Russia’s Lukoil Claims Uzbekistan Racking Up Gas Debts
Russian oil and gas company Lukoil claimed in comments reported by local media March 5 that Uzbekistan racked up $600mn in debt in 2018 by taking gas from local fields that the pair shares as output growth stutters.
A portion of Lukoil’s production share at Uzbek gas fields was supplied to the local market, according to senior vice president for oil and gas production Azat Shamsuarov. The fuel has not yet been paid for, the executive added.
Under production sharing agreements (PSAs) with Uzbekistan, Lukoil gleaned 13.4bn m3 of gas in 2018. That represents year on year growth of around 67%, thanks to the development of upstream and downstream projects.
According to the PSAs, Lukoil’s share is fully export-oriented. However, some of its 2018 volumes were sold on Uzbekistan’s domestic market, Shamsuarov said. He did not reveal the exact volume.
Lukoil’s production share from Uzbek fields is likely to grow to 14.5bn m3 for 2019, of which the Russian company plans to deliver 5bn m3 to Uzbekistan’s domestic market. The remainder will head to China and Russia.
Lukoil’s capital expenditure for exploration and production projects in Uzbekistan in 2018 stood around Rub 20.93bn ($320mn), about one quarter of the level seen in 2017. The Kandym gas processing complex was launched in April 2018.
Since 2004, Lukoil has spent $8bn in Uzbekistan. The company announced last year that it targets volumes of 15bn m3/yr from its production share of Uzbek fields by 2022.
Uzbekistan boosted gas production by 6.1% last year to a total of 59.84bn m3, the central Asian republic's state statistics committee said January 16. That fell far short of the planned 16.8% growth, which would have sent output to 66bn m³.