Leading Uzbek Oil and Gas Company Saneg Issues Operational Update for First Half of 2023

Sanoat Energetika Guruhi (“Saneg”), Uzbekistan’s largest private oil and gas company, issues an operational update for the first six months of 2023.

Highlights

• 305,200 tons of liquid hydrocarbons produced in the first six months of 2023, a 10.6% increase compared to the same period last year.
• 723.2 million cubic meters of gas produced, 22.5% more than in 2022.
• Average daily production of hydrocarbons amounted to 1,648 tons, which is 1.7% more than the same period 2022.
• The Fergana Oil Refinery processed 650,000 tons of crude oil, a 61% increase on the first six months of 2022.
• 502,000 tons of petroleum products sold, a 73.3% increase on 2022.
• Safety certification of more than 800 workplaces carried out.
• Saneg invested more than US$26 million implementing activities aimed at attracting young professionals and developing employees’ skills.
• The number of employees increased by 7% since the beginning of the year, to 5,031 people.

Tulkin Yusupov, Saneg’s Executive Director, said:

“Saneg’s operational improvements are matched by the significant developments we have made in creating jobs, enabling our employees to learn new skills and strengthening our company-wide commitment to safe working practices. The ongoing modernization of the Fergana Oil Refinery is enabling us to expand our refining capacity significantly, and this work is proceeding successfully alongside enhancing the capacities of our storage and distribution networks.”

Production

Saneg produced 305,200 tons of liquid hydrocarbons in the first six months of 2023, which is 10.6% higher compared to the same period last year.

Gas production amounted to 723.2 million cubic meters, which is 22.8% more than in 2022.

The average daily production of hydrocarbons amounted to 1,648 tons per day, which is 1.7% more than the first six months of 2022.

The main drivers of growth during the reporting period were the commissioning of new wells into commercial operation, as well as geological and technical measures carried out at 106 wells, including sidetracking and commissioning of previously abandoned wells.

Separately, projects were implemented to increase oil and gas production at the Chegara, Yangi Karatepa, Sharky Ispanli and Zheinov fields.

Processing

During the first six months of 2023, the volume of crude oil refining at the Fergana Oil Refinery amounted to 650,000 tons, an increase of 61% compared to the period in 2022.

In accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated February 7, 2020 No. 67 "On measures for the efficient use of the capacities of Fergana Oil Refinery LLC and the implementation of the modernization of the plant", the company continued with modernization works worth more than US$400 million.

Offtake arrangements and order book

During the reporting period, Saneg sold 502,000 tons of petroleum products, which is 73.3% higher than the first six months of 2022.

The key products supplied for the growth of Uzbekistan’s economy in the first half of 2023 were diesel fuel (more than 208,000 tons) and gasoline (more than 168,000 tons).

To ensure an uninterrupted supply of petroleum products to consumers in the Tashkent region, in April 2023 Saneg commissioned a terminal at Islam Karimov Tashkent International Airport for the storage and distribution of petroleum products. To date, more than 30,000 tons of petroleum products have been delivered through the terminal, which made it possible to supply than 40% of gas stations located in Tashkent.

Saneg is also building new gas stations throughout Uzbekistan. The commissioning of the first gas station, located in the Bustanlyk district of the Tashkent region, is scheduled to open in September 2023.

Capital investment and construction

In the first half of 2023, Saneg continued implementing programs to create new fixed assets and to maintain current assets in good condition. The volume of disbursed investments was increased by 2.5 times compared to the same period last year, and amounted to US$78 million.

As part of implementing the "Capital Construction of Fixed Assets" program in the first half of this year, 24 km of oil pipelines were extended, 17 oil wells put into operation and a complex of three steam generators was installed at the Boston oil field to increase the production of hard-to-recover oil.

In addition, in the Mubarek and Andijan regions, 148 km of gas pipelines were extended and 18 gas wells put into operation.

To transport gas with the required pressure to consumers, modular compressor units (MCU) were built at the North Shurtan and Chuvama fields. Construction of another 9 MCUs is underway at other fields with low-pressure gas.

In addition, as part of the promotion of natural gas production, capital construction of facilities at the Western Aral field is underway. This work comprises a 180 km gas pipeline and a primary gas treatment unit.