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SOCAR and Uzbekneftegaz Sign Production Sharing Agreement for Hydrocarbon Exploration and Production in the Ustyurt Region
On July 24, 2025, the Ministry of Energy of the Republic of Uzbekistan, the State Oil Company of the Republic of Azerbaijan (SOCAR), and Uzbekneftegaz JSC signed a Production Sharing Agreement (PSA), which provides for geological exploration and subsequent hydrocarbon production at investment blocks in the Ustyurt oil and gas region.
This Agreement is a clear testament to the foresight and determination of the President of the Republic of Uzbekistan, Shavkat Mirziyoyev, and the President of the Republic of Azerbaijan, Ilham Aliyev. Their political will and personal commitment to strengthening bilateral relations have elevated the strategic partnership between the two countries to a new level. The signing of the Agreement marks an important milestone in the development of energy cooperation between Uzbekistan and Azerbaijan and lays a solid foundation for long-term collaboration in hydrocarbon exploration and production.
According to the terms of the Agreement, 3D seismic surveys will be conducted on an area of no less than 1,000 square kilometers. Based on the results, geological exploration will begin on one well. If commercially viable hydrocarbon reserves are discovered, the parties will proceed to the development and production stage.
Rovshan Najaf, President of SOCAR:
"The signing of this Agreement is a reflection of our long-term strategy to develop the energy sector in Central Asia and the Caspian region. SOCAR is excited to begin this project, leveraging its extensive experience and advanced technological solutions. We are confident that this cooperation will make a significant contribution to ensuring Uzbekistan’s energy security and developing its infrastructure."
Jorabek Mirzamahmudov, Minister of Energy of the Republic of Uzbekistan:
"The partnership with SOCAR reflects New Uzbekistan’s strategic goal of diversifying investment sources and adopting the best international practices. The Ustyurt region has great potential, and the signing of the PSA opens new horizons for its effective development. We believe this project will become a key driver of technological progress and economic growth."
Bakhodirjon Sidikov, Chairman of the Board
of Uzbekneftegaz JSC:
"This Agreement represents a major milestone in deepening sectoral cooperation and advancing the national oil and gas industry. It reinforces the position of Uzbekneftegaz JSC as a reliable and innovation-driven partner, open to international cooperation and large-scale investment."
About the Production Sharing Agreement (PSA)
The PSA is a special form of contractual relationship between the state and an investor, under which the investor receives the exclusive right to carry out oil and gas operations, including exploration, development, and production of hydrocarbons. The investor recovers incurred costs from a portion of the extracted resources (so-called cost recovery oil), and the remaining profit oil is shared between the parties in agreed proportions. This model ensures fair distribution of risks and revenues, stimulates the inflow of foreign direct investment, and facilitates the transfer of advanced technologies to the host country.
About SOCAR
SOCAR (State Oil Company of the Azerbaijan Republic) is the national oil and gas company of Azerbaijan, operating across the full value chain—from exploration and production to processing, transportation, and sales of oil, gas, and petroleum products. The company is actively expanding its international presence and is involved in strategic projects across Europe, Asia, and the Middle East. SOCAR is known as a technologically advanced and reliable partner with a high level of corporate responsibility.
About Uzbekneftegaz JSC
Uzbekneftegaz JSC is the largest state-owned energy company in Uzbekistan, carrying out full-cycle projects in the oil and gas industry—from geological exploration and drilling to production, processing, transportation, and marketing of oil, gas, and petrochemical products. The company accounts for over 60% of the country’s total natural gas output. Uzbekistan consistently ranks among the world’s leading gas producers. Uzbekneftegaz JSC is focused on implementing cutting-edge technologies, developing international projects, and strengthening its position as a highly efficient integrated energy company with a robust export and investment strategy.
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