The latest drilling results in Uzbekistan have given a ray of hope for authorities in Tashkent that the country still has significant remaining untapped gas resources that can be commercialised using the latest reservoir recovery technologies.

With the first gas developments in the country dating back to the second half of the 1950s, gas output in Uzbekistan has been in steady decline in the last two decades as little investment flowed into brownfield developments.

However, shortly after taking office at the end of 2016, President Shavkat Mirziyoyev proposed urgent steps to reverse the decline in the gas industry, which was still operating under Soviet standards and using outdated machinery and equipment.

Mirziyoyev signed a resolution in March the following year instructing state oil and gas conglomerate Uzbekneftegaz to embark on a programme to drill more wells and introduce modern recovery technologies such as hydraulic fracturing.

Unbundling

The president followed with a massive unbundling in the oil and gas sector with the goal of attracting international oil majors and investors to help boost production and achieve energy independence.

The unbundling was aimed at splitting Uzbekneftegaz into several business entities, separating transportation, marketing and distribution from exploration and production.

Authorities also said they wanted the restructured Uzbekneftegaz, with responsibilities limited to oil and gas developments, to perform on par with Russia's Lukoil and Gazprom, which, along with China National Petroleum Corporation, made their way into the country during the tenure of Mirzyoyev's predecessor, Islam Karimov.

Uzbekneftegaz is understood to have been technically unprepared to implement Mirziyoyev’s order to start major drilling in 2017, so it had to sign a wide-ranging contract with the country’s well-connected and privately owned drilling contractor Eriell to do the job. According to Eriell, by the end of September, it completed almost 250 wells under the first phase of the president’s programme to grow gas output in the country.

Eriell still has to complete about 50 wells before the end of this year, according to its executives.

Hydraulic fracturing

The company is then expected to continue the programme's second phase, which will run from next year to the end of 2021.

According to Eriell, almost every well in Uzbekistan, whether a new one or re-worked, is expected to benefit from hydraulic fracturing due to the complexity of the gas reservoirs.

Eriell said that while new wells flow at rates ranging between 19,000 and 90,000 cubic metres per day, output at the wells that were fracked rose to between 120,000 and 250,000 cmd. The company is preparing to frack more than 100 gas wells completed earlier, the company said.

Eriell executive director Vitaly Dokunikhin said that key challenges to successful performance in Uzbekistan are the lack of modern drilling rigs, difficult geology and logistics of supply.

Drilling in Uzbekistan often takes three times longer than a well in Russia, where Eriell also operates, Dokunikhin said.

Moreover, the time required to mobilise rigs and other equipment in landlocked Uzbekistan is greater than that of other Central Asian countries, he noted.

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Uzbekistan drilling points to more gas