Uzbekneftegaz expects to sign PSA with Gazprom on Jel field before year-end
TASHKENT. May 13 (Interfax) - Uzbek national oil and gas holding Uzbekneftegaz plans to sign a production-sharing agreement (PSA) with Russian Gazprom covering development of the Jel field before the end of the year.
"We expect to settle on things and begin work before the end of the year," Uzbekneftegaz CEO Shokir Faizullayev told journalists on Monday.
Talks on development of Jel are being conducted in the context of the pending 10-year partnership agreement between Uzbekneftegaz and Gazprom.
Their previous partnership agreement expired in 2012 and the new agreement will be signed before the end of the year.
Gazprom had planned last year to prepare a report on estimated reserves of natural gas and condensate at Jel and confirm it with the Uzbek government's State Reserves Commission.
The field is close to the Shahpahty field now under production and tied to the trunk pipeline network, which will reduce the cost of developing Jel.
Gazprom also planned to continue geological exploration of the Shahpahty investment block, located in the Kumaya exploration section.
Plans were to test the six productive horizons detected by the Kumaya-2 well, which was drilled to a depth of 4,170 meters.
Gazprom began producing natural gas at the Shahpahty field under a PSA in August 2004. Cumulative production since then amounts to about 2 billion cubic meters. A total of $25 million has been invested in the project.
Last February Gazprom announced the completion of geological exploration work in the Ustyurt region performed at a total cost of $400 million.
The five-year program approved in 2006 had three stages. The first two involved geological and geophysical study and drilling of exploration wells. The third phase, scheduled for 2009-2011, resulted in the discovery of the Jel gas and condensate field in the Shahpahty investment block. Gas reserves at the field may total about 10 billion cubic meters, according to preliminary estimates.
