Uzbekistan, Azerbaijan launch Ustyurt energy project with new Tashkent office

A grand opening ceremony was held in Tashkent for the office of the Ustyurt Operating Company, established to implement the Production Sharing Agreement (PSA) for the Ustyurt region in collaboration with the State Oil Company of Azerbaijan (SOCAR), Uzbekneftegaz JSC announced.

“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, Caliber.Az reports per local media.

Uzbekneftegaz emphasized that the opening of the Ustyurt Operating Company office signals the project’s transition into 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 stated.

The Ustyurt Operating Company is expected to expand Uzbekistan’s resource base, enhance the efficiency of geological exploration, and ensure long-term energy stability. Its key objectives include implementing modern technologies, increasing production capacity, and promoting sustainable development of the industry.

“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 added.

On July 24, 2025, the Ministry of Energy of Uzbekistan, SOCAR, and Uzbekneftegaz signed a Production Sharing Agreement covering geological exploration and subsequent hydrocarbon production in the Ustyurt region. The PSA includes six investment blocks—Boyterak, Terengkuduk, Birgori, Kharoy, Karakalpok, and Kulboy—where SOCAR will act as operator during the geological exploration phase. Under the agreement, prospecting, exploration, and drilling of at least one exploratory well are planned during the initial five-year period, alongside 3D seismic surveys covering at least 1,000 square kilometres.

Forecasts indicate that the Ustyurt blocks may contain oil reserves of 100 million tons and natural gas of 35 billion cubic metres, with potential annual oil production of five million tons once the project is fully operational. Total investments in the initiative are estimated at $2 billion.

Bakhodirjon Sidikov, Chairman of the Board of Uzbekneftegaz JSC, previously said that geological exploration in the Ustyurt investment blocks is expected to commence in the first quarter of 2026.

By Vafa Guliyeva