Uzbekneftegaz, CNPC begin drilling at Mingbulak

13 July 2017, Week 27, Issue 939

State-owned firms Uzbekneftegaz and China National Petroleum Corp. (CNPC) have started drilling a new exploration well at the Mingbulak oilfield in eastern Uzbekistan nearly a decade after agreeing a tie-up on further development of the site.

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On July 6, the Uzbek firm said that Mingbulakneft, its joint venture with CNPC, had recently begun exploratory drilling at the field in the Fergana Valley. Chinese firm Xibu Drilling Engineering is acting as the drilling contractor at the site, which is expected to see around 200,000 tonnes (4,000 bpd) of crude production per year.

The two partners are aiming eventually to sink a further three exploration wells and repair four existing wells at the Mingbulak field. The project's terms agreed with the government in Tashkent allow for exploration and development work to continue until 2035. The field is estimated to hold recoverable hydrocarbon reserves of 2 million tonnes (14.3 million barrels), most of which is oil.

CNPC and Uzbekneftegaz first linked arms to develop the Mingbulak field in 2008, setting up Mingbulakneft on a parity basis. Between 2010 and 2014, the state-owned Chinese firm had been expected to commit US$211.7 million to the project but work was suspended because of the fall in oil prices. Only 10% of the original sum committed by CNPC has been invested so far.

In 2017, Chinese banks will provide a loan of US$15 million to the project. The funds will be invested in drilling the latest exploration as well as repairing administrative buildings and other infrastructure, which have fallen into disrepair since CNPC and Uzbekneftegaz agreed terms in 2008. Xibu Drilling Engineering has set up temporary facilities to support current drilling operations.

Uzbek President Shavkat Mirziyoyev visited the Mingbulak site last week, highlighting the project's inclusion in a list of major investment targets for 2017. The government has designated the play an important attempt to assess the Fergana Valley's long-term oil potential.

In March 1992, shortly after its discovery, the Mingbulak field was the scene of Uzbekistan's worst oil spill after a blowout at a production well released up to 150,000 bpd of crude. The oil later caught fire and burned for two months before the well ran dry. A total of around 2 million barrels (280,000 tonnes) of crude were released during the disaster.

Joseph Murphy

Edited by

Joseph Murphy

Editor

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