International Journal of Law And Criminology
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VOLUME
Vol.05 Issue06 2025
PAGE NO.
27-34
10.37547/ijlc/Volume05Issue06-07
Legal Framework for Ensuring Transparency of
Production Sharing Agreements in
Uzbekistan’s Oil
and
Gas Sector: Challenges and Reform Pathways
Abdurahmonov Jahongir Umidbek o’g’li
Master’s Student at the Faculty of International Business Law, University of World Economy and Diplomacy, Tashkent, Uzbekistan
Imamova Dilfuza Ismailovna
Candidate of Legal Sciences, Associate Professor, University of World Economy and Diplomacy, Tashkent, Uzbekistan
Received:
22 April 2025;
Accepted:
18 May 2025;
Published:
20 June 2025
Abstract:
The article addresses the deficit of transparency in the contractual terms of production-sharing
agreements (PSAs) within the Republic of Uzbekistan's oil and gas sector. The research objective is to identify the
regulatory and institutional barriers that impede public access to contractual provisions and to formulate
measures for their removal. The methodology integrates doctrinal analysis, comparative-legal and normative-
value approaches, complemented by case studies of the Lukoil and CNPC agreements. The findings confirm the
imperative of legislatively mandating PSA disclosure, establishing an independent monitoring authority, and
institutionalising public engagement. Collectively, these reforms would enhance investment robustness, curtail
corruption risks, and consolidate the rule of law.
Keywords:
Production Sharing Agreements; transparency; subsoil use; institutional oversight; investor
–
state
partnership; anti-corruption; Energy Charter Treaty.
Introduction:
In recent years, the Republic of
Uzbekistan has embarked on extensive institutional
and economic reforms aimed at enhancing the
investment attractiveness of key industries, including
the oil and gas sector. Against the backdrop of global
fluctuations in energy prices and increasing demands
for sustainable resource management, the country is
striving to implement modern legal frameworks that
harmonise state and private investor interests. One key
tool in this effort is the production sharing agreement
(PSA), which merges the public law authority of the
state with the commercial provisions of a private
contract.
The significance of the topic under consideration is
attributable to several factors. Firstly, Uzbekistan has
ratified the Energy Charter Treaty, thereby committing
itself to providing fair and non-discriminatory
treatment to foreign investors in the energy sector.
Secondly, the International Extractive Industries
Transparency Initiative (EITI) advocates for the
compulsory disclosure of contracts within the
extractive industries, along with the publication of
financial flows and data pertaining to beneficiaries. In
spite of public declarations affirming adherence to
these standards, the practice of negotiating and
executing Production Sharing Agreements (PSAs) in
Uzbekistan is characterised by a limited degree of
transparency; the texts of contracts are not fully
published, there exists no systematic registry of PSAs,
and both the public and parliament are devoid of
effective oversight instruments.
The number of PSAs in the Uzbek subsoil use is
increasing; estimates suggest that over 30% of
hydrocarbon production in 2024 will occur under these
agreements. However, there is a significant absence of
clear information regarding essential production
distribution parameters, the processes for investor cost
recovery, and the mechanisms for resolving disputes.
Consequently, legal ambiguity and information
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discrepancies foster a conducive atmosphere for
corruption risks, erode trust in state institutions, and
obstruct long-term strategic planning.
The objective of this study is to conduct a
comprehensive analysis of the issue pertaining to the
lack of transparency in the conditions of Public Service
Agreements (PSA) within the Republic of Uzbekistan.
Furthermore,
it
aims
to
formulate
robust
recommendations aimed at enhancing the regulatory
and institutional frameworks to foster openness,
accountability, and investment stability.
To achieve this goal, the following tasks have been
formulated:
1.
Study of the current legislation of the Republic
of Uzbekistan -
the Law “On Subsoil” (Articles 7, 10), the
Law “On Investments and Investment Activity”,
resolutions of the Cabinet of Ministers - for the
presence or absence of requirements for publicity and
access to the terms of PSAs.
2.
Comparative legal analysis of international
practices of transparency in PSAs on the examples of
Norway, Azerbaijan, Kazakhstan, Indonesia and
Mexico, including mechanisms of contract publication,
institutionalisation of independent regulators and
participation in EITI.
3.
Assessment of law enforcement practices in
Uzbekistan, using the examples of agreements with
Lukoil (Kandym field) and CNPC (Gazli-Shurtan project),
to identify risks of information asymmetry and
corruption threats.
4.
Development of a set of recommendations on
legislative amendments - introduction of mandatory
publication of PSA terms and conditions, creation of a
digital register, establishment of an independent
monitoring div and strengthening of public and
parliamentary control.
The methodological framework of the article includes:
•
Comparative legal approach, which allows
identifying universal and adaptive solutions based on
foreign experience;
•
Normative-value analysis, which assesses the
compliance of the national regime with the principles
of good governance, ESG and the rule of law;
•
A case study of key PSA projects in Uzbekistan
to empirically verify the identified problems.
The legal nature of a Production Sharing Agreement
(PSA) is that the government confers upon the investor
(project operator) the exclusive right to explore and
produce hydrocarbons on a production sharing basis.
The investor is responsible for financing the
exploration, construction, and operation phases,
subsequently receiving “compensatory production” to
recoup costs and “profitable production” according to
the shares delineated in the contract. This mechanism
is advantageous to the state as it reduces budgetary
expenditures during the initial stages of projects, and it
is also beneficial to the investor due to access to
resources and the potential for generating profit.
Unlike classical licenses, where the investor is obligated
to pay fixed royalties and taxes regardless of the
project’s outcome, and concession contracts, which
provide for the transfer of part of the property and
long-term lease payments, PSAs are oriented towards
the proportionate distribution of risks and benefits.
The constructive flexibility of PSAs makes them
attractive to investors in conditions of geological
uncertainty and high capital intensity of projects.
Nonetheless, the unique characteristics of PSAs
necessitate stringent transparency standards: the
absence of public access to contract terms and
conditions hinders independent auditing, public
discussion, and adequate parliamentary supervision.
Internationally, openness is fostered through
legislative requirements for contract publication
(Norway), the establishment of public registries
(Azerbaijan - PSA Registry, Mexico - Ronda), as well as
the institutionalisation of independent regulatory
bodies (SKK Migas in Indonesia, NPD in Norway) and
involvement in the EITI.
Thus, to overcome the transparency deficit in
Uzbekistan, it is imperative to undertake a
comprehensive reform of the legal framework and
institutional architecture. This reform should include
the legislative enshrinement of the obligation to
publish Product Sharing Agreements (PSAs), the
establishment of a digital registry, and the formation of
an independent oversight div. Furthermore, it is
essential to enhance public and parliamentary control
mechanisms. The execution of these measures will
bolster investor and public confidence, mitigate
corruption risks, and promote the advancement of a
sustainable energy sector grounded in the principles of
the rule of law.
Production Sharing Agreements (PSAs) in Uzbekistan’s
oil and gas industry play a pivotal role in the legal and
economic relationship between the government and
private investors. They aim to attract capital and
modern technology while reducing budgetary risks.
Legally, PSAs are a complex hybrid model where the
government maintains ownership of the subsoil as
public property. Simultaneously, the investor is granted
exclusive rights to conduct geological exploration and
production in a designated area, recovering their costs
and earning profits solely from a share of the extracted
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resources.
The PSA is base
d on the principle of “risk
-reward
sharing”: the investor first finances a comprehensive
range of works, from preliminary geological exploration
to the creation of infrastructure and organisation of
production, bearing all technical, financial and
marketing risks. The state only undertakes to transfer a
part of the extracted production (compensatory share)
to compensate the investor for the costs. In contrast,
the rest of the output (profit share) is distributed in
accordance with the contractually agreed proportions.
Such a concept is favourable to the state because it
allows it to attract foreign financing without incurring
direct budgetary expenditures, and to investors
because their remuneration, in the form of products,
directly depends on the project’s
real results.
The
distinction
between
Production
Sharing
Agreements (PSAs) and other modalities of subsoil
utilisation is fundamentally significant. The licensing
system conventionally requires the payment of fixed
fees and royalties, regardless of the pr
oject’s success.
This framework, in instances of unsuccessful
exploration, engenders considerable financial losses
for the investor and does not incentivise cost
optimisation. Conversely, concessions, while affording
the investor extensive rights to administer the site,
mandate the obligatory transfer of infrastructure and
fixed lease payments, thereby constraining the
flexibility of contractual terms and often failing to
accommodate the evolving realities of the market.
Furthermore, service contracts are typically predicated
on the provision of services at pre-established rates,
with the contractor not participating in the production
of the output. This arrangement culminates in a
deficiency of economic motivation for effective
management.
In the Republic of Uzbekistan, the legal framework
governing production sharing agreements has evolved
at the intersection of three significant regulatory
sources that do not constitute a unified, coherent
regulatory mechanism: firstly, the Law “On Subsoil”
(2024 edition);
secondly, the Law “On Investments and
Investment Activities” (2019); and finally, various
bylaws, including resolutions issued by the Cabinet of
Ministers and departmental directives from the
relevant ministries. This distribution of norms results in
fragmentation, as matters concerning the competitive
selection of investors, contract terms, fulfilment
guarantees, and sanctions for violations are dispersed
among different legal instruments and authorities.
Consequently,
this
fragmentation
considerably
complicates the comprehension and implementation
of the regulations for all market participants.
The Law on Subsoil enshrines the fundamental right of
the state to enter into Production Sharing Agreements
(PSAs) and establishes overarching principles governing
the use of subsoil resources. However, it is noteworthy
that there are no explicit provisions mandating the
publication of the terms of these agreements. The Law
“On Investments” guarantees the protection of
investors’ rights and the freedom to repatriate
profits;
nevertheless, it does not specifically address the issue
regarding the extent of publicity concerning the
parameters of these contracts. In accordance with the
relevant laws, particularly Resolution of the Cabinet of
Ministers № 54, on 15 March 2
002, it is necessary to
outline the procedures for the conclusion of PSAs and
the specific documents required. However, the
procedures for disclosing the texts of contracts,
minutes from tender commissions, or expert
evaluation reports are not applicable. Consequently,
while all these provisions formally establish a
framework for activities, they effectively create an
opaque environment. This contract is accessible only to
a limited group of ministry officials and investors,
rendering analyses and public oversight nearly
impossible.
A more profound issue is posed by the ambiguity
surrounding the interpretation of “commercial secret”
and “confidential information”. The provisions of the
Civil Code and the Law “On Commercial Secrets” afford
officials an excessive degree of latitude when denying
information requests under PSAs. Authorised official
bodies frequently invoke the necessity of safeguarding
the commercial interests of investors, thereby
obstructing requests from researchers and citizens. In
contrast, international standards of good governance
and commitments under the Extractive Industries
Transparency Initiative (EITI) mandate that all terms
and conditions, with the exception of those pertaining
to technological secrets, such as production sharing
parameters, payment schedules, and mechanisms for
dispute resolution, be made publicly accessible.
Institutionally, the Ministry of Investment and Industry,
the Ministry of Justice, and the State Committee for
Geology and Mineral Resources are responsible for
conducting and monitoring PSAs; however, there is no
single coordinator authorised to create and maintain a
public register. As a result, the requested data is
repeatedly sent around and around among agencies,
each of which makes its own decision on what to
consider closed and what to feel open, which creates
an insurmountable administrative barrier for any
person, even those authorised to participate in the
contract.
Practical evidence indicates that none of the
agreements concluded with Lukoil, CNPC, or Gazprom
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have been published in their entirety; only fragmented
press releases and excerpts in the reports of the Subsoil
Use Agency are available. Analysts are left to speculate
regarding the precise ratio of compensatory to profit
shares, conditions for early termination, and the
mechanisms for revising rates based on market
fluctuations. This situation not only hinders effective
budget planning, as the Financial Control Authorities
lack the necessary information to evaluate revenues,
but it also fosters an environment conducive to corrupt
practices. In the absence of public evaluation criteria,
investors may pursue benefits behind closed doors,
leaving citizens and the media to speculate on potential
preferential treatments without any means to verify
such suspicions.
Consequently, current Uzbek legislation fails to provide
clarity, transparency, and accountability within the
sphere of Production Sharing Agreements (PSAs). This
predicament
can
only
be
rectified
through
comprehensive reforms, which include the enactment
of a dedicated law on PSAs. Such legislation should
explicitly mandate the publication of contracts within a
centralised digital registry, delineate the boundaries of
commercial confidentiality, establish an independent
regulatory authority vested with the power to manage
the registry and audit the enforcement of agreements,
and institute mandatory parliamentary hearings
alongside public consultations for each significant
agreement. Global practices further illustrate that the
most successful oil and gas initiatives are executed
under the aegis of transparent PSAs, wherein contract
stipulations are subject to public scrutiny. The
Extractive Industries Transparency Initiative (EITI)
standards stipulate the obligatory publication of the
complete texts of contracts, details concerning
financial flows, and the identification of ultimate
beneficiaries. This enables civil society and expert
organisations to exercise public oversight regarding the
terms of transactions and the fulfilment of
responsibilities, diminishes corruption risks, and
enhances investor confidence. Notwithstanding the
ratification of the Energy Charter Treaty, the Uzbek
legal framework governing PSAs is devoid of explicit
provisions regarding transparency: agreements are not
accessible to the public, there exists no unified contract
registry, and the parameters of commercial secrecy are
interpreted excessively.
The Norwegian example demonstrates that the
mandatory publication of all licences and agreements,
regular reports by the Norwegian Petroleum
Directorate, and parliamentary hearings contribute to
maintaining the highest level of trust in state
institutions and enhance investment attractiveness.
Kazakhstan, an early participant in the Extractive
Industries Transparency Initiative (EITI), has published
key parameters of more than 50 Production Sharing
Agreements (PSAs), including fiscal rates, minimum
localisation obligations, and social investment
commitments. This practice has significantly aided the
country in increasing investment inflows by 20 per cent
over a span of five years and has considerably reduced
the number of corruption incidents associated with
contracting procedures.
Azerbaijan, notwithstanding political fluctuations, has
sustained the PSA Registry, wherein the texts of all
major PSAs are published. This has contributed to
establishing the confidence of international financial
institutions and enhancing the country’s credit rating.
In Indonesia, the reforms of 2012-2015 facilitated
SKK Migas in introducing an electronic e-PSC system,
which provides
a consolidation of data concerning expenditures,
allocation regimes, and the fulfilment of environmental
obligations. Following the energy reform of 2013,
Mexico established Ronda, an open portal where all
bidders and texts of signed contracts are accessible to
a broad audience, along with commentary from
industry analysts and NGOs.
In Uzbekistan, where Production Sharing Agreements
(PSAs) represent approximately one-third of the
country’s oil and gas production, the incorporation of
such
mechanisms
holds
significant
strategic
importance. The absence of a digital register and the
requirement for mandatory disclosure of contract
terms complicate budgetary planning. Consequently,
financial control bodies lack access to reliable data
regarding project revenues, necessitating that
investors depend on verbal explanations and
infrequent reports. This situation engenders legal
uncertainty and diminishes the medium-term
sustainability of investments, particularly in light of the
volatility of global energy prices.
The academic discourse concerning PSA confidentiality
in Uzbekistan is characterised by a division between
two factions. Advocates for the preservation of a
“closed” regime emphasise the importance of
safeguarding
commercial
confidentiality
and
maintaining a competitive edge in negotiations with
investors, who are apprehensive about the potential
dissemination of strategically critical information.
Conversely, a contemporary interpretation of
economic risks indicates that the public disclosure of
essential parameters, including production shares and
tax incentives, contributes to the reduction of
transaction costs, enhancement of credit ratings, and
broadening of the pool of potentially interested and
responsible investors.
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Within
the
framework
of
ESG
principles
(Environmental, Social, Governance), the transparency
of PSA terms is crucial for developing sustainable
projects.
Investors
who
prioritise
long-term
commitments to environmental protection and
regional social growth tend to steer clear of
jurisdictions with low accountability and a higher risk of
reputational damage.
The lack of proper transparency in the context of
production sharing agreements inevitably leads to a
number of serious consequences that concern not only
the efficiency of natural resource management, but
also the investment climate, fiscal sustainability and
public trust in state institutions. First of all, information
asymmetry creates favourable conditions for corrupt
practices at all stages of the PSA life cycle. When the
texts of contracts and their key parameters are hidden
from the public and experts, the possibility of non-
transparent redistribution of benefits increases: an
investor can seek favourable conditions for cost
recovery or changes in production shares “behind
closed doors
”, while officials can provide such
preferences in exchange for personal benefits.
The violation of the principle of equal access to
information compromises the transparency necessary
for enhancing the predictability of law enforcement.
Investors, who lack clear regulations and well-defined
contractual terms, incorporate substantial risks into
their financial models, resulting in elevated borrowing
costs and the potential rejection of long-term projects.
In contrast, in Norway and Mexico, where Production
Sharing Agreements (PSA) are publicly accessible,
project rates of return are comparatively lower, and
payback periods can be more accurately estimated.
Conversely, in Uzbekistan, the prevailing uncertainty
compels investors to seek higher risk premiums or to
relocate their investments to jurisdictions that exhibit
greater transparency.
In regard to the state budget, the opacity of PSAs
results in the inability to accurately forecast fiscal
revenues. Compensatory production, which serves as
the primary source of investment returns, is frequently
subjected to taxes and excise duties. However, in the
absence of dependable data concerning its volumes, it
becomes challenging to formulate tax budgets and
evaluate the effectiveness of fund utilisation. Claims
posited by proponents of confidentiality, asserting that
the disclosure of details will “undermine bargaining
power” and enable competitors to replicate more
favourable terms, do not withstand critical analysis.
Nations with transparent contract registers exhibit
enhanced discipline in honouring commitments,
thereby fortifying the fiscal revenue base and
diminishing the administrative costs associated with
the collection of payments.
The social risks associated with inadequate publicity of
Public Service Announcements (PSAs) exhibit a
significant increase. Local communities and civil society
often find themselves largely excluded from
discussions concerning the terms and conditions of
projects related to field development within their
regions. This exclusion frequently results in conflicts
and protests, delays in infrastructure construction,
litigation, and damage to the country’s international
reputation.
In
neighbouring
Kazakhstan
and
Azerbaijan,
public
hearings
and
mandatory
environmental impact assessments of contracts serve
to alleviate social tensions by providing the public with
mechanisms to influence the socio-environmental
parameters of development; however, Uzbekistan
does not possess such mechanisms.
Furthermore, the adverse effects of non-transparency
extend to the institutional framework governing the
rule of law. The ambiguity surrounding responsibility
and accountability fosters the emergence of “grey
areas” in the management of PSAS, wherein investors
and officials engage in a reciprocal exchange of blame
during
times
of
difficulty,
often
attributing
responsibility to the public for what they perceive as
“unfair” claims. Consequently, the standards of the rule
of law are diminished, and the judiciary is deprived of
precedents and actual contracts that could serve as
foundations for consistent approaches to dispute
resolution.
In addition, the lack of transparency of PSAs directly
contradicts Uzbekistan’s international obligations.
Ratification of the Energy Charter Treaty obliges the
country to ensure fair and non-discriminatory
treatment of foreign investors, including stability of
contract terms. Participation in the EITI implies
mandatory publication of contracts and payment
reports. Failure to fulfil these norms not only reduces
the confidence of international partners and financial
institutions, but also undermines Uzbekistan’s position
in Doing Business and ESG indices, which negatively
affects the cost of borrowing and the volume of long-
term investment inflows.
Current trends in international financial markets
indicate that investors are increasingly utilising ESG
valuations in their decision-making processes. For
companies committed to sustainable development and
social
responsibility,
operating
in
“shadow”
jurisdictions with non-transparent contracts is deemed
unacceptable. Consequently, the lack of transparency
in PSAs not only restricts the potential pool of partners
but also engenders long-term reputational risks that
may result in a reluctance to engage in projects,
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regardless of their economic appeal.
The ongoing academic discourse regarding the
openness and confidentiality of Production Sharing
Agreements (PSAs) in Uzbekistan requires a transition
from mere theoretical discussions to the formulation of
actionable solutions. While it is valid to consider the
safeguarding of trade secrets in relation to
technological innovations and proprietary knowledge,
fundamental aspects such as the terms governing
production sharing, fiscal responsibilities, and
environmental commitments lack intrinsic commercial
confidentiality. These factors can and ought to be made
transparent. The adoption and enactment of the
UNCITRAL Model Law, along with the compulsory
dissemination of contracts via a digital registry, would
effectively dismantle administrative obstacles. Such
measures would empower the public, investors, and
legislators to engage with accessible data, potentially
leading to a reduction in corruption, enhanced fiscal
stability, and improved public governance of natural
resources.
In order to overcome the identified systemic deficits in
the area of transparency of production sharing
agreements (PSAs), it is advisable to implement the
following comprehensive programme of regulatory and
institutional reforms, grounded in international
standards while considering the specificities of the
national legal framework.
Firstly, it is imperative to legislate the obligation to
publish all material terms of PSAs in a single digital
register accessible via the official portal of the Ministry
of Investment and Indust
ry. The Law “On Subsoil”,
which should be supplemented by a new chapter titled
“On Transparency of Production Sharing Contracts”,
must explicitly state that the text of each concluded
PSA, including annexes that provide a detailed
description of the production sharing mechanism,
schedules of compensation and profit shares, fiscal
terms, and environmental and social obligations, shall
be made public within 30 calendar days from the date
of state registration. Similar provisions should be
introduced into the
Law “On Investments and
Investment Activity” to ensure that the publicity of
contracts is synchronised with the division of
investment guarantees and the protection of investors'
rights.
Secondly,
insufficient
institutional
coordination
necessitates the establishment of an independent
entity - namely, the Subsoil Use Transparency Agency.
This agency, endowed with the status of a distinct legal
entity possessing regulatory rulemaking, audit, and
oversight powers, shall be responsible for maintaining
the PSA registry, conducting both annual and ad hoc
inspections, monitoring adherence to social and
environmental standards, and facilitating public
reporting. To guarantee its autonomy, it is imperative
that the agency is afforded budgetary independence
and is governed by a Council comprised of
representatives from civil society, parliamentary
committees, prominent universities, and international
experts from EITI and UNCITRAL.
Thirdly, in order to enhance parliamentary oversight, it
is
recommended
to
implement
mandatory
parliamentary hearings for each Production Sharing
Agreement (PSA) that exceeds a designated investment
threshold (e.g., USD 50 million). During these hearings,
representatives from the Subsoil Use Transparency
Agency, investors, and pertinent ministries are
required to present a comprehensive set of contract
documents to members of parliament. This procedure
facilitates the identification of potential excessive risks,
addresses issues of public interest, and allows for the
development of recommendations to modify the
contract terms before finalisation.
Fourthly, the proactive involvement of civil society and
expert communities should be institutionalized
through mandatory public consultations conducted
during the preparation of PSA projects. The Law
“On
Public Discussion of Draft Regulatory Acts and
Significant Projects” must be revised to include
provisions
mandating
external
environmental,
economic, and anti-corruption evaluations of all PSA
projects. This should be carried out with the
participation
of
authorised
non-governmental
organisations, the Academy of Sciences, and
independent auditing firms.
Fifthly, it is imperative that Uzbekistan formally joins
the Extractive Industries Transparency Initiative (EITI).
International practices demonstrate that participation
in the EITI not only formalises the obligations to publish
contracts and payment reports but also establishes a
platform for ongoing dialogue among the government,
corporate entities, and the public. To achieve this
objective, the government is encouraged to adopt a
Regulation on EITI Implementation at the level of a
Cabinet of Ministers Resolution, establish a National
EITI Committee, and approve a national disclosure
standard for financial and non-financial data.
In conclusion, in light of the increasing prominence of
ESG criteria within international financial markets, it
should be mandated that PSA investors submit annual
reports concerning environmental, social, and
governance indicators. These reports must include data
pertaining to greenhouse gas emissions, expenditures
for local community development, and anti-corruption
measures. Furthermore, it is essential that these
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reports be published through the digital registry of the
Subsoil Use Transparency Agency and integrated with
both national and international open data platforms.
The implementation of this program will necessitate
sustained political commitment, coordination among
ministries and oversight bodies, in addition to active
engagement from international partners. Nonetheless,
it will facilitate the removal of institutional bottlenecks
and convert Uzbekistan's PSA regime into a
transparent, accountable, and predictable mechanism
that aligns with the highest global standards for natural
resource governance, thereby fostering long-term
investment stability and promoting sustainable
development in the oil and gas sector.
In conclusion, a comprehensive analysis indicates that
the lack of requisite transparency within the
framework of Production Sharing Agreements (PSAs) in
the Republic of Uzbekistan represents a systemic
challenge, influencing the legal, institutional, and socio-
economic dimensions of the oil and gas sector’s
operations.
Firstly, normative fragmentation has been identified:
Production Sharing Agreements (PSAs) are regulated by
disparate provisions of the Subsoil Law, the Law “On
Investments and Investment Activity,” and subordinate
regulations, none of which explicitly mandate contract
disclosure or the establishment of a public registry.
Broad definitions of "commercial secrecy" in the Civil
Code and the Law “On Commercial Secrecy” serve as
formal grounds for denying access to information,
thereby contradicting Uzbekistan’s obligations under
the Energy Charter Treaty and the recommendations of
the Extractive Industries Transparency Initiative (EITI).
Secondly, institutional disintegration
—
in which the
functions of negotiating, registering, monitoring, and
auditing PSAs are allocated among the Ministry of
Investments and Industry, the Ministry of Justice, and
the State Committee for Geology
—
results in
duplication, "grey zones" of responsibility, and
numerous administrative barriers to information
access. The prevailing practice of denying data fosters
“informational asymmetry”, under which concealed
benefit redistribution schemes become virtually
uncontrollable.
Thirdly, comparative legal analysis indicates that in
nations
with
transparent
Production
Sharing
Agreement (PSA) regimes, such as Norway, Kazakhstan,
Azerbaijan, Indonesia, and Mexico, the mandatory
disclosure of contracts, the establishment of
independent
regulatory
bodies,
and
active
participation in the Extractive Industries Transparency
Initiative (EITI) serve as foundational elements for
diminishing corruption risks, enhancing fiscal discipline,
and fortifying investor confidence. These jurisdictions
cultivate a stable investment environment, wherein
public authorities and companies function as
“transparent partners," thus facilitating the attraction
of responsible investors who are committed to
Environmental, Social, and Governance (ESG) principles
and fostering long-term cooperation.
Fourthly, the adverse effects of Production Sharing
Agreements (PSA) non-transparency in Uzbekistan
manifest at multiple levels. Fiscal uncertainty impedes
budget planning and the monitoring of compensation
production revenues. The informational “black hole”
generates risks of corruption and reputational damage,
thereby diminishing the country’s appeal to
international financial institutions and investors
prioritising Environmental, Social, and Governance
(ESG) criteria. The absence of public and parliamentary
scrutiny engenders social discontent and conflicts with
local communities, resulting in project delays and
additional expenditures.
Only the execution of a comprehensive and
coordinated set of measures will empower Uzbekistan
to extricate the PSA framework from the “grey zone”
and establish a transparent, accountable, and
predictable system for the governance of strategic
natural resources. This transition will aid in fortifying
the rule of law, enhancing investment attractiveness,
and ensuring the sustainable socio-economic
development of the oil and gas sector, benefiting both
current and future generations of the nation’s citizens.
REFERENCES
I. Legal Acts and International Treaties
Law of the Republic of Uzbekistan “On Subsoil” (as
amended on 23 December 2023);
Law of the Republic of Uzbekistan “On Investments and
Investment Activities” (2019);
Resolution of the Cabinet of Ministers of the Republic
of Uzbekistan No. 54 dated 15 March 2002 “On
Measures for Improving the Procedure for the
Conclusion and Execution of Production Sharing
Agreements”;
Energy Charter Treaty (signed in Copenhagen on 17
December 1994, entered into force on 16 April 1998);
UNCITRAL Model Law on Public Procurement and
Model Law on Public
–
Private Partnerships (2011);
Extractive Industries Transparency Initiative (EITI),
Standard 2019;
II. Monographs and Academic Publications
Tordo, Silvia, John C. Adams, Vivien E. Turquoís. Oil and
Gas Production Sharing Contracts: Experience to Date.
ESMAP Report 27096, World Bank, 2011;
International Journal of Law And Criminology
34
https://theusajournals.com/index.php/ijlc
International Journal of Law And Criminology (ISSN: 2771-2214)
Parra, Francisco R. Sovereign States and International
Oil Companies: A Framework for Analysis. Oxford
University Press, 2004;
Stern, Jonathan. The Pricing of International Oil
Contracts. Oxford University Press, 2001;
UNCTAD. National Legal Frameworks for Production
Sharing Contracts and the Need for Technical
Assistance. United Nations Conference on Trade and
Development, 2006;
III. Online Resources and Reports
Extractive Industries Transparency Initiative (EITI),
“Standard
&
Requirements”,
Official Text of the Energy Charter Treaty,
https://energycharter.org/process/energy-charter-
treaty
UNCITRAL,
“Model
Laws”,
https://uncitral.un.org/model-laws;
Azerbaijan
PSA
Registry,
Norwegian Petroleum Directorate - Contract Database,
https://www.npd.no/en/facts/production-licences
SKK Migas ((Indonesia)
–
PSC Data Portal,
https://www.skkmigas.go.id/portal
Comisión Nacional de Hidrocarburos (Mexico)
–
Ronda
Portal,
World
Bank,
Doing
Business
2024,
https://www.worldbank.org/doingbusiness
