BAKU, Azerbaijan, July 24. The Ministry of Energy of Uzbekistan, the State Oil Company of Azerbaijan (SOCAR), and Uzbekneftegaz have signed a Production Sharing Agreement (PSA) for hydrocarbon exploration and development in investment blocks within the Ustyurt oil and gas region, Trend reports.
According to Uzbekistan’s Ministry of Energy, the agreement is aimed at strengthening the strategic partnership between the two countries and marks a key milestone in deepening bilateral energy cooperation.
Under the agreement, 3D seismic surveys will be conducted across an area of at least 1,000 square kilometers. Based on the findings, drilling will begin on an initial well. If commercially viable reserves are discovered, the parties will proceed with field development and production.
SOCAR President Rovshan Najaf stated that the company’s involvement is in line with its long-term strategy to expand its presence in Central Asia and the Caspian region. “SOCAR is excited to embark on this project, applying our expertise and advanced technologies. We believe this partnership will significantly contribute to Uzbekistan’s energy security and infrastructure development,” he said.
Uzbekistan’s Minister of Energy, Jurabek Mirzamakhmudov, emphasized that working with SOCAR supports the country’s strategic goals of attracting foreign investment and implementing international best practices. “Ustyurt holds substantial potential, and this PSA opens up new opportunities for its development. We are confident this project will become a key driver of technological progress and economic growth,” the minister noted.
Bahodirjon Sidikov, Chairman of the Management Board of Uzbekneftegaz, called the agreement an important step in enhancing sectoral cooperation: “This agreement strengthens Uzbekneftegaz’s position as a reliable, innovative partner open to international collaboration and large-scale investment.”
A Production Sharing Agreement (PSA) is a contract between a government and an investor granting the investor rights to carry out oil and gas operations, including exploration, development, and production. Under this model, the investor recovers costs through a portion of extracted resources (cost-recovery oil or gas), while the remaining production is shared between the parties according to agreed terms. PSAs are widely used to attract foreign investment, mitigate risks, and encourage the transfer of modern technologies.
At the time of publication, the editorial team had submitted an official inquiry to SOCAR requesting additional comments on the project. A response had not been received by the time the article was published.
