THE DEVELOPMENT AND USE OF PRODUCTION SHARING AGREEMENT LAW IN UZBEKISTAN OIL AND GAS

Michael P. BARRY


Michael P. Barry, PhD., J.D., Asst. Professor of Economics, Mount Saint Marys University (Emmitsburg, Maryland, U.S.A.)


Uzbekistans probable natural gas reserves are approximately 5.1-6.25 trillion cubic meters, with commercial reserves of about 1.62 trillion cubic meters, making Uzbekistan the worlds 10th largest natural gas producer. Commercial gas reserves in Uzbekistan are double those located in Britain, which is Europes largest gas producer, and the Uzbek national holding company Uzbekneftegaz claims the country has developed less than 23% of its gas resources. Given these natural advantages, Uzbek authorities have been working hard to attract foreign investors into exploration and production in Uzbekistan. Efforts include a much publicized April 2000 Oil And Gas Investments Decree intended to promote Uzbek oil and gas, and the December 2001 introduction of a production sharing agreement (PSA) law. This article will put these efforts into context by examining the Uzbek hydrocarbon industry. This will then be followed by a detailed analysis of the development of a PSA regime in Uzbekistan, provisions of the law, problems with the law, and the limited-to-modest success it has had in attracting foreign investment into


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