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Malaysia's Petronas may withdraw from two energy projects in Uzbekistan

24 May 2013 00:47 (UTC+04:00)
Malaysia's Petronas may withdraw from two energy projects in Uzbekistan

By Aynur Jafarova

Malaysia's Petroliam Nasional Berhad (Petronas) may withdraw from the two production sharing agreements (PSAs) in Uzbekistan.

Petronas and Uzbek state-owned holding company Uzbekneftegaz signed a PSA on the Urga, Kuanish and Akchalak fields in the Ustyurt region in 2009. The agreement was concluded for a term of 25 years.

The Malaysian company also established a subsidiary, Petronas Carigali (Urga) Operating Company LLC, for work in the licensed areas.

Petronas had informed the Uzbek government of its intention to withdraw from the PSA for the exploration and development of the Baysun investment block in the Surkhandarya region as well as from the PSA to develop the fields of the Urga, Kuanish and Akchalak group, a source in Uzbekistan's government told Azerbaijan's Trend news agency on May 22. However, the source did not disclose the reasons behind the Malaysian company's intentions.

Earlier, Uzbekistan planned to grant the Urga, Kuanish and Akchalak fields for development to the Russian giant Gazprom. In 2006, the Russian company received a license for geological exploration on seven investment blocks in Ustyurt. However, a PSA with Gazprom has not been signed as Gazprom charged that the reserves at those deposits are not of commercial interest.

The PSA for the Baysun investment block was signed in June 2010. That year, the Uzbek government allowed Petronas to attract co-investors in the PSA for Baysun and create a consortium with them. In 2011, Petronas and the Saudi Arabian Delta Oil company signed an agreement on the establishment of a consortium for the PSA on the Baysun investment block.

Overall, Petronas has significantly reduced its participation in the oil and gas projects in Uzbekistan over the past two years.

In 2011, Petronas withdrew from the international consortium for the exploration and development of the Uzbek part of the Aral Sea in the framework of the PSA.

The Malaysian company also pulled out of the project on exploration work on the Surkhan investment block.

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