Uzbekistan and Azerbaijan create operating company for Ustyurt project

Today, a grand opening ceremony of the Ustyurt Operating Company office was held in Tashkent. The company was created to implement the Production Sharing Agreement (PSA) for the Ustyurt region in collaboration with the State Oil Company of Azerbaijan (SOCAR), Report informs with reference to Uzbekneftegaz JSC.

"This event is an important step in implementing initiatives in the energy sector and further strengthening the strategic partnership between Uzbekistan and Azerbaijan," the company noted.

Uzbekneftegaz emphasizes that the opening of the Ustyurt Operating Company office indicates the project's transition to an active phase.

"In a short time, the PSA was approved, the operating company was established and registered, professional teams were formed, and the necessary permits were obtained. Currently, preparation for field geological exploration at the deposit has begun," the company said.

Uzbekneftegaz notes that Ustyurt Operating Company will contribute to expanding the country's resource base, improving the efficiency of geological exploration, and ensuring long-term energy stability.

The company's main tasks include implementing modern technologies, increasing production capacity, and sustainable industry development.

"This project creates a solid foundation for expanding bilateral interstate relations. The new management and cooperation mechanisms being formed within the initiative will serve the interests of both countries. The office opening strengthens the institutional basis of the partnership and creates favorable conditions for the successful implementation of the next project phases," Uzbekneftegaz emphasizes.

On July 24, 2025, the Ministry of Energy of Uzbekistan, SOCAR, and Uzbekneftegaz signed a Production Sharing Agreement providing for geological exploration and subsequent hydrocarbon production in the Ustyurt region.

The PSA provides for exploration, development, and production in six Ustyurt investment blocks - Boyterak, Terengkuduk, Birgori, Kharoy, Karakalpok, and Kulboy. SOCAR will act as the operator during the geological exploration phase. According to the document, prospecting and exploration work and drilling of at least one exploratory well are planned during the initial five-year period. Under the Agreement terms, 3D seismic exploration is planned to cover an area of at least 1,000 square kilometers.

According to forecasts, deposits with oil reserves of 100 million tons and natural gas of 35 billion cubic meters may be found in the Ustyurt blocks. It is assumed that after the project launch, it will be possible to extract 5 million tons of oil annually on the Ustyurt plateau. Total investments in the project are estimated at $2 billion.

The Chairman of the Board of Uzbekneftegaz JSC, Bakhodirjon Sidikov, previously told Report in an interview that geological exploration work in the investment blocks of Uzbekistan's Ustyurt region is planned to begin in the first quarter of 2026.