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President of Uzbekistan names reason for debt to Lukoil

June 24, 2019/ 08:23

Baku. President of Uzbekistan Shavkat Mirziyoyev, speaking to the Senate on June 21, acknowledged the country's debt to the Russian Lukoil company at $600 million, Trend reports via Uzbek media.

As reported in March by Reuters, Uzbekistan owes Lukoil for gas supplies in 2018. The company operates under a production sharing agreement (PSA) in the Kandym-Khauzak-Shady-Kungrad and South-West Gissar projects. Produced gas is supplied mainly to China.

The debt was due to the fact that Uzbekistan took part of the gas to the domestic market, although the terms of the PSA provide for the export of all the gas produced. Uzbekneftegaz refrained from commenting back then.

Mirziyoyev stated that Uzbekistan today buys gas for the domestic market from Lukoil for $146 per 1,000 cubic meters and sells to the population for $40. A 600 millionth debt formed due to the difference of $100.

The president asked why the national interests were not taken into account when drawing up the production sharing agreement.

In March 2019, Lukoil agreed with Uzbekistan to supply up to 5 billion cubic meters of gas per year from the Kandym project to the domestic market with a 12.5 percent discount to the export netback.

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