CAPITAL: Bishkek

MONETARY UNIT: Som

REFINING CAPACITY: 10,000 b/d

OIL PRODUCTION: 1,000 b/d

OIL RESERVES: 40 million bbl

GAS RESERVES: 200 bcf

Kyrgyzstan, with insignificant reserves of oil and natural gas, must import large volumes of these fuels to meet its energy requirements. The Kyrgyz government wanted to reduce the nation`s dependence on energy imports. The only viable option was thought to be development of hydroelectric potential. In 1998, hydroelectricity met about one fourth of Kyrgyzstan`s total energy requirements.

Kyrgyzstan in 1998 had seven developed oil fields and two oil and gas fields. Because of difficult geological structures and water encroachment, recovery rates were low.

With gas production low, Kyrgyzstan had to rely on imports. In the northern region, it received gas through the Bukhara-Tashkent-Bishkek-Almaty pipe-line.

Natural gas entered the southern region of Kyrgyzstan from Turkmenistan and Uzbekistan. Uzbekistan`s decision to charge world prices for its gas exacerbated an already difficult payment situation for Kyrgyzstan.

In response to payment arrears of $30 million, Uzbekistan periodically terminated gas deliveries to Kyrgyzstan for as long as 3 months at a time.

In May 1999, Kyrgyzstan expected to start up a $35 million refinery near Bishkek.

Equipped with a catalytic reformer, the 400,000 metric ton/year (8,000 b/d) plant was to produce jet fuel, high octane unleaded gasoline, and diesel for domestic use.

The refinery was a joint venture of Manas Refinery Partners Inc., San Antonio, and Kyrgyzstan`s national airline, Kyrgyzstan Aba Joldoru.

In November 1996, Kyrgoil-a venture of Trans Hydrocarbon (Canada) and Kyrgyznaft Association, Kyrgyzstan`s state oil company-announced plans to build a $24 million refinery in Jalalabad, 150 miles south of Bishkek. It would produce 10,000 b/d of a product mix of heavy fuel oil (50%), diesel (30%), and gasoline (20%). Crude for the plant would be mainly imported, possibly from Iran.