Gazprom subsidiary to invest USD 15 million in Uzbek gas field

Zarubezhneftegaz and Uzbekneftegaz, Uzbekistan's national holding company, Wednesday signed a Production Division Agreement in Tashkent for the gas remaining in the Shakhpakhty gas field, the press service of Gazprom announced. The agreement provides that the Russian side will invest USD 15 million for infrastructure modernization of the field and that profits from the sale of gas will be divided equally between the sides.

Production of gas from the field is expected to resume in the second half of 2004, with modernization to be finished by year's end. The field is expected to continue productive for 13 years and to reach a production level of 500 million cubic meters a year by 2005.

'This joint working of Shakhpakhty is a pilot project for Russia and Uzbekistan. Both sides have a material interest in continuing this kind of cooperation for the Ustyursky group of oil and gas fields,' Valery Gulev, general director of Zarubezhneftegaz, declared at the ceremonial signing of the agreement.

Operations at Shakhpakhy began in 1962. Its reserves at that time measured 39.9 billion cubic meters. Extracted reserves now total almost 8 billion cubic meters. Extractions at Shakhpakhty were halted in February 2002 because of the poor condition of equipment.

Zarubezhneftegaz was created on September 17, 1998. Gazprom owns 60.1% of it. The subsidiary manages Gazprom's foreign projects in the Middle and Near East, Southeast Asia and the Commonwealth of Independent States.

On December 17, 2002, Uzbekneftegaz and Gazprom signed an Agreement on Strategic Cooperation in the Gas Sector. Among other things, the agreement presumes purchases of Uzbek gas throughout the period 2003-2112 and joint projects in natural gas extraction.