Uzbek oil giant to join Azerbaijan's Shah Deniz project
By Sabina Alizade
At the Second Uzbekistan-Azerbaijan Interregional Forum held in the city of Quba, Uzbekistan's Minister of Investment, Industry, and Trade Laziz Kudratov announced that Uzbekistan's Uzbekneftegaz state oil and gas company could join the Shah Deniz gas condensate project on the Azerbaijani shelf of the Caspian Sea. The statement confirms Uzbekistan's desire to deepen cooperation with Azerbaijan in the energy and mining sectors.
The minister emphasized that Uzbekneftegaz's involvement in the Shah Deniz project would require significant financial and legal expertise with the participation of foreign consultants. He also highlighted that Uzbekistan is taking these prospects seriously and is ready to actively participate in the project.
The Shah Deniz project began back in 1996 and continues to develop. In 2013, the contract for the field's development was extended until 2046. The field's gas reserves are estimated at 1.2 trillion cubic metres, with only 20% of this volume extracted so far.
Dr Elshad Mammadov, an expert in economics , has told News.Az that just as Azerbaijan is the development locomotive of the South Caucasus region, Uzbekistan is a driving and development-oriented country in Central Asia. He noted that recently there has been an increase in Uzbekistan's demand for energy carriers.
"Uzbekistan has positive indicators related to energy carriers, and production is increasing. The domestic market is expanding, and the demand of the domestic market cannot be met by local resources alone. This creates dependency on imports. Cooperation with Azerbaijan in this area could be a high priority for Uzbekistan. The smooth political relations between our countries deepen economic cooperation in the region," Mammadov said.
The expert pointed out that Central Asia, the South Caucasus, the post-Soviet area, and neighbouring states are prioritizing deepening their cooperation. He emphasized that if Uzbekistan were to establish its economy and energy sector through alternative means, such as importing liquefied gas, it would lead to problems due to its high cost.
"However, if Uzbekistan imports energy carriers from Azerbaijan within the framework of investment projects, this will naturally provide more competitive advantages for Uzbek producers. Joint implementation of investment projects opens new opportunities for both countries. We are currently talking about the extraction sector, but there is also the processing sector.
These sectors are interconnected. If today's investment is tied to the energy sector, in the future, the development of the processing sector will deepen technological cooperation between organizations and enterprises. This technological cooperation will also apply to high-tech industries, allowing us to produce more of our products for local markets and reduce import dependency in the region," Mammadov said.
He noted that Uzbekistan's domestic market is expanding and its demographic growth is increasing, creating a combined market of 50 million between Uzbekistan and Azerbaijan. He also mentioned the potential for the joint development of the automotive industry in the future.
"Our agreement in the energy sector today will spread to other areas of the economies of both Uzbekistan and Azerbaijan in the future," Mammadov concluded.
Uzbekneftegaz's involvement in the Shah Deniz project will yield mutual benefits to both countries, deepen cooperation in the energy sector, and strengthen their positions on the global energy market. This cooperation is expected to speed up economic growth and development in the region.
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