LUKOIL to invest $5.5 bln in Uzbekistan gas fields

TASHKENT: Russian oil major LUKOIL plans to invest $5.5 billion in gas exploration in Uzbekistan where it plans to produce 16 billion cubic metres (bcm) of natural gas per year by 2015, LUKOIL said on Thursday. LUKOIL's President Vagit Alekperov said the company, in which U.S. ConocoPhillips holds a 20 percent stake, plans to increase its gas reserves in the Central Asian country. "We hope the forecast reserves for our geological blocks, which are now estimated at 600 bcm, will be confirmed, and the company will be able to increase them. That is why we hope to raise output in the future," Alekperov told a news briefing.

LUKOIL Overseas, an international arm of Russia's No. 2 oil producer, started production at the $2 billion Khauzak gas project in the former Soviet country in November. The production sharing project, developed jointly by LUKOIL, with a 90 percent stake, and Uzbek state energy company UzbekNefteGaz, is expected to produce 12 bcm of gas by 2012, a company spokesman said on Thursday. Last month, LUKOIL completed the $758 million acquisition of SNG Holdings Ltd, a group with the rights to South-Western Gissar and Ustyurt oil fields in Uzbekistan, where it plans to produce 4 bcm of gas by 2012, said the spokesman.

LUKOIL is also part of a consortium developing an Aral Sea production sharing project in Uzbekistan. Other project parters include Malaysia's Petronas ,China's CNPC and Korea National Oil Corporation. Uzbekistan and neighbouring Turkmenistan are are Central Asia's main natural gas producers. In 2006, Uzbekistan produced 62 bcm of gas and exported 12.6 bcm. Russia is the main export destination for Uzbekistan, whose pipelines are controlled by Russian gas export monopoly Gazprom . But Uzbekistan is studying new export routes and earlier this year agreed to build a new pipeline to China. No time frame for the project has been set.