The President Shavkat Mirziyoyev signed the decree approving the common terms for the production sharing agreement (PSA) between Uzbekistan and Gazprom EP International V.V. (a subsidiary of Gazprom) for the development of the Djel field, Norma.uz said.

The decree noted that the PSA provides for a maximum level of cost production at 75%, an income tax rate of 12%, an annual interest rate for the unrecovered part of the investor’s costs to be reimbursed - 8%. Royalties in the range from 0% at a price of less than $ 125 per 1000 cubic meters to 30% at a price of more than $ 170 shall apply in the event of a natural gas market change during the period of the PSA.

The agreement also provides for the revision of some of its technical and economic parameters with the fixed parity sharing of profitable products when developing the feasibility study and maintaining the investor’s internal rate of return (IRR), the document noted.

Gazprom EP International and Uzbekistan signed a PSA on a Djel field development project in October 2018. The term of the agreement is 25 years. The company plans to start gas production at the Djel field in 2021. Annual gas production at the field will reach 150 million cubic meters during 2021-2024 reaching 300 million cubic meters as of 2025.

The project estimated cost is 200 million dollars. The Djel field was discovered in 2009 on the Shakhpakhti block. Its reserves are 6.4 BCM of gas and 76 thousand tons of condensate.

In 2002, Gazprom and Uzbekneftegaz signed a strategic cooperation agreement, which provides for Gazprom’s participation in natural gas production projects in Uzbekistan under PSA terms. Since 2004, Gazprom, under the PSA terms has been involved in the restoration of gas production at the Shakhpakhty field.