Petronas To Compensate Uzbekistan Over PSA

The Malaysian company Petronas Carigali Overseas Sdn.Bhd. will pay $50 million in compensation to Uzbekistan for expenses incurred in the Urga, Kuanysh and Akchalaksk production sharing agreements, UzDaily.uz has reported. Uzbekistan Prime Minister Shavkat Mirziyaev signed a cabinet resolution on the matter.
The PSAs between Petronas Carigali Overseas Sdn.Bhd and Uzbekistan covering fields in Urga, Kuanysh and Akchalaksk stipulate regular compensation to be paid by the foreign investor in the amount of $50 million.
According to the cabinet resolution, 50 percent of the expenses covered by the foreign investor in the PSA are to be paid to the Uzbekistan treasury. Uzbekneftegaz will receive the second tranche to allocate on developing the oil and gas industry in the country under an agreement with the Economy and Finance ministries
Uzbekneftegaz and Petronas Carigali Overseas Sdn.Bhd signed a PSA on May 13, 2008 covering fields in Urga, Kuanysh and Akchalaksk.
Preliminary assessments place the total of hydrocarbon resources in these fields at 700 million cubic meters. The Malaysian company plans to invest about $450 million in the project, with $100 million to be spent in 2010.