China provides $585 million to support oil and gas projects in Uzbekistan

Uzbekistan’s National Holding Company Uzbekneftegaz has reportedly discussed cooperation issues at a meeting with the Silk Road Fund in Tashkent. 

A loan agreement was reportedly signed in July and the first financial tranche was transferred in mid-October.

In the course of the talks, the sides discussed further implementation of agreements, expansion of cooperation in the energy sector and joint preparation of proposals on financing investment projects.  

Meanwhile, Chinese media reports say the Silk Road Fund inked a cooperation framework agreement with Uzbekneftegaz to support Uzbek oil and gas projects in June 2018.  

The cooperation is expected to facilitate the development of Uzbekistan's oil and gas industry. 

The Silk Road Fund is a state-owned investment fund of the Chinese government to foster increased investment in countries along the One Belt, One Road, an economic development initiative primarily covering Eurasia.  The Chinese government pledged US$40 billion for the creation of the investment fund established on December 29, 2014.  The Silk Road Fund is a limited liability company.  Its 4 shareholders are: State Administration of Foreign Exchange(65%), China Investment Corporation(15%), Export-Import Bank of China(15%) and China Development Bank (5%).   

Uzbekneftegaz is a state-owned holding company of Uzbekistan's oil and gas industry.  Uzbekneftegaz was established in May 3, 1992.  In 1998, it was transformed into national holding company.

Uzbekneftegaz leads a consortium of Korea National Oil Corporation, China National Petroleum Corporation and Lukoil exploring and developing gas condensate fields in the Aral Sea.  In addition, Uzbekneftegaz has a production sharing agreement with Gazprom on gas exploration, joint ventures with Prista Holdings on motor oil and lubricants production, and with Ariston Thermo Group on heating boilers production.