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    Uzbek Output Fails to Meet Plan


Higher output was still short of the expectation.

by: Dalga Khatinoglu, Ilham Shaban

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Natural Gas & LNG News, Asia/Oceania, Corporate, Exploration & Production, Political, News By Country, Uzbekistan

Uzbek Output Fails to Meet Plan

Uzbekistan boosted gas production by 6.1% last year to 59.84bn m3, the central Asian republic's state statistics committee said January 16, but fell far short of the planned 16.8%, or 66bn m³.

The country also loses a lot of gas in the transportation system. President Shavkat Mirziyoyev said in December that the volume lost during production and transportation is 20%-23% of gross gas production. Sources indicate that most losses are from the gas grid. But flaring is continuing to fall, reaching 849mn m³ in 2017, according to World Bank data, having declined each year from 1.49bn m³ in 2013.

Last year, Uzbekistan produced 53.4bn m³ sales gas, compared with 60.9bn m³ in 2007. Its consumption stood at 41.6bn m³, compared with 48bn m³ in 2007, according to BP statistics. The country exported 1.7bn m³ to Kazakhstan, 6.7bn m³ to Russia and 3.4bn m³ to China in 2017.

The country has increased gas prices for domestic market five times since 2014 with a further increase due mid-2019 in order to dampen demand and the amount spent on subsidising consumer gas prices. According to the International Energy Agency, Uzbekistan's subsidies totalled $3.8bn for gas (up 4.9% year on year) and $1.3bn for electricity (up 52%) in 2017, together representing 12% of GDP.

The statistics committee put crude oil production at only 746,400 metric tons in 2018, or 8.2% less than the previous year, while gas condensate production rose 9.9% to 2.14mn mt.

Despite the setback, the country plans to increase gas production by 53.5bn m³/yr, crude oil by 1.1mn mt/yr and gas condensate by 1.9mn mt/yr in three years, and sees investments of $30.4bn in total. This is very ambitious for a country with about $50bn GDP, though the international Monetary Fund has estimated a very rapid economic growth for Uzbekistan in coming years, estimating GDP at about $62bn in 2022 and above $66bn in 2023. Two Russian companies, Lukoil  and Gazprom, are eyeing further investments in the country's gas sector.