Boston, MA -- (SBWIRE) -- 08/22/2012 -- BMI View: Conventional gas deposits should enable the country to boost its output and exports, with some surplus gas destined for a Sasol-operated GTL scheme. Oil volumes may depend, however, on the utilisation of shale deposits and in this area the outlook is far less certain.

The main trends and developments in Uzbekistan's oil & gas sector are:

- Uzbekistan has an estimated 340bn barrels (bbl) of oil shale deposits and Uzbekneftegaz plans to establish a US$600mn joint venture (JV) project that will convert the oil shale into petroleum products. Production is due to start by 2013, with an annual capacity of 1mn tonnes of liquid hydrocarbons.
- With no early success having been registered in enhanced recovery, shale-based production and/or new field development, we believe crude oil supply - including lease condensate - will decline from an estimated 60,000 barrels-a-day (b/d) in 2011 to 54,240b/d by 2016 and 49,020 b/d by end-2021. However, the delivery of additional gas liquids volumes, thanks to higher gas output, should more than compensate, pushing total liquids output back up to 118,000b/d in 2016 and 126,000b/d in 2021.
- In September 2011, South Africa's Sasol signed an investment agreement with Petronas, Uzbekneftegaz and the Uzbek government for the development and implementation of a 30,000b/d gas-to-liquids (GTL) project in Uzbekistan. It is estimated that the total cost of the scheme will be around US$2.5bn.
- Our forecasts assume that gas output will increase from an estimated 65bn cubic metres (bcm) in 2011 to around 86bcm by 2016 and 105bcm by 2021, with growth continuing beyond that point as new fields enter production. Domestic demand is expected to rise from an estimated 47bcm to 60bcm over our 10-year forecast period, meaning that exports will reach just over 45bcm by 2021. Risk appears to be to the upside in terms of output, thanks to the combined efforts of domestic and international companies, plus infrastructure expansion and rising regional demand for Uzbek gas.
- Rising oil import costs are a growing concern. Uzbekistan paid an estimated US$1.65bn in 2011 for net imports, with this due to rise to US$5.81bn by 2021. Gas export revenues generated in 2021 are forecasted to come in at US$21.73bn. In terms of combined oil and gas revenues, we see the 2021 total standing at US$15.91bn, against an estimated US$8.05bn in 2011.

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