On August 25, Bakhodirjon Sidikov, Chairman of the Board of Uzbekneftegaz JSC, discussed in an exclusive interview with Report the timelines for geological exploration, pilot production prospects, Azerbaijan’s role in enhancing processing capacities, and new opportunities for bilateral cooperation.

Sidikov stated that geological exploration in the Ustyurt investment blocks is scheduled to begin in the first quarter of 2026, allowing time to complete organizational and preparatory activities, including obtaining necessary permits. He explained that under the recently signed Production Sharing Agreement (PSA), participation shares are currently distributed on a parity basis, but the structure allows for flexibility for adjustments depending on the project stage. SOCAR has been designated as the operator during the exploration phase, while Uzbekneftegaz will provide institutional and technical support, including facilitating permits, transferring geological and geophysical data, and liaising with government authorities. The potential transfer of operator functions will be considered based on project results and strategic interests.

According to the PSA, the geological exploration phase will last five years, after which, if commercial reserves are confirmed, the project will move to pilot production and the testing of development technologies. Sidikov noted that geophysical and geological surveys have previously been conducted on some Ustyurt blocks, and Uzbekneftegaz is providing archival geological, seismic, and drilling data to its partners according to established procedures. Initial funding for exploration is being provided by investors with equal obligations, while the state ensures favorable tax and legal conditions, including a special tax regime within the PSA framework.

Sidikov also reiterated Uzbekneftegaz’s strategic interest in participating in international projects in Azerbaijan, including potential involvement in the Shah Deniz, Absheron, Azeri-Chirag-Gunashli, and Umid-Babek fields, either as an investor, operator, or technological partner. He highlighted ongoing discussions with SOCAR on joint projects in areas such as exploration, underground gas storage, gas chemistry, LNG, digitalization of oil and gas processes, implementation of green technologies, and industrial safety.

Regarding petrochemical cooperation, Sidikov emphasized that the development of processing and petrochemical capacities is a national priority for Uzbekistan. Uzbekneftegaz is actively exploring joint production facilities, raw material partnerships, technological exchange, and the potential localization of processing or petrochemical production with Azerbaijani participation, taking into account logistical, infrastructural, and technological factors. He noted that Uzbekneftegaz and SOCAR established a joint trading company for international hydrocarbon trading at the end of 2023, focusing on optimizing logistics routes and accessing key export markets, including Türkiye and the European Union, while exploring further expansion in both physical trading and flexible supply to third countries.