 A regional energy supplier |
The energy sector of Uzbekistan is almost entirely state controlled. Uzneftegas was founded in 1992, as the state's representative of the oil and gas industry while the Ministry of Power Industry and Electrification is concerned with providing permanent electric energy and heating to the population of Uzbekistan and also to the national economy.
Step by step, Uzneftegas has been undertaking the privatisation of branch enterprises. The implementation of investment programs will result in the reconstruction of existing enterprises and the establishment of new enterprises based on international standards. Uzneftegas has offered foreign partners 13 investment blocks for research, investigation and consequent exploitation. It is projected that the oil and gas industry will reach a total amount of foreign investment of more than $1,5 billion by 2001. Investors in the oil industry so far have been Texaco (US) who have been involved in the production of high quality lubricant oils, UzMal Oil (Malaysia) to exploit oil deposits, Enron to exploit gas condensate deposits in the Bukhara region, American Engineering Incorporated who have introduced a gas compressor manufacturing enterprise for motor transport and Baker Hugues who are installing up-to-date-technologies which should increase oil production up to 150 tones per day.
On 16 January 2001, President Islam Karimov, in his "Speech on Economic Performance" said that Uzneftegas, in an endeavour to intensify its efforts on prospecting for oil and natural gas, would undergo some structural changes. An additional system of incentives and privileges was created to attract foreign investors into this sector. It should be noted that the measures being taken today will produce results not tomorrow but in 2002 - 2005 at best.
Uzbekistan has a rich supply of natural energy resources estimated to be in the region of one trillion USD. There are more than 160 oil and gas deposits in the five regions of the country with 92 already exploited. The depth of oil and gas deposits varies between 800 meters in the Bukhara and Khiva region and 6 000 meters in the central part of the Fergana Valley. Oil reserves amounted to 600 million USD by 1999.
Extracted oil and gas condensates are refined at oil refineries in Fergana, Altiarik and Bukhara reaching a processing capacity of 11 million tones annually. Last year, Uzbekistan's oil production totalled 180 000 barrels per day. With the valuable input of foreign partners who supply this sector with modern machinery and modern technology, oil production is climbing. It has been estimated that beyond the year 2000 production quality, processing capacity and export volume will increase considerably resulting in the following projected production figures: petroleum 400 000 tones; diesel oil 700 000 tones; fuel oil 200 000 tones; aviation fuel 150 000 tones.
Uzbekistan is the 10th largest gas producer
in the world, with reserves amounting to 1,87 cubic
meters. The major natural gas fields are mainly
situated in the regions of Bukhara and Fergana.
Natural gas provides most of the necessary energy
for local power generation facilities, and furthermore
these gas reserves are expected to meet national
demands for more than 35 years. In 1998, 51.1 billion
cubic meters was produced, a 10% of the 1997 output.
By 2001 natural gas exports should amount to nine
billion cubic meters and liquid gas 40 000 cubic
meters. The total output of identified gas resources
is presently 32% of Uzbekistan's total gas resources.
The national gas transportation system is part of
the united CIS countries gas pipeline, vitally important
not only for countries in Central Asia, but further
afield towards the Caucasus, and this system has
a capacity of more than 20 billion cubic meters
per year. |
Uzbekistan, in terms of electricity, is the largest producer among the Central Asian republics, and thus, a net exporter. There are plans to develop the electric energy sector until 2010 - which include the production of new power stations, and the construction of substations and electric networks, taking into account the permanent growth in demand by the population of Uzbekistan. The Ministry of Power Industry and Electrification of the Republic of Uzbekistan intends to offer more power stations for privatisation within the next 10 years.
Uzbekistan is a major supplier of energy to its neighbours. In February 2001an agreement was signed between Uzbekistan and Kyrgystan on the joint use of water and power engineering facilities. Accordingly, Uzbekistan will supply Kyrgystan with 700 million cubic meters of natural gas, enough to meet the needs of Bishkek and Osh, two major cities in Kyrgystan in addition to the 52 million cubic meters that will be supplied for public services such as heating and household utilities. Uzbekistan will also supply 80 000 tones of fuel oil to its neighbour for heating plants and other public services as well as 120 tones of various petroleum products. In return, Kyrgystan will supply 2,2 billion kWh of electricity at 3.3 US cents for 1,000 kWh in 2001.
The 37 electric power plants functioning throughout Uzbekistan produce a combined fixed capacity of 34bn kW/h from thermal power plants as well as hydroelectric power plants giving Uzbekistan a potential capacity of 55bn kWh. The main plants are situated in Syrdarya, Angren, Tashkent and Navoi, accounting for 87% of the total established capacity of the power supply system. The Talimardjan thermal power plant, the largest plant in Central Asia located in the southern part of Uzbekistan expected to have an output of 3 200mW/h, is presently under construction. and will provide electricity for the needs of Uzbekistan and other republics in the Central Asian region.
The EBRD has provided a $27 million loan to the Uzbek government to overhaul the Syrdarya Hydroelectricity Plant to improve energy efficiency and move closer to privatisation of the power sector. Using the Syrdarya Power station as a base, the Syrdarya Energetic Company has been established as a joint stock company, a major step towards privatisation. All the repair, instalment and construction organisations are already joint stock companies, and the process of privatising the Syrdaya Power Plant is a pioneer project, which has been very successful to date. The main goal of the project is that the reconstructed units must achieve the designed 300mW/h-power productivity, lowering fuel expenses to 330g/kwh. The project will result in an increased annual production plus a considerable saving of natural gas, and the installation of new equipment and methods will increase operational safety and reliability. According to Mr Ergash Shaismatov, Minister of Power Industry and Electrification, "The Syrdarya Energetic Company is a pioneer in our industry in terms of transformation into a joint stock company. I think after having done this we will privatise other power station pulling them out of state owned status within 10 years." The Ministry of Power Industry and Electrification also plans to construct three substations in Tashkent. Concrete offers from foreign investors such as Mitsubishi, Mitsui, Ariston and other have been submitted. Investment consists mainly of the supply of equipment and technology.
Uzbekistan has great potential for a small hydroelectric power structure. The Agriculture and Water Resources Ministry has already adopted a program to develop small hydroelectric power stations at water-development works, planning to build 15 small power stations by 2005. These stations will have a total annual capacity of 1,3 billion kWh. Moreover, the Ministry also plans to economise on fuel and power resources by using solar heating to meet the demand for hot water in towns and villages.
The fact that Uzbekistan inherited a viable natural energy infrastructure from Soviet times is important to the country's present energy situation. Although much needs to be modernised, replaced and maintained, Uzbekistan has done well in not only sustaining its provision of energy to its population, but also in increasing production to a point where it exports to neighbouring countries. Thus, future investment in this sector will only produce even better output in the future. |
