Photo: Uzbekistan Ministry of Energy press service
Uzbekistan’s Ministry of Energy, Azerbaijan’s state oil company SOCAR, and Uzbekneftegaz have signed a production sharing agreement (PSA) for exploration and development of the Ustyurt oil and gas plateau, the ministry announced.
The agreement covers geological exploration and subsequent hydrocarbon extraction in designated investment blocks in the Ustyurt region. A 3D seismic survey is planned over an area of more than 1,000 square kilometers to refine the geological understanding of the deposits. Based on aerial surveys, the parties will begin drilling a test well. If commercially viable reserves are discovered, the project will enter a development phase followed by industrial-scale hydrocarbon production.
SOCAR President Rovshan Najaf said the agreement is part of the company’s long-term strategy to develop the energy sector in Central Asia and the Caspian region. He emphasized that SOCAR would apply cutting-edge technologies and its accumulated expertise to ensure stability, infrastructure development, and Uzbekistan’s energy security.
Uzbekistan’s Minister of Energy, Jurabek Mirzamakhmudov, described the partnership with SOCAR as a strategic direction in the country’s efforts to diversify investment and adopt international best practices. He called the Ustyurt region a promising area and expressed hope that the project would drive technological advancement and economic growth.
Chairman of the Board of Uzbekneftegaz, Bakhodir Sidikov, stated that the agreement reinforces the company’s reputation as a reliable partner open to innovation and large-scale international investment, thereby supporting the development of Uzbekistan’s oil and gas industry.
✅ A production sharing agreement is a contractual mechanism in which a foreign investor gains exclusive rights to explore and extract resources, recouping expenses through a portion of the extracted output. Remaining profits are then divided between the parties according to a predetermined ratio. This model is intended to fairly distribute risk, attract investment, and promote technology transfer.
▶️ SOCAR is Azerbaijan’s fully vertically integrated national oil and gas company, active across the entire value chain from exploration and production to refining and marketing. The company plays a major role in international energy projects.
▶️ Uzbekneftegaz is Uzbekistan’s largest state-owned energy company, operating across the full oil and gas cycle—from exploration and drilling to production, processing, transportation, and sales of oil, gas, and petrochemical products. It accounts for over 60 percent of the country’s total natural gas output.
Uzbekneftegaz and SOCAR signed a strategic partnership agreement in 2016, which included training Uzbek specialists at SOCAR and joint participation in offshore projects in Azerbaijan. In 2017, the companies agreed to conduct joint oil and gas operations in both Azerbaijan and Uzbekistan, as well as in third countries.
In 2018, SOCAR, Uzbekneftegaz, and BP Exploration signed a memorandum on joint geological exploration across several investment blocks. After BP exited the project in 2021 due to its shift toward a green strategy and withdrawal from hydrocarbon investments, SOCAR and Uzbekistan began exploring new options for cooperation and further development. In August 2024, the two companies signed another cooperation agreement in the oil and gas sector.
In early July 2025, during President Shavkat Mirziyoyev’s official visit to Azerbaijan, another round of negotiations between SOCAR and Uzbekneftegaz was held in Baku. The two sides agreed to jointly conduct geological exploration at deposits located on Uzbekistan’s side of the Ustyurt plateau.
