State retains shares of Fergana Oil Refinery as Saneg fails to make full payment
Saneg, the main oil-extracting company in Uzbekistan, is on track to take control of equipment at Uzbekneftegaz oil fields as part of the government’s investment program for the second quarter of 2024. The privatization deal, which also includes the UNG Petro network of gas stations and the Chinaz oil refinery, is valued at a total of $70 million.
The transition of control over the network of gas stations and the Chinaz Oil Refinery has already been completed by the Petroleum Technology Group. The next step involves Saneg acquiring ownership of the equipment at the oil fields.
Two years ago, Saneg acquired 41.5% of the shares in the Fergana Oil Refinery in a deal worth $100 million. However, the State Asset Management Agency (SAMA) still holds a controlling stake of 58.5% in the refinery as Saneg has not yet completed the full payment.
SAMA stated that shares will be transferred based on the portion of the purchase price that has been paid. Once the full payment is made and all contract terms are met, the shares will be fully transferred to Saneg. The agency did not specify a deadline for the completion of the full payment.
As part of the agreement, Saneg is obligated to increase the production of modern, eco-friendly gasoline, diesel fuel meeting Euro-5 standards, Jet-A1 aviation fuel, and liquefied natural gas through the refinery’s modernization. Additionally, they are required to upgrade oil units and boost production capacity by at least 2 million tons, with an investment of over $380 million for these purposes.
The exact details of the privatization process, the object of privatization, and the value of the contract remain unclear. However, this move marks a significant step towards the further development and modernization of the oil industry in Uzbekistan.
