PRESS: Zarubezhneft may acquire stake in Jizzakh Petroleum

MOSCOW, Nov 11 (PRIME) -- Russian oil company Zarubezhneft is considering acquisition of a stake in Uzbekistan’s largest oil company Jizzakh Petroleum, although the terms of the deal are not coordinate yet, Kommersant business daily reported on Thursday quoting sources.

A source told Kommersant that the Uzbek company was presented to oil major Lukoil as well, but cooperation failed.

Currently, Cyprus-registered company Belvor Holding Limited controls Jizzakh Petroleum. The Cyprus company is owned by businessman Bakhtiyer Fazylov, CEO and core shareholder of oil servicing company Eriell, the key drilling contractor in Uzbekistan, the business daily reported.

Jizzakh Petroleum was created in 2017 by Uzbekneftegaz and Gas Project Development Central Asia (GPD), owned by gas giant Gazprom and Gazprombank’s Centrex. The company was to build a refinery in the Uzbek city of Jizzakh, but the project was suspended due to the lack of crude. Uzbek oil refining capacities significantly overshadow the country’s oil imports, while its own oil production amounted to 734,000 tonnes in 2020.

In 2019, the Uzbek government transferred licenses for 105 fields to Jizzakh. Belvor consolidated 98% in Jizzakh Petroleum in October 2021, and renamed the company into Sanoat Energetika Guruhi.

Dmitry Marinchenko from Fitch told Kommersant that Uzbekistan produces only around 50,000 barrels of oil per day that does not cover demand. Theoretically, the country may double the oil output, but it needs investment to do that.

A Gazprom representative told the business daily that the company no longer owns GPD. A Zarubezhneft declined to comment on the deal, but said that the company was interested in further development in Uzbekistan.

“The company is working on expansion of presence in the CIS countries, including Kazakhstan, and hopes to create an oil and gas production cluster in the region,” the representative said.

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