Analysis: Power Problems And Protests Plague Uzbekistan

It’s been a tough winter in Uzbekistan thus far with unusually cold temperatures and heavy snow that put the country’s aging energy infrastructure to the test. It failed,…

It’s been a tough winter in Uzbekistan thus far with unusually cold temperatures and heavy snow that put the country’s aging energy infrastructure to the test.

It failed, resulting in an unusual number of protests by cold people living in dark homes who have heard government excuses for power outages for too many years.

The Protests

On January 21, amid a heavy snowstorm, the lights went out in parts of six of Uzbekistan’s 12 provinces.

For those in the Khorezm, Navoi, Bukhara, Kashkadarya, Syrdarya, and Andijon provinces who were affected, it was hardly a surprise.

The Uzbek Energy Ministry had warned on November 1 that natural-gas rationing would be necessary for some industries but for those in Uzbekistan who over many years had grown accustomed to winter electricity and gas problems, it was a sign that there were tough times on the horizon.

On November 20, 2020, more than 50 people in the Gusar district of Kashkadarya Province gathered outside the office of the local electricity and gas provider, demanding to know when power would be restored in the homes.

Similar scenes were replayed in late November in districts in the Andijon, Namangan, and Ferghana provinces where people vented their frustration at the loss of heat and electricity to city and provincial officials.

But they received the grim message that more outages would be forthcoming and it would be smart of them to stock up on coal and firewood.

By that time the media — including several local outlets — were already reporting on short supplies of coal and firewood. Such reports drowned out the official assurances that there would be ample stocks of both and that gas canisters would be abundantly available to the public.

Those local media outlets were then warned by government officials who oversee the media that they should stop reporting on the cold weather and angry responses from citizens.

But Uzbekistan’s people did not need to read about cold weather and power outages or watch reports about it on television. They were well aware of the problems they were experiencing firsthand.

On December 9, 2020, crowds of people in two districts (Bukhara and Karakul) in the western Bukhara Province blocked the main roads in their areas, demanding gas be restored to their homes.

Local gas distribution in Uzbekistan

Local gas distribution in Uzbekistan

In the eastern city of Andijon the next day, residents blocked the road to protest the suspension of gas supplies to their homes.

It was only the beginning.

Residents of the Muzrabay district in Syrhandarya Province blocked part of the road in the area on December 27 and burned tires by the side of the road to protest a gas cut-off in their area.

A group of women in the city of Jizzakh blocked the road on January 11 to demand the restoration of gas and electricity to their homes.

By coincidence, President Shavkat Mirziyoev was visiting the area that day, though it appears he did not cross paths with the protesters.

The Oxus Society website has a tracker that lists the areas in Uzbekistan where there have been protests over problems with utilities since November 2020, showing, for example, that there have been four protests over the suspension of electricity and gas in Andijon alone since November 18.

Protests over the suspension of gas and electricity supplies are nothing new in the winter in Uzbekistan. There are usually a few almost every winter.

In most cases, gas and electricity are restored within a few days and often officials offer up gas canisters or discounted coal and firewood to help see people through the days without electricity and gas.

But the problem is worse this year and the number of protests has already been far more than usual for an Uzbek winter.

And there is a spillover effect.

Blocking roads has proven an effective way to obtain quick, if not lasting, solutions to the problems of power outages and others have been using the same tactic to get concessions for their grievances.

On December 17, 2020, a group of women in the western city of Nukus blocked the road to protest unpaid salaries.

On January 10, workers at the oil refinery in Ferghana started a protest against planned cuts to the workforce that included blocking the road. It lasted for more than a week.

Three days later, residents of the Buyuk Turon neighborhood in the southern city of Karshi blocked the road to protest plans to cut down trees in the area.

Added to that are the economic losses.

A report from November 23, 2020, noted that in the Yakkabagh district of Kashkadarya Province some 6,000 chickens had died during the three days electricity was cut off, and in Samarkand Province, greenhouses were left without power and vegetables grown there for the winter had died.

At the start of December 2020, UzDaily.com reported low gas pressure had halted the operations at two cement factories — Kuvasaycement and Akhangarancement — the latter claiming on its website to be “the largest cement producer” in Uzbekistan.

The UzDaily.com report offered a cause-and-effect explanation for the suspension of operations.

An oil refinery in Uzbekistan's Ferghana region

An oil refinery in Uzbekistan’s Ferghana region

“A decrease in the ambient temperature below zero led to an increase in gas consumption by the population, which in turn affected a decrease in the pressure of gas supplied to cement producers,” it claimed.

The electricity shortages have caused another problem.

Due to the coronavirus pandemic, many schools in Uzbekistan switched to online teaching. But without reliable supplies of electricity, once the winter break ended, children at many of the approximately 10,000 schools in Uzbekistan were forced to return to the classrooms that are inadequately heated by coal and firewood.

And of course the use of coal to heat homes is taking its toll.

RFE/RL’s Uzbek Service, known locally as Ozodlik, said that as of January 16, at least 106 people had died of carbon monoxide poisoning and another 190 had to be taken to hospitals after breathing the noxious fumes.

The Power Problem

On February 6, 2020, Uzbek President Shavkat Mirziyoev held a meeting with officials from the oil and gas sector and representatives of the Energy Ministry to discuss plans for the year.

Mirziyoev told them: “Last year [in 2019], there was a lot of talk about shortcomings in the oil and gas sector. Either we help the leadership of the sector and pull it out of the swamp or it will drag our economy down and ruin all our plans for economic recovery.”

Mirziyoev ordered the Energy Ministry to ensure there was enough gas to meet the needs of the population and industry by producing an additional 4.3 billion cubic meters (bcm) for domestic use in 2020.

Months later, on December 16, as the energy crisis deepened, Mirziyoev said more than 1,000 areas in Uzbekistan were seeing reduced deliveries of gas and the country needed an extra 20 million cubic meters of gas daily to meet its needs. He ordered gas exports to be slashed so that the gas could be redirected for domestic use.

It was actually a meaningless statement.

Figures released in late January 2021 showed Uzbekistan’s gas exports had fallen dramatically in 2020. In 2019, Uzbekistan sold 7.6 bcm of gas to Russia’s Gazprom but, in the first nine months of 2020, Uzbekistan sold just 20 million cubic meters of gas to Gazprom.

In March 2020, China announced a force majeure on gas imports carried by pipeline and Uzbekistan’s gas exports to China, which Uzbekneftegaz said were 10 bcm in 2019 fell in 2020 by nearly 70 percent.

Uzbekistan’s gas exports in 2019 brought in some $2.2 billion, but in 2020 that figure fell to some $478.1 million.

At the same time, Uzbekistan’s gas imports more than doubled in 2020 with the country paying some $50.4 million for it.

In November 2020, it was reported that Uzbekistan planned to import some 18 million kWh of electricity from Turkmenistan and 5 million kWh from Kazakhstan.

Uzbekistan’s gas production fell from 60.5 bcm in 2019 to 49.7 bcm in 2020, a drop of 17.8 percent.

To put that in perspective, according to the BP Statistical Review of Energy, that is the lowest gas production figure for Uzbekistan since 1998 when total annual output was 49.6 bcm. That was also the last time the country produced less than 50 bcm in a year until 2020.

Also according to BP, Uzbekistan’s proven gas reserves are some 1.1 trillion cubic meters, so the problem is not a lack of gas.

But part of the problem has certainly been the struggle to increase gas production.

Uzbekistan’s gas output fell steadily from 2010 until 2018 and 2019 when it jumped up toward 60 bcm. BP reported from 2008-2018 that Uzbekistan’s gas production growth rate per annum was minus 0.7 percent.

LUKoil is the largest investor in Uzbekistan’s gas sector and has been since 2004 when the Russian company signed deals with Uzbekneftegaz, some of which run through 2039.

Mirziyoev’s predecessor, first Uzbek President Islam Karimov, repeatedly said Uzbekistan was satisfied to sell its gas to Russia and it was not until after China built its first gas pipeline from Turkmenistan across Uzbekistan and Kazakhstan a little more than a decade ago that any other foreign company could get a foothold into Uzbekistan’s gas industry.

Some of the deals with LUKoil are now being criticized in Uzbekistan as being disadvantageous for the country.

Between 2007 and spring 2017, LUKoil produced 40 bcm of gas in Uzbekistan.

However, some of this gas was strictly for export. Some of it went to Russia and, starting in 2013, some of it went to China as part of the 10 bcm of gas Uzbekistan was allotted to export to China via the pipeline network running from Turkmenistan.

Much of that gas was produced at the Kandym-Khauzak-Shady group of fields in Uzbekistan’s Bukhara Province. Under the terms of the 2004 deal, LUKoil owns 90 percent of that project and Uzbekneftegaz the remaining 10 percent.

On March 5, 2019, Russia’s TASS news agency reported that Uzbekistan owed LUKoil $600 million for gas. LUKoil said some of the gas it produced in Uzbekistan that was intended for export was used instead for Uzbekistan’s domestic needs.

The Russian company assured officials that Uzbekistan’s domestic market would continue to annually receive some 5 bcm of the gas LUKoil produced in Uzbekistan at a discount of 12.5 percent the usual cost of export gas.

Uzbekneftegaz chief Bahodirjon Sidikov said in an interview in June 2019 that the diversion of the gas for Uzbekistan’s domestic needs was necessary.

“It was connected to the increased demand for natural gas both from the population and also from the new enterprises that are being created today as part of the development of our state,” he said.

LUKoil produced some 14 bcm in Uzbekistan in 2019, but reduced gas production in Uzbekistan by some 40 percent after February 2020 in connection with the drastic reduction in exports to China. Levels did not return to normal until almost the end of 2020.

So when President Mirziyoev orders an increase in gas production, that does not mean all the companies extracting gas in Uzbekistan are obliged to heed his demands.

Pipes And Powerlines Past Their Prime

Alisher Sultanov is Uzbekistan’s current energy minister and a former head of Uzbekneftegaz.

In late November 2020, he gave a lengthy video interview in which he bemoaned the lack of attention the state had paid to Uzbekneftegaz for decades.

“When I became deputy chairman of Uzbekneftegaz in 2013, one of the deputies there at that time showed me a presentation that claimed by 2017 Uzbekneftegaz would be bankrupt,” Sultanov said. “The balance sheet is approved every year. Every year, a balance was drawn up for the oil and gas industry with falling production; that is, deliberately falling production was already provided for in the balance.”

While noting the situation had changed for the better since Mirziyoev took over as Uzbekistan’s leader in late 2016, Sultanov also said no money had been allotted for exploration, so the country was left dependent on existing fields and the work of the few foreign companies contracted to carry out surveying work to find new sources of gas for Uzbekistan’s future.

Sultanov said that “Nothing has been invested [from the state] in the oil, gas, and power industries in the last 30 years.”

But that has actually started to change.

On April 4, 2020, the presidential resolution “On Priority Measures to Improve the Financial Stability of the Oil and Gas Industry” was adopted that envisions Uzbekistan attracting some $650 million in credits.

In November 2020, a subsidy of 400 billion soms (about $38 million) from the Finance Ministry’s anticrisis fund was approved for Uzbekneftegaz, though not without some criticism from parliamentary deputy Doniyor Ganiev, who questioned why a subsidy, rather than a loan, should be made to an entity that oversees what should be one of the most lucrative sectors of the economy.

Ganiev is from the Liberal Democratic Party of Uzbekistan, which has won the most seats in parliament since its debut as a party in the 2004 elections and is also the party which nominated Karimov and later President Mirziyoev as its candidate in every presidential election since 2007. So his criticism is difficult to brush aside as it probably is supported by someone high up in government.

On January 13, Ganiev called for Energy Ministry Sultanov to be sacked.

The Future

The low pressure in gas pipelines and blown transformers on electric power lines are symptoms of a power infrastructure that is badly in need of overhaul and modernization.

Uzbekistan has been receiving aid for many years from international organizations towards these goals, which raises the question as to why the country finds itself in its current predicament.

Uzbekistan also needs to open up new gas fields on the terms that are more beneficial to the country.

As recently as May 2017, Uzbekneftegaz was saying it would secure investments of some $30.4 billion for the gas and oil sector by 2021 and would double production, adding a further 53.5 bcm to the country’s annual output.

Now that 2021 has arrived, it seems neither of those goals is possible anytime soon.

Uzbekistan has been implementing plans for greener sources of energy, as Mirziyoev promised in 2017, and the first wind farms, solar power plants, and new hydropower plants have already began operating, though many more are needed to meet the needs of the country’s some 35 million people.

With Mirziyoev as leader, Uzbekistan has embarked on a regional policy that aims to bring the Central Asian countries and Afghanistan closer together.

Despite Uzbekistan’s drastic drop in gas production, the country was still able to export small amounts to neighbors Kyrgyzstan and Tajikistan in 2020, and despite Uzbekistan’s electricity problem, the country was still able to export electricity to Afghanistan.

Uzbekistan was the hub for the Soviet-era unified energy grid. At a meeting in Tashkent of energy ministers from nine Central and West Asian countries in September 2019 to discuss a common energy strategy under the aegis of the Asian Development Bank’s CAREC program, Uzbek representatives proposed Tashkent as the center for regional gas distribution.

Confidence in Tashkent’s ability to perform that role no doubt suffered a setback when an “unplanned” shutdown of power transmission lines occurred in Uzbekistan on January 5, which not only cut power by about half to at least five power plants in Uzbekistan, but also affected the unified grid, reducing electricity to areas in southern Kazakhstan and in Kyrgyzstan.

It now appears Mirziyoev’s call to pull the energy sector “out of the swamp” will require a lot more effort than was believed just one year ago. It is likely the people protesting this winter will be blocking roads again next winter.


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