Uzbekistan: $2 billion invested in oil exploration and production on the Ustyurt plateau

Uzbekistan and the State Oil Company of Azerbaijan (SOCAR) are launching a joint project for the exploration and production of hydrocarbons on the Ustyurt plateau. According to the Ministry of Energy of the Republic of Uzbekistan, the total investment in the project will amount to about two billion US dollars.

The production sharing agreement (PSA) was signed on July 24. The document lays down the legal and commercial basis for further development of the promising oil and gas region. SOCAR has been identified as the project operator and will receive a contractual right to a part of the extracted resources. The first exploration well is expected to be drilled within the next five years.

According to preliminary geological exploration estimates, the volume of oil reserves in this area may reach 100 million tons. These resources, if proven commercially effective, can fully cover Uzbekistan's domestic oil needs for up to 25 years. Additionally, the potential of the natural gas field is estimated — possible reserves are estimated at up to 35 billion cubic meters.

The project is part of Uzbekistan's strategy to diversify suppliers, reduce dependence on imported hydrocarbons, and strengthen energy security. Cooperation with SOCAR demonstrates Uzbekistan's interest in expanding international partnership in the oil and gas sector and attracting major players from the CIS and neighboring countries.

The Ustyurt plateau was previously considered as a strategically important area for geological exploration. In previous years, other international companies, including British and Russian investors, have also shown interest in the development. However, since 2021, a number of projects in the region have been suspended due to a global reassessment of investment priorities in the hydrocarbon sector. The resumption of the active development phase against the backdrop of stable domestic policies and growing energy demand opens up new opportunities for long-term economic growth.

The joint project of Uzbekistan and SOCAR will also become a driver of employment, creating new jobs and contributing to the development of infrastructure in the surrounding regions. It includes both exploration drilling and construction of the necessary production and transportation facilities. Taking into account current trends in the oil and gas market, the project has every chance to become one of the largest energy contracts in the Central Asian region over the past decade.