Tashkent, Uzbekistan (UzDaily.com) — The Government of Uzbekistan issued a resolution “On measures to implement the state share in the authorized capital of Ferghana Oil Refinery”.
The document approves the main conditions for the sale of the state share in the authorized capital of Ferghana Oil Refinery to Trans Asia Resources (Indonesia) or its 100% subsidiary.
The government has created a working group, which will ensure the organization of the market valuation of the Ferghana refinery and will conduct an inventory of the company’s funds.
The working group will also hold talks with the investor on the state share purchase agreement in the authorized capital of the Ferghana refinery.
It is expected that an independent international appraisal company will assess the market value of the state share in the authorized capital of the plant.
Uzbekneftegaz will ensure repayment of the plant’s obligations through the proceeds from the sale of finished products, raw materials, components and revenues from the collection of receivables from the Ferghana refinery.
The investor during the first year of operation with the Ferghana refinery after acquiring the state share in the authorized capital will attract funds for the plant’s working capital of at least US$120 million for optimal capacity utilization and develop a program to modernize the gasoline and diesel plant that meets the requirements of Euro 4 and Euro -5, and lubricating oils according to the API standard of groups II and III.
After the investor transfers ownership of the Ferghana Refinery, the plant will independently determine pricing methods, including the sales price of its products, based on market conditions, focusing on local and international markets, and without any requirements for selling its own products with other intermediaries, with mandatory compliance with antitrust laws of Uzbekistan.
At a meeting on the development of the oil, gas and chemical industries held on 21 February 2019, the head of state instructed the Ferghana refinery to be transferred to investors in trust. On 10 April, a presidential resolution was passed on «Measures to modernize the Ferghana oil refinery with the attraction of foreign direct investment».
Modernization is carried out jointly with the Indonesian company RT Trans Asia Resources in three stages. This company has extensive experience in this field. The participation of a foreign company will contribute to the stable supply of the plant with raw materials, its processing according to world standards, and the output of products to the external market. In the future we plan to form a consortium of leading international companies.
This year, the plant is scheduled to attract direct investments in the amount of at least US$300 million. At the expense of these funds, work of 7 out of 11 installations now idle will be restored within two months. 7,1 thousand workplaces will be saved, 450 people will return to work.
At the same time, the supply of the plant with raw materials will double. Starting from 2020, production of high-quality diesel fuel complying with Euro-4 and Euro-5 standards will be adjusted. The cost price will decrease and the product quality will increase, due to which the export potential of the region will expand.
In general, the project until 2022 will attract investments of US$875 million. This will allow upgrading the Ferghana refinery, which is 60 years old, and the Altyaryk oil refinery, established 110 years ago, to produce export-oriented products in them.