Uzbekistan to take its largest gas producer public

Uzbekistan President Shavkat Mirziyoyev has ordered the nation’s largest gasoline producer Uzbekneftegaz to arrange for an preliminary public providing (IPO) on a global inventory alternate because the nation braces for a brand new spherical of financial reforms.

In response to a decree revealed on the finish of the final week, the state is able to half with the 49% shareholding within the firm, however will preserve the remaining 51% curiosity and management over main choices in Uzbekneftegaz.

The doc doesn’t present a deadline for the IPO, nonetheless, saying solely that preparations for the location ought to begin from 1 Might and be accomplished earlier than the top of this 12 months.

Uzbekneftegaz’ IPO had been repeatedly mentioned in Tashkent however progress is believed to have been placed on maintain at first of 2020 because the Uzbek financial system and its companies took a significant hit from the Covid-19 pandemic.

Regardless of a foray into photo voltaic and wind energy over the past three years, authorities in Tashkent nonetheless imagine that nation’s huge gasoline reserves might have a big upside.

Demand for gasoline as gas for energy era and for automobiles at house, and exports to China are anticipated to develop.

Exports to China have in reality been curbed just lately, first due to the Covid-19 pandemic after which due to fears of that rising home costs may set off social unrest, as occurred in Kazakhstan on the finish of 2021.

In response to an earlier authorities presentation, Uzbekneftegaz is the most important gasoline producer within the nation and was liable for about 64% of the Uzbek complete output of about 54 billion cubic metres of gasoline in 2021.

In response to official knowledge, this spells a restoration from the 2020 determine of 47.1 bcm, apparently reversing an extended decline in gasoline manufacturing.

Uzbekneftegaz additionally controls Uzbekistan GTL, a contemporary gas-to-liquids facility that went into operation on the finish of 2021 and may convert as much as 3.6 Bcm of pure gasoline per 12 months into artificial fuels.

Earlier final 12 months, Uzbekneftegaz was reported to have quietly transferred virtually all its oilfields to a privately held participant Jizzakh Petroleum, since renamed to Sanoat Energetika Guruhi.

Because the end result, the corporate misplaced management over an estimated 80% of its oil manufacturing that totaled 15,500 barrels per day in 2020.

In its newest accessible consolidated monetary report, Uzbekneftegaz reported gross revenues of 11.9 trillion Uzbek Som ($1 billion) within the first half of 2021, and web earnings of just about 3.4 trillion Uzbek Som, suggesting an extra enchancment in profitability regardless of parting with its oilfields.

Between 2018 and 2020, Uzbekneftegaz’s gross revenues fluctuated between 21.5 trillion UzbekSom and 24.2 trillion Uzbek Som, in response to its monetary statements.

Nonetheless, restructuring, asset spin-offs plus the streamlining of operations on this interval led to a drastic enchancment in profitability of the enterprise.

Uzbekneftegaz reported a web lack of 2.6 trillion Uzbek Som in 2018, posted web earnings of 589 billion Uzbek Som in 2019 and 4.7 trillion Uzbek Som in 2020.

Uzbekistan has been making an attempt to win consideration from worldwide traders since 2016 when Mirziyoyev was elected president and shortly signed his first decrees on lowering the state’s monopoly over the hydrocarbon sector and different branches of the financial system.

The brand new decree apparently goals to curtail this monopoly even additional.

Along with Uzbekneftegaz, authorities are ready to half with main stakes in state service Uzbekistan Airways, energy era models, automotive producers and different state-owned corporations.

The decree says non-public investments needs to be prioritised within the nation, whereas current state-run corporations shall be disadvantaged of their monopoly standing and privileges of their respective enterprise segments.

Mirziyoyev has but to determine on a brand new vitality minister to supervise his new privatisation proposals following the resignation of lengthy serving Alisher Sultanov from the put up earlier final week, in response to native press reviews in Tashkent.