BP Enters Uzbekistan's Oil and Gas Sector via Farm-In Agreement

UK supermajor BP has acquired a 40% participating interest in a production sharing agreement (PSA) covering six exploration blocks in Uzbekistan's North Ustyurt region. This marks BP's first entry into the Central Asian nation. The deal involves a farm-in to a project previously operated by Azerbaijan's state-owned Socar, which will reduce its stake from 40% to 30%, alongside Uzbekistan's state-run Uzbekneftegaz, which will also decrease its share from 40% to 30%. Socar will remain the operator of the project, leveraging its long-term partnership with BP in Azerbaijan, including major projects like the Azeri-Chirag-Guneshli oilfield and Shah Deniz gas deposit.

Project Status and Strategic Context

The North Ustyurt project is currently in its initial phase, with Socar conducting seismic activities. BP's entry aligns with its strategy reset announced last year, which refocused the company on its core oil and gas upstream business. BP's regional president for Azerbaijan, Georgia, and Turkey, Giovanni Cristofoli, stated that Uzbekistan holds significant resource potential and that the partnership aims to support the exploration and development of the country's oil and gas resources, delivering long-term benefits to the region.

Uzbekistan's Energy Reforms and Government Engagement

Uzbekistan has been working to reverse the decline in domestic hydrocarbon production that followed the 1991 dissolution of the Soviet Union, which led to rising imports of natural gas, oil, and fuels amid rapid population and economic growth. Since his election in December 2016, President Shavkat Mirziyoyev has ordered reforms to the oil and gas sector, including reducing the state monopoly and attracting major international energy companies. To commemorate the BP deal, Mirziyoyev met with Socar president Rovshan Najaf, BP executive vice president Ariel Flores, and BP's Cristofoli.

Details of the PSA and Blocks

The PSA for the six Uzbek blocks was originally signed in July 2025 between Socar, Uzbekneftegaz, and the Uzbek energy ministry. The blocks—Boyterak, Terengquduq, Birqori, Kharoy, Qoraqalpoq, and Qulboy—are located within the Ustyurt Plateau, a large desert area spanning southwest Kazakhstan and northwest Uzbekistan believed to contain commercial oil and gas resources. In April, BP also partnered with Kazakhstan's KazMunayGaz to assess joint exploration opportunities on the Kazakh side of the plateau.

Historical Context and Regional Collaboration

Previous exploration of Uzbekistan's sector of the Ustyurt Plateau led to several oil and gas finds, though many discoveries never matured into commercial projects. The largest recent project was the Shakhpakhty gas field re-development, operated by Russia's Gazprom from 2004 to 2025, while Uzbekneftegaz operates the producing Nizhny Surgil gas field in the east, where production began in 2018. BP has closely worked with Socar for over 30 years to develop Azerbaijan's oil and gas resources, and BP's vice president for the Caspian region, Bakhtiyar Aslanbayli, indicated the company intends to continue collaborating with Socar on new areas of partnership in the region and worldwide.