Uzbekistan and Azerbaijan have officially launched the Ustyurt Operating Company, a new joint entity created to implement the Production Sharing Agreement (PSA) for the Ustyurt region. The opening ceremony took place today in Tashkent.
Uzbekneftegaz, the Uzbek state energy company, told Report that the launch marks a major step forward in advancing bilateral energy cooperation and strengthening the strategic partnership between the two countries.
According to the company, the opening of the Ustyurt Operating Company signals the transition of the project into its active phase.
“In a short period, the PSA received full approval, the operating company was established and registered, professional teams were formed, and all necessary permits were obtained. Preparations are now underway for field-based geological exploration,” Uzbekneftegaz said.
The new company will play a key role in expanding Uzbekistan’s resource base, improving the efficiency of geological exploration, and enhancing the country’s long-term energy security. Its priorities include deploying modern technologies, increasing production capacity, and supporting sustainable sector development.
“This project creates a solid foundation for expanding interstate cooperation. The new management and cooperation mechanisms formed within this initiative will serve the interests of both countries. The opening of the office strengthens the institutional framework of the partnership and creates favorable conditions for the successful implementation of the next stages,” the company added.
The PSA between Uzbekistan’s Ministry of Energy, SOCAR, and Uzbekneftegaz was signed on July 24, 2025. It includes geological exploration and subsequent hydrocarbon production across six investment blocks in the Ustyurt region: Boyterak, Terengquduk, Birgori, Kharoy, Karakalpak, and Kulboy. SOCAR will serve as the operator during the exploration phase.
Under the agreement, at least one exploration well will be drilled during the initial five-year period, alongside 3D seismic surveys covering no less than 1,000 square kilometers.
Forecasts suggest the Ustyurt blocks could contain up to 100 million tons of oil and 35 billion cubic meters of natural gas. Once operational, the project could enable annual production of up to 5 million tons of oil. Total investment is estimated at $2 billion.
Uzbekneftegaz Chairman Bahodirjon Sidikov earlier told Report that exploratory work on the Ustyurt investment blocks is scheduled to begin in the first quarter of 2026.
