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Uzbekistan Owes LUKoil $ 600 Million for Gas

Uzbekistan owes LUKoil about $600 million in gas supplies in 2018, while under a debt restructuring agreement, the Russian company pledged to supply gas to Tashkent at a discount, Senior Vice-President of LUKoil, Azat Shamsuarov, said during a phone call with investors for mining.

In Uzbekistan, which Lukoil calls the growth point in hydrocarbon production, the company operates under the terms of a production-sharing agreement (PSA) in the Kandym-Khauzak-Shady-Kungrad and South-West Gissar projects. The gas produced on projects is mainly shipped to China.

Shamsuarov told investors that the debt of $600 million was due to the fact that Uzbekistan took part of the gas to the domestic market, although the terms of the PSA provide for the export of all gas produced in Uzbeksitan.

Now LUKoil in Uzbekistan produces about 14.5 billion cubic meters per year, the Vice-President of LUKoil added. The company has invested about $ 8 billion in projects in the country, of which $4 billion has already returned, he said.

As a result, we agreed on debt restructuring for 2 years in equal monthly installments, as well as on Lukoil supplying 5 bcm of gas a year to the domestic market of the country at a discount of 12.5 percent to the weighted average netback for prepayment, Shamsuarov said.

Earlier, by 2020, LUKoil planned to increase gas production in Uzbekistan to 16 bcm, of which 8 bcm were planned to be extracted on Kandym, 5 bcm on Gissar and 3 bcm on Khauzak. Lukoil, which came to Uzbekistan in 2004, had previously been eyeing new assets in this country.

Reuters

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