China Eximbank provides $177.6 million preferential buyer’s credit to UzbekNefteGaz for acquisition of oil rig equipment

On April 6, 2007, China Eximbank and UzbekNefteGaz — a state-owned oil and gas company in Uzbekistan — signed a $177,601,952 preferential buyer’s credit (PBC) agreement for the acquisition of large-scale oil rigs, 3D seismic exploration equipment, cement trucks, and other specialized equipment. The loan carried the following terms: a 15.75-year maturity, a 5-year grace period, a 3.5% interest rate, 0.3% commitment fee, and 0.3% management fee. Its final maturity date is January 2023. The proceeds of the PBC were to be used by the borrower to finance 85% of the cost of (a) a commercial contract between Uzgeoburneftegaz (a subsidiary of Uzbekneftegaz) and China Petroleum Technology & Development Corporation, which was signed on April 6, 2007; and (b) a commercial contract between Uzgeoburneftegaz and China National Machinery Industry Corporation (for the supply of 10 cementers), which was signed on April 6, 2007. The combined monetary value of these two commercial contracts was $209.1 million. The remaining commercial contract costs ($31.5 million) that were not covered by the PBC were to be directly funded by Uzbekneftegaz. In September 2009, China Petroleum Technology & Development Corporation and China National Machinery Industry Corporation (SINOMACH) successfully delivered 23 drilling rigs, four cranes, and 10 cementing units (collectively worth $209.1 million).

Additional details

1. The Russian project title is Оснащение предприятий НХК «Узбекнефтегаз» буровыми установками и сейсморазведочными комплексами 3Д. 2. The consolidated financial statements of JSC “Uzbekneftegaz”, which can be accessed in their entirety via https://www.dropbox.com/s/ns0xcdtkfpin07x/21ef5dee9dfe4403a789c52c07e422f8.pdf?dl=0, identify the face value of the PBC as $172 million. This issue warrants further investigation. 3. This China Eximbank loan is not included in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020.

Number of official sources

7

Number of total sources

12