OREANDA-NEWS. On July 28, 2008 Uzbekneftegaz national holding company and Malaysian PETRONAS Carigali Overseas Sdn. Bhd. concluded an agreement on holding of geological exploration in Surkhan investment block in Surkhandaryo province, Uzbekistan.

Uzbekneftegaz informed that the signed document ensures within three years 2D geology surveys on the territory of 1200 sq. km., gravity and magnetic surveys, drilling of a prospecting hole, and presenting of geophysical and geological assessment reports.

The holding and the Malaysian company has signed another one agreement on joint examination of Baisun investment block in Surkhandaryo province. Within this document the parties have already finished 2D and 3D seismic investigations, are testing wells at Gadjak deposit and interpreting obtained data.

We should note that Uzbekistan and the foreign investor have concluded an agreement on operation, on core concepts and regulations of a survey’s production sharing agreement, on deposit development and production of hydrocarbons at Baisun investment block.

For the implementation of the projects foreign investor has registered two enterprises in Uzbekistan – PETRONAS Carigali (Baisun) Operating Company LLC and PETRONAS Carigali (Surkhanski) Operating Company LLC running business on profitless/breakeven basis. After the foreign investor to execute the agreement the parties will talk to conclude a production sharing agreement (PSA).

According to the Resolution of the President of the Republic of Uzbekistan, the Malaysian company, the operators it founded, foreign contractors and subcontractors, who are carrying out prospecting of hydrocarbon fields within the implementation of the above-stated agreements, exercises the privileges and the tariff preferences afforded by the Decree of the head of the state “On measures to attract direct foreign investments into prospecting and oil and gas extraction”.

They provide foreign companies with exclusive right to conducting in certain territory of search and surveys with the subsequent development of any of the revealed fields by creation of a joint venture or under concession, and also the right to property and unobstructed export of a part of the mined hydrocarbons and their products on the toll basis.

Besides, the foreign companies, which are carrying out search and survey works, and involved foreign contractors and subcontractors are released from all taxes, deductions and payments, active in Uzbekistan during exploration works, and from customs payments (except charges for customs clearance) for imported equipment, materials and services necessary for conducting of search, survey and other accompanying works.