Uzbekneftegaz chief executive Bakhodirzhon Sidikov has reiterated that the Uzbek company aims to to boost its gas production by between 4 billion and 5 billion cubic metres in 2020 from this year's expected total of 42 Bcm.

The state-owned company is also looking to bring in partners on other acreage to help propel longer-term production.

Sidikov said such steep growth after years of stagnation should be generated from the company’s investment in workovers of existing and idle wells on its Uzbek acreage.

He said gas production at 70% of the company’s fields is in decline because of low investments in brownfield development work in previous years.

Uzbekneftegaz is also finalising project documentation to start developing some of the 16 minor gas fields it has discovered in recent years, he said.

The anticipated output rise should be more than sufficient to satisfy the shortage of gas domestically during the winter period of peak consumption, estimated at about 1 Bcm.

Uzbekneftegaz also expects to be able to move forward in talks with Russian and international oil companies about awarding a number of blocks for exploration and development.

The company has delineated more than 20 blocks in the promising Ustyurt region in the country's north-west, and has offered them to potential partners to consider as exploration and development targets, Sidikov said.

To boost interest, Uzbekneftegaz drilled several exploration wells to depths of more than 4000 metres to prove the potential of deeper layers, as existing old seismic data mostly covers depths between 2500 and 3000 metres.

“These wells have demonstrated that the Ustyurt area has very good potential”, he said.

By the end of this year, Uzbekneftegaz hopes to be in position to present proposals of co-operation with at least three international companies in the Ustyurt area for consideration and approval by the government.

In 2020, Uzbekneftegaz plans to come up with another five proposals of co-operation, according to Sidikov.

Although Sidikov was unable to name all the potential partners, he said the company is in talks with an alliance of UK supermajor BP and Azeri state oil producer Socar, France’s Total, Russia’s Rosneft and Novatek, and Mubadala of the United Arab Emirates.

Sidikov acknowledged all new contracts will come with a commitment to sell gas output to state gas pipeline operator Uztransgaz, created earlier this year as the result of the ongoing restructuring of the country’s oil and gas industry.

“We cannot allow international operators to export their gas themselves”, he said. Granting them such an option could take the internal rate of return (IRR) of their project in Uzbekistan to the level of 60%, which is “unacceptable to us”, Sidikov added.

Uztransgaz is thus expected to offer a lower price for gas to new operators that will bring down the expected level of returns on their gas developments to between 11% and 16%.

Sidikov said that the decision to involve Uztransgaz as a single gas offtaker has yet to be discussed in detail with Uzbekneftegaz’ potential partners.

Today, Uztransgaz buys all gas output of Uzbekneftegaz and some of its joint ventures to deliver and sell it domestically and for export destinations.

However, the second-largest gas producer in Uzbekistan, Russia's Lukoil, is permitted to export its gas independently according to its production sharing agreement with the government.