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LUKOIL plans to invest US$2 billion in Uzbekistan

Botschaft Usbekistan, April 26, 2019

Russian company LUKOIL plans to invest about US$2 billion more to develop existing projects. This was stated by the President of LUKOIL, Vagit Alekperov. This was reported by the press service of the Ministry of Energy of Uzbekistan.

On 25 April 2019, a visiting meeting of the Board of Directors of LUKOIL was held in Bukhara. It was attended by the President of PJSC "LUKOIL" Vagit Alekperov and the Minister of Energy of the Republic of Uzbekistan Alisher Sultanov.

As Vagit Alekperov, President of PJSC LUKOIL, noted, the investment climate in Uzbekistan has changed dramatically over the past two years.

“We have been working here since 2003 and today, of course, the changes that are taking place in the government’s pool, changes in monetary policy, in the energy market, they lay the foundation for very dynamic growth. The growth rates that we see - and this is 6-7% of annual GDP growth, they are simply amazing. Therefore, we are happy that we are a part of this process. And I once again want to emphasize that LUKOIL is set up for new investments, for new geological exploration, which we are starting on the territory of the republic and are confident that all this will dynamically develop,” Alikperov said in an interview.

He also stressed that LUKOIL plans to contribute about US$2 billion for the development of existing projects, where the company still has a large investment cycle. Investments, in particular, will be focused on measures to prevent a decline in future production decline at both the Gissar field and the Kandym group field.

As it is known in this particular region of Uzbekistan, LUKOIL, together with its Uzbek partners, is implementing one of its priority projects to develop the Kandym group of fields. The key object of this large-scale project is the Kandym gas processing complex, one of the largest in Central Asia.

The success of this joint project, which is a clear evidence of the socio-economic development of modern Uzbekistan, was also noted by members of the Board of Directors of LUKOIL.

“It is a great pleasure for all of us and for me personally to come here and see for myself the high quality of the construction of a gas processing plant here in Uzbekistan. That is, we saw with our own eyes that the Kandym gas processing complex was built in a short time and to the highest standards,” said Roger Munnings, a member of the Board of Directors of PJSC LUKOIL. “We discussed here, including the development of foreign projects of the company, that is, being implemented outside the Russian Federation, which is especially important here since we are in Uzbekistan. I want to mention the modern openness policy of Uzbekistan, which speaks of the desire of your country to gradually integrate into the processes of the world economy, and to do so as soon as possible. ”

“As you know, LUKOIL is one of the largest foreign investors in Uzbekistan, and this is encouraging, since this company can also contribute to the development of one of the famous countries on the Silk Road. For the further growth of your country, it has all the possibilities, including tremendous, both underground and aboveground resources, I mean your historical heritage, such cities as Bukhara, Samarkand and others. I think that such opportunities open up great prospects for economic growth, further strengthening the welfare of the people of Uzbekistan, preserving your rich historical heritage,”vsaid Ivan Pictet, Master of Economics, member of the Board of Directors of PJSC LUKOIL, Chairman of the Board directors of Symbiotics.

“We see a wonderful project that says that the economy is growing in your country, the well-being of people is growing, that the specialists here have a high education and qualification, they know their business well. Here, a lot of things are changing for the better and these changes are simply amazing, today it is a completely different country with such projects - very profitable, very promising. And still it is necessary to understand that the Kandym gas processing complex is a very “clean” project, which provides an opportunity for a good state of ecology, and therefore, sustainable development. Here everything is done according to international standards, and I congratulate you on this. Therefore, it is natural that it was here that we discussed the company’s projects at the global level, including projects in Uzbekistan - a country with a rich history,” said Tobi Gati, a member of the Board of Directors of PJSC LUKOIL.

As part of the agenda, the meeting discussed issues and made decisions, including on recommendations to the Annual General Shareholders Meeting on the amount of dividends on PJSC LUKOIL shares based on the 2018 results.

The Annual General Meeting of Shareholders was recommended to approve the payment of final dividends for the year 2018 in the amount of 155 rubles per ordinary share. Taking into account the previously paid interim dividends, the total amount of dividends for 2018 will be 250 rubles per ordinary share, which exceeds the same indicator for the previous year (215 rubles) by 16%.

Also at the meeting of the Board of Directors of PJSC LUKOIL a report was presented on the progress of the implementation of international projects of the Company in the Exploration and Production business segment and amendments were approved to the main terms and conditions of the contract concluded with the President of PJSC LUKOIL.

LUKOIL is one of the largest investors in the oil and gas industry of Uzbekistan and one of the strategic partners of JSC “Uzbekneftegaz”.

The companies are actively working together to implement the production sharing agreement (PSA) for the Kandym group of fields, the Khauzak and Shady areas, and the Kungrad section and the PSA for fields in the South-West Gissar and Ustyurt regions of the Republic of Uzbekistan.

In particular, as part of the Gissar Production Sharing Agreement in 2017, the main production and technological facilities were commissioned: a comprehensive gas treatment unit with a design capacity of 4.4 billion cubic meters per year, installation of preliminary gas treatment, as well as six gas collection points. The launch of the facilities made it possible to bring gas production at the Gissar group of fields to the design level of production in the amount of 5 billion cubic meters a year.

According to the Kandym PSA, on 19 April 2018, the Kandym gas processing complex was launched with a processing capacity of 8.1 billion cubic meters. m. of gas per year. It is intended for the preparation of gas from the Kandym group of fields - the production of marketable gas, stable gas condensate and salable sulfur. There are 71 wells at the Kandym field, a natural gas collection system has been created.

In general, the volume of actually utilized investments (capital investments) of PJSC LUKOIL for the implementation of PSA Kandym and PSA Gissar amounted to about US$7 billion.

The logical continuation of mutually beneficial cooperation between Uzbekneftegaz and LUKOIL was the signing of a Memorandum of Understanding on a joint study of geological and geophysical data in order to assess the prospects for oil and gas potential of three investment blocks of the Republic of Uzbekistan.

The document was signed during the visit of the President of the Russian Federation to our country in October 2018. In accordance with it, a working group was established, which is currently engaged in the study of materials on investment blocks.

Original-Inhalt von Botschaft Usbekistan und übermittelt von Botschaft Usbekistan