Azerbaijan's SOCAR plans to launch geological exploration at investment blocks in Uzbekistan in Q1 2026
BAKU. Aug 25 (Interfax) - The State Oil Company of the Azerbaijan Republic (SOCAR) plans to launch geological exploration work at the investment blocks of the Ustyurt oil and gas region of Uzbekistan in the first quarter of 2026, JSC Uzbekneftegaz Management Board Chairman Bakhodirjon Sidikov said.
"According to the approved roadmap, geological exploration work at the investment blocks of the Ustyurt region is planned for launch in the first quarter of 2026. This will be possible after completing the organizational and preparatory stage and obtaining all the necessary permits," Sidikov said in an interview with Azerbaijan's Report agency.
Sidikov clarified that the companies currently have equal stakes in the project. SOCAR will be the operator at the geological exploration stage.
"Meantime, the participation structure envisages a flexible adjustment mechanism that could be applied depending on the stage of project implementation. At the first stage, Uzbekneftegaz provides institutional and technical support, namely, assists in obtaining permits, transfers geological and geophysical information, and interacts with government agencies," Sidikov said.
Sidikov also said that investors are financing the initial stage with an equal distribution of obligations between the parties. "If necessary, it is possible to attract external financing. The government, in turn, creates favorable tax and legal conditions, including through a special tax regime as part of the production sharing agreement (PSA)," he emphasized.
Sidikov also said that the exploration phase is intended for five years under the terms of the PSA.
Sidikov added that Uzbekneftegaz maintains a strategic interest in participating in international projects, including projects in Azerbaijan.
"We are open to dialogue and are analyzing various scenarios for potential partnership with SOCAR. Uzbekneftegaz is interested in leading projects in Azerbaijan. We are considering cooperation opportunities both in the investment format and as part of technological exchange and production cooperation," Sidikov said.
The possibilities to cooperate in such areas as digitalizing processes in the oil and gas industry, implementing green technologies, and improving industrial safety are currently under discussion, he said.
On July 24, Uzbekistan's Energy Ministry, SOCAR and Uzbekneftegaz signed a PSA that envisages geological exploration and subsequent production of hydrocarbons at six investment blocks of the Ustyurt oil and gas region, namely, Boyterak, Terengkuduk, Birgori, Haroi, Karakalpok and Kulboy.
According to forecasts, a field with oil reserves of 100 million tonnes and natural gas of 35 billion cubic meters may be found at the Ustyurt blocks. It is assumed that it would be possible to extract 5 million tonnes of oil annually after the launch of the project on the Ustyurt plateau.
In accordance with the terms and conditions of the PSA, there are plans to conduct 3D seismic exploration on at least 1,000 sq. km and, based on the results, launch geological exploration work on one well. If hydrocarbon deposits of industrial significance are discovered, then the parties will launch development and subsequent production.
Overall investments in the project are estimated at $2 billion.
