Uzbekistan state-owned oil and gas producer Uzbekneftegaz has been able to raise more than $257 million in new financing from a consortium of three Russian banks and the country’s state Russian Agency for Insurance of Export Credits & Investments (Eksar), according to the company.

The consortium is led by Russian state-run VEB Bank, with participation of privately held Gazprombank and its affiliate Bank GPB International.

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According to Uzbekneftegaz, the loan will be mainly used to buy Russian equipment and services.

These will be used to rehabilitate legacy oil and gas fields that have remained under its control in Uzbekistan following completion of a slow-moving industry restructuring that has remained in the shadows in 2020 and for most of this year.

Oilfieldes transfer

The process started early in 2020 when authorities in Tashkent ordered Uzbekneftegaz to transfer its control of 105 domestic oilfields to a joint venture known as Jizzakh Petroleum.

The joint venture was established by Uzbekneftegaz together with privately held Belvor Holding and a subsidiary of Russian gas monopoly Gazprom, Gas Project Development Central Asia.

Belvor is a Cyprus-registered company reportedly owned by Uzbek businessman Bakhtiyer Fazylov.

Fazylov is also the founder of oilfield services provider Eriell and building contractor Enter Engineering, which today dominate the Uzbek industrial landscape.

Sixty-three of the 105 oilfields transferred to Jizzakh last year are still in the development phase, with a total annual production of about 500,000 tonnes (3.7 million barrels) of crude, or about 70% of the nation's total output.

Though Uzbekneftegaz held a 49% stake in the joint venture earlier this year, the producer last month sold its shareholding to Belvor for an undisclosed amount, boosting Belvor’s stake in Jizzakh to an estimated 98%, according to reports in Tashkent.

Uzbekneftegaz once had a monopoly over all oil and gas assets in Uzbekistan, but is now in second place after Jizzakh.

Apparently to reflect changes in the joint venture ownership, Jizzakh has recently been renamed Sanoat Energetika Guruhi (which translates to English as Industrial Energy Group), according to reports in Tashkent.