Uzbekistan has amended its policy of trying to achieve fossil fuel independence, after strong interest from international investors in solar and wind.
Speaking from the capital, Tashkent, on Wednesday, Deputy Energy Minister Bekhzot Narmatov said the government is no longer focused on achieving long-term energy independence from the import of fuels such as natural gas and crude oil.
The change in policy comes four years after President Shavkat Mirziyoyev ordered sweeping reforms in the state-run oil and gas sector, instructing state producer Uzbekneftegaz to invest heavily in the exploration of new gas assets and the rehabilitation of depleted fields.
Mirziyoyev has invited international companies to take stakes in greenfield and brownfield oil and gas projects, and wants to build a legal framework to attract international oilfield services providers.
Narmatov confirmed earlier reports that Uzbekistan imported 1.5 billion cubic metres of gas from Turkmenistan in the first quarter of this year, even though Uzbekistan has sufficient domestic gas-producing capacity to cover any supply deficit.
“The price offered by our trading partner, Russian gas giant Gazprom, for gas supplies from Turkmenistan was very attractive," he explained.
“We will continue to import oil and gas from all possible sources. Meanwhile, the country will now prioritise those domestic gas projects that are most cost-effective.”
He added that international oilfield service provider Schlumberger is auditing Uzbekneftegaz to rate its oil and gas-producing projects based on their economic efficiency, with results to be announced in August.
While declining to say what will happen to Uzbekneftegaz's high-cost projects, Narmatov said the country will strive to provide cost-effective energy to its consumers to “ensure economic growth and bring benefits to the economy” — whether they be domestic supplies or imports.
Authorities will also amend their planning philosophy for the oil and gas industry to what he described as a “profit-based” approach, rather than “volume-based”.
Narmatov said the authorities expect to replace any possible shortfall in oil and gas with electricity from solar, wind and hydroelectric generation.
The government believes that it will have access to about 3 gigawatts of power from wind generation in two to three years' time.
A further 1GW of power is expected to come online in the short term from a set of solar plants, with several construction contracts awarded this year and last. The country has a 5GW long-term target for solar.
Authorities will also provide subsidiaries and other incentives to people to invest in better insulation, home energy efficiency and “off-grid home heating solutions”. Such measures could free up to 2 Bcm of gas annually, according to Narmatov.
