form, into the domestic market; or process it within Uzbekistan for sale either domestically or internationally.
These sales and processing options do not apply to natural gas, which is sold on a contractual basis to the domestic market, although natural gas can be partially used for the contractor’s own needs.
The contract will be applicable for use in fields with hard-to-recover and small hydrocarbon reserves and apply where a 50% share is currently held by the Uzbek state or Uzbek government entity.
News Item details
Journal title: Petroleum Review
Countries: Uzbekistan -
Subjects: Exploration and production, Energy policy
