Uzbeks Seek Korean Help for Oil and Gas Exploration
Uzbeks Seek Korean Help for Oil and Gas Exploration
South Korean firms are to explore for oil and gas in Uzbekistan, although the scale of possible profits is hard to predict.
During a state visit to South Korea on February 10-12, Uzbek president Islam Karimov signed an agreement for investment in developing the Surgil gas field and building a chemicals plant.
Surgil is located on the northwestern Ustyurt plateau, which has 16 known deposits of oil and gas. The Korean investment should boost development of the plateau’s resources, which to date has been flagging.
Once the gas processing plant is up and running, it will produce polypropylene and polyethylene plastics, some of which will be exported to Russia and Iran.
Economic analysts say the Surgil gas plant should allow Uzbekistan to reduce exports of natural gas in favour of plastics, which will earn it more money and help its beleaguered economy.
“They want to launch primary processing of gas and sell products with a high added value on foreign markets,” says Viktor Ivonin, an economist in Tashkent.
The South Korean investment has been on the cards since 2008, when the Uzbekneftegaz and a consortium led by Korea Gas Corporation set up a joint venture, but there was a delay to the deal being signed off on.
“Last October, one of the consortium participants announced that the enterprise would be launched in 2014 rather than 2012,” said an expert Uzbek oil and gas expert who asked not to be named. “The main argument for postponing it was that the cost estimates had more than doubled.”
Initially the gas plant was costed at 1.85 billion US dollars, but this has increased over time. During Karimov’s visit to South Korea, the figure being mentioned was 3.5 billion dollars.
As the oil and gas expert noted, “There’s no guarantee that this is the final figure.”
The reasons for the increase are unknown, but NBCentralAsia analysts say it may be connected with uncertainty over the size of the Surgil gas deposit.
(NBCA is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)
During a state visit to South Korea on February 10-12, Uzbek president Islam Karimov signed an agreement for investment in developing the Surgil gas field and building a chemicals plant.
Surgil is located on the northwestern Ustyurt plateau, which has 16 known deposits of oil and gas. The Korean investment should boost development of the plateau’s resources, which to date has been flagging.
Once the gas processing plant is up and running, it will produce polypropylene and polyethylene plastics, some of which will be exported to Russia and Iran.
Economic analysts say the Surgil gas plant should allow Uzbekistan to reduce exports of natural gas in favour of plastics, which will earn it more money and help its beleaguered economy.
“They want to launch primary processing of gas and sell products with a high added value on foreign markets,” says Viktor Ivonin, an economist in Tashkent.
The South Korean investment has been on the cards since 2008, when the Uzbekneftegaz and a consortium led by Korea Gas Corporation set up a joint venture, but there was a delay to the deal being signed off on.
“Last October, one of the consortium participants announced that the enterprise would be launched in 2014 rather than 2012,” said an expert Uzbek oil and gas expert who asked not to be named. “The main argument for postponing it was that the cost estimates had more than doubled.”
Initially the gas plant was costed at 1.85 billion US dollars, but this has increased over time. During Karimov’s visit to South Korea, the figure being mentioned was 3.5 billion dollars.
As the oil and gas expert noted, “There’s no guarantee that this is the final figure.”
The reasons for the increase are unknown, but NBCentralAsia analysts say it may be connected with uncertainty over the size of the Surgil gas deposit.
(NBCA is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)
