NATURAL GAS, OIL AND ENERGY IN UZBEKISTAN

ENERGY IN UZBEKISTAN

With a highly energy-intensive economy, Uzbekistan holds sizeable hydrocarbon reserves of mostly natural gas. Total primary energy consumption in Uzbekistan was about 2.04 quadrillion British thermal units (Btu) in 2014, according to BP's 2015 Statistical Review. Natural gas represented the majority of consumption (85 percent), while consumption of petroleum products (6 percent), coal (4 percent), and hydroelectricity (5 percent) represented the remainder.[Source: U.S. Energy Information Administration (EIA) /=\]

In the 1990s, Uzbekistan became self-sufficient in fuels, although the fuel industries have remained inefficient and wasteful. The smuggling of oil into neighboring countries has led to periodic domestic oil shortages. In 1999 oil production reached a peak of 8.1 million metric tons before declining to 5.4 million metric tons in 2005. In the post-Soviet era, Uzbekistan has increased its production of natural gas by an estimated 40 to 50 percent, reaching 60 billion cubic meters in 2005. Gas exports go primarily to neighboring countries, minimizing concerns about long-distance pipelines. In 2002 a production-sharing agreement with a British company, Trinity Gas, began developing gas fields in central Uzbekistan, and subsequent Russian investments have substantially increased gas output. For 2007 Uzbekistan significantly raised its price for natural gas sold to Kyrgyzstan and Russia. [Source: Library of Congress February 2007 **]

Uzbekistan has enough oil and natural gas to meet its domestic but does not have large reserves like Kazakhstan and Turkmenistan. Uzbekistan doesn't border the Caspian Sea as Kazakhstan and Turkmenistan do, and thus doesn't ave access to Caspian Sea oil. Nevertheless some officials have said that two thirds of the country lies on top of oil and gas. Oil and gas deposits have been found under the Aral Sea and the former Aral Sea at the border of Uzbekistan and Kazakhstan, which is one of the main reasons Uzbekistan has not been very aggressive in trying to reclaim the lake.

Despite being relatively rich in energy resources, Uzbekistan was a net importer of fuels and primary energy throughout the Soviet period. Uzbekistan also has small coal reserves, located mainly near Angren, east of Tashkent. In 1990 the total coal yield was 6 million tons. [Source: Library of Congress, March 1996 *]

Total Primary Energy Consumption in 2012: 2.276 Quadrillion Btu, 36th in the world. Total Primary Energy Production in 2012: 2.62 Quadrillion Btu, 38th in the world. Carbon dioxide emissions from consumption of energy: 123.2 million Mt (2012 est.), country comparison to the world: 39. [Source: CIA World Factbook. /=\]

Electricity in Uzbekistan

Uzbekistan also is self-sufficient in electric power. However, because infrastructure is in poor condition in the 37 operating power stations and their distribution networks, experts estimate that sometime after 2006 Uzbekistan no longer will produce a net surplus of electric power. [Source: Library of Congress February 2007]

Electricity - production: 52.53 billion kWh (2012 est.), country comparison to the world: 51 Electricity - consumption: 45.07 billion kWh (2011 est.): country comparison to the world: 51. Electricity - exports: 12.25 billion kWh (2011 est.), country comparison to the world: 17 Electricity - imports: 12.16 billion kWh (2011 est.), country comparison to the world: 15. [Source: CIA World Factbook =]

Electricity - installed generating capacity: 12.35 million kW (2011 est.), country comparison to the world: 52. Electricity - from fossil fuels: 86 percent of total installed capacity (2011 est.), country comparison to the world: 86. Electricity - from nuclear fuels:0 percent of total installed capacity (2011 est.), country comparison to the world: 198. Electricity - from hydroelectric plants: 14 percent of total installed capacity (2011 est.), country comparison to the world: 105. Electricity - from other renewable sources: 0 percent of total installed capacity (2011 est.), country comparison to the world: 135. =

The coal deposits on the Angren River east of Tashkent and the natural gas deposits near Bukhara are prime fuels for Uzbekistan's thermoelectric power plants. The well-developed hydroelectric power generating system utilizes the Syrdariya, Naryn, and Chirchiq rivers, all of which arise to the east in the mountains of Kyrgyzstan. Agreements with Kyrgyzstan and Tajikistan, through which the Syrdariya also flows, ensure a continued water flow for Uzbek power plants. [Source: Library of Congress, March 1996 *]

Oil in Uzbekistan

Uzbekistan had 594 million barrels of proven crude oil reserves as of January 2015, according to Oil and Gas Journal. In 2014, total petroleum and other liquids production was 67,000 barrels per day (b/d). Roughly 60 percent of all known oil and natural gas fields are located in the Bukhara-Khiva region. The region is the source of approximately 70 percent of the country's oil production.[Source: U.S. Energy Information Administration /=\]

Crude oil - proved reserves: 594 million bbl (1 January 2014 est.), country comparison to the world: 49. Crude oil - production: 100,000 bbl/day (2013 est.), country comparison to the world: 46. Crude oil - exports: 0 bbl/day (2010 est.), country comparison to the world: 200. Crude oil - imports: 0 bbl/day (2010 est.), country comparison to the world: 136. [Source: CIA World Factbook =]

In the 1990s, Uzbekistan became self-sufficient in fuels, although the fuel industries have remained inefficient and wasteful. The smuggling of oil into neighboring countries has led to periodic domestic oil shortages. In 1999 oil production reached a peak of 8.1 million metric tons before declining to 5.4 million metric tons in 2005. [Source: Library of Congress February 2007 **]

Oil production tripled in the decade after independence in 1991. Oil production has likewise been small; Uzbekistan has relied on Russia and Kazakhstan for most of its supply. Oil production was 3.3 million tons in 1992. But the discovery in 1994 of the Mingbulak oil field in the far northeastern province of Namangan may ultimately dwarf Uzbekistan's other energy resources. Experts have speculated that Mingbulak may prove to be one of the world's most productive oil fields. Located in the central basin of the Fergana Valley, the deposits could produce hundreds of millions of dollars worth of oil in the late 1990s. Qoqdumalaq in western Uzbekistan also has rich oil and natural gas deposits, reportedly containing hundreds of millions of tons of oil. [Source: Library of Congress, March 1996 *]

Oil Production and Refineries in Uzbekistan

Uzbekistan has three oil refineries located in Fergana, Alty-Arik, and Bukhara, with a total crude oil distillation capacity of 224,000 b/d. The refineries typically operate below capacity because of insufficient domestic oil production. [Source: U.S. Energy Information Administration]

Refined petroleum products - production: 92,300 bbl/day (2010 est.), country comparison to the world: 75. Refined petroleum products - consumption: 105,600 bbl/day (2013 est.), country comparison to the world: 75. Refined petroleum products - exports: 4,968 bbl/day (2010 est.), country comparison to the world: 90. Refined petroleum products - imports: 655.9 bbl/day (2010 est.), country comparison to the world: 200. =

A new refinery was built near Bukhara to process oil from deposits in the Kokdumalak oil fields. Another project refurbished a refinery in the Fergana Valley. The two refineries boosted annual production capacity to 8.5 million tons a year.

Natural Gas in Uzbekistan

Uzbekistan has large reserves of natural gas. It was the third largest natural gas producer in Eurasia, following Russia and Turkmenistan, in 2014, with about 2 Tcf of natural gas produced. The country consumed 1.7 Tcf of natural gas in 2014. Uzbekistan had 65 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2015. According to the National Oceanic and Atmospheric Administration, Uzbekistan flared 60 billion cubic feet (Bcf) of natural gas in 2011 and ranks among the world's top 20 gas flaring countries, although flaring has declined overall since 2006. [Source: U.S. Energy Information Administration /=\]

Natural gas - production: 62.9 billion cubic m (2012 est.), country comparison to the world: 14. Natural gas - consumption: 52.7 billion cubic m (2012 est.), country comparison to the world: 17. Natural gas - exports: 10.2 billion cubic m (2012 est.), country comparison to the world: 19. Natural gas - imports: 0 cubic m (2012 est.), country comparison to the world: 144. Natural gas - proved reserves: 1.841 trillion cubic m (1 January 2014 est.), country comparison to the world: 20. [Source: CIA World Factbook =]

Dry Natural Gas Production in 2011: 2,226 Billion Cubic Feet, 13th in the world. Proved Reserves of Natural Gas in 2014: 65 Trillion Cubic Feet, 20th in the world. /=\

Uzbekistan posses large undeveloped reserves of natural gas. In the post-Soviet era, Uzbekistan increased its production of natural gas by an estimated 40 to 50 percent, reaching 60 billion cubic meters in 2005. The republic was the third largest producer of natural gas in the former Soviet Union behind Russia and Turkmenistan, producing more than 10 percent of the union's natural gas in the 1980s. In 1992 Uzbekistan produced 42.8 billion cubic meters of natural gas. Deposits are concentrated mainly in Qashqadaryo Province in the southeast and near Bukhara in the south-central region. The biggest gas deposit, Boyangora-Gadzhak, was discovered in southeastern Surkhondaryo Province in the 1970s. [Source: Library of Congress, March 1996 *]

Energy Companies in Uzbekistan

Uzbekneftegas is the national oil and gas company. Uzbekistan maintained state control over hydrocarbon resources following the end of the Soviet Union, forming the state company, Uzbekneftegaz, to manage the oil and natural gas sectors. The government initially made it a priority to focus on oil and natural gas production from existing fields to meet domestic demand, rather than investing in new reserves. Russia's Lukoil and Gazprom and China National Petroleum Corporation (CNPC) are among the most heavily invested companies in Uzbekistan's oil and natural gas industries. [Source: U.S. Energy Information Administration /=\]

Gas exports go primarily to neighboring countries, minimizing concerns about long-distance pipelines. In 2002 a production-sharing agreement with a British company, Trinity Gas, began developing gas fields in central Uzbekistan, and subsequent Russian investments have substantially increased gas output. For 2007 Uzbekistan significantly raised its price for natural gas sold to Kyrgyzstan and Russia. [Source: Library of Congress February 2007 **]

The Russian company Lukoil has invested almost $1 billion to search for and extract oil and gas in central Uzbekistan. Enron had a $1.3 billion with Uzbekistan to develop its gas fields.

Foreign Countries and Uzbekistan Oil and Natural Gas

Decreases in oil production have prompted the Uzbek government to largely abandon an inward-focused energy policy that promoted self-sufficiency and subsidized domestic prices. New laws aim to attract foreign investment through production-sharing agreements and joint ventures with Uzbekneftegaz, a state-owned oil and natural gas company, to boost both production and new reserves. Inadequate export options and limited access to hard-currency markets are some of the deterrents to foreign investment in upstream activities, according to IHS Energy. /=\

Uzbekistan is scheduled to be a member of the Shanghai Cooperation Organization’s Asian Energy Club, which Russia proposed in 2006 to unify oil, gas, and electricity producers, consumers, and transit countries in the Central Asian region in a bloc that is self-sufficient in energy. Other members would be China, Kazakhstan, Kyrgyzstan, and Tajikistan. **

Although Uzbekistan’s petroleum and natural gas output was used mostly within the republic in the Soviet period, pipelines to Tajikistan, Kazakhstan, and Russia exported increasing amounts of natural gas to those countries in the early 1990s.

Pipelines in Uzbekistan

Insufficient pipelines connected to Uzbekistan to export higher volumes of hydrocarbons and aging energy infrastructure have slowed production, distribution, and exports in recent years. Uzbekistan serves as a transit country for natural gas flowing from Turkmenistan to Russia and China. In addition, two new natural gas pipelines, Gazli-Kagan and Gazli-Nukus, were built to connect the Ustyurt and Bukhara-Khiva region with the existing system. Uzbekistan exported about 300 million cubic feet (MMcf) in 2014, with nearly half sent to Russia and the remainder sent to China and Kazakhstan. Uzbekistan has a gas export agreement with China to send 350 Bcf/y through the third line of the Central Asia-China gas pipeline, but fulfilling this commitment will require greater investment in gas production from new upstream projects. [Source: U.S. Energy Information Administration /=\]

Pipelines: natural gas: 10,401 kilometers; oil: 944 kilometers (2013). In 2006 Uzbekistan had 9,594 kilometers of natural gas pipelines, 868 kilometers of oil pipelines, and 33 kilometers of pipelines for refined products. In 1992 there were 325 kilometers of oil pipeline and 2,470 kilometers of natural gas pipeline. [Sources: Library of Congress, CIA World Factbook]

Uzbekistan's sole domestic crude oil pipeline links the Fergana and Alty-Aryk refineries. Uzbekistan has virtually no international oil pipeline infrastructure other than a pipeline linking the Shymkent refinery in Kazakhstan to the Chardzhou refinery in northeastern Turkmenistan. /=\

Although Uzbekistan’s petroleum and natural gas output was used mostly within the republic in the Soviet period, pipelines to Tajikistan, Kazakhstan, and Russia exported increasing amounts of natural gas to those countries in the early 1990s.

Alternative Energy in Uzbekistan

Mark Synnott wrote in National Geographic: “Yusup Kamalov is a senior researcher in wind energy at the Uzbekistan Academy of Sciences. He’s also an environmental activist, chairing the Union for the Defense of the Aral Sea and Amu Darya. His father was a renowned historian during the Soviet era, and his grandfather was the last elected khan, or leader, of the semiautonomous republic of Karakalpakstan before it became part of the Uzbek Soviet Socialist Republic during the 1930s. [Source: Mark Synnott, National Geographic, June 2015 \+/]

“His country doesn’t yet have a single wind farm, but that hasn’t dampened Kamalov’s enthusiasm for his chosen professional field. His obsession with wind has led him to build two hang gliders, which he flies from a local hilltop to better understand the air currents. “I want to know the wind like a bird does,” he says. But his interests extend to all parts of the environment, and he has taken time off from his research to show me the remnants of what was once a massive body of water teeming with life and, perhaps more ominously, what the retreating waters left behind.

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, U.S. government, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

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© 2008 Jeffrey Hays

Last updated April 2016

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