Modernization of Legal Fiscal Framework for the Oil Gas Sector

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Expression of Interest are invited for Modernization of Legal Fiscal Framework for the Oil Gas sector in Uzbekistan REQUEST FOR EXPRESSION OF INTEREST FOR SELECTION 1271656This Request for Expression of Interest is for a Firm Selection Please log in as a valid Firm User if you wish to express interest in this selection Selection InformationAssignment TitleModernization of Legal Fiscal Framework for the Oil Gas sector in UzbekistanPublication Date 30 Nov 2020Expression of Interest Deadline 14 Dec 2020 at 11 59 59 PM Eastern Time Washington D C Language of Notice EnglishSelection NoticeAssignment CountryUZ UzbekistanFunding SourcesThe World Bank Group intends to finance the assignment services under BB BANK BUDGETTF0B3916 Uzbekistan gas sector reforms implementationIndividual FirmThe consultant will be a firm Assignment DescriptionSELECTION FOR CONSULTANTS BY THE WORLD BANK GROUPREQUEST FOR EXPRESSIONS OF INTERESTElectronic Submissions through World Bank Group eConsultant2https wbgeconsult2 worldbank org wbgec index htmlASSIGNMENT OVERVIEWAssignment Title 1271656 Modernization of Legal Fiscal Framework for the Oil Gas sector in UzbekistanAssignment Countries UzbekistanASSIGNMENT DESCRIPTIONTo address challenges in the gas sector the Government of Uzbekistan GoU intends to implement a complex set of reforms related to the financial structure of the sector the liberalization of the gas market and the strengthening of the public governance as well as the corporate governance These reforms require a modernization of existing legislation and regulations including 1 An Upstream Oil Gas Legal Contractual Review to provide guidance on A single Upstream Hydrocarbon Law consistent with international best practice Model Upstream Petroleum Contracts foreign investments 2 Guidance on a Mid Downstream Gas Law to open the gas market to competition consistent with international best practice 3 Legal review of legislation that is non sector specific and provide guidance on required revision e g private investment climate public procurement environment tax energy efficiency 4 Drafting of an implementation scheme of the legal reformsFUNDING SOURCEThe World Bank Group intends to finance the assignment services described below under the following BANK BUDGET Uzbekistan gas sector reforms implementationINDIVIDUAL FIRM PROFILEThe consultant will be a firm SUBMISSION REQUIREMENTSThe World Bank Group now invites eligible firms to indicate their interest in providing the services Interested firms must provide information indicating that they are qualified to perform the services brochures description of similar assignments experience in similar conditions availability of appropriate skills among staff etc for firms CV and cover letter for individuals Please note that the total size of all attachments should be less than 5MB Consultants may associate to enhance their qualifications Interested firms are hereby invited to submit expressions of interest Expressions of Interest should be submitted in English electronically through World Bank Group eConsultant2 https wbgeconsult2 worldbank org wbgec index html NOTESFollowing this invitation for Expression of Interest a shortlist of qualified firms will be formally invited to submit proposals Shortlisting and selection will be subject to the availability of funding Only those firms which have been shortlisted will receive notification No debrief will be provided to firms which have not been shortlisted AttachmentsOptional TOR FileQualification Criteria1 Provide information showing that they are qualified in the field of the assignment 2 Provide information on the technical and managerial capabilities of the firm 3 Provide information on their core business and years in business 4 Provide information on the qualifications of key staff Terms of Reference for Modernization of Legal Fiscal Framework for the Oil Gas sector in Uzbekistan1 BackgroundWith an abundance of gas resources and an increasing gas production rate Uzbekistan is the third largest natural gas producer in Eurasia and ranks fifteenth globally Via the Central Asia China pipeline about 25 of annual gas production is exported Gas provides for almost 90 of the domestic energy supply Over the past years the government of Uzbekistan has identified that the gas industry in Uzbekistan is not growing at the pace and with the quality it has the potential for Currently gas as well electricity tariffs only partly cover the total generation costs Growing national energy demand combined with aging gas and energy infrastructure and lagging gas reserves replenishment has led to non reliable domestic power supply and limited potential for upscaling gas exports Financing the infrastructure upgrade and fostering monetization of gas discoveries has become a challenge On this path the gas sector is financially unviable and may soon be unable to meet domestic demandThe gas sector in Uzbekistan has the potential to provide affordable and secure energy supply in a financially viable manner through high performing SOE s operating in line with international governance standards Following the government s objectives for the gas sector the strategic vision includes 1 a sustainable production model for UNG 2 attracting international investors through transparent exploration tenders 3 establishment of an upstream regulator to monitor UNG and IOC s operations 4 transformation of UTG into an efficient fully regulated transmission and storage operator 5 establishment of a mid downstream regulator 6 achievement of eligibility of consumers to select their own suppliers through a clearly established procedure with specific milestones 7 a transparent wholesale market is developed at a gas trading platform with clear price discovery 8 suppliers are licensed by the Regulator 9 transformation of KGT into an efficient fully regulated distribution system operator KGT can be a supplier to consumers connected to its network 10 Establishment of new private distribution system operators following a transparent tendering process 11 adequate metering across the value chain 12 gas prices are initially raised to cost recovery level and then gradually opened to market forces 13 gas price subsidies are minimized and restricted to vulnerable consumers paid directly by the government rather than by sector companies 14 a state policy defining energy poverty both electricity and gas is in place 15 introduce clear demarcation of policy regulatory operational roles 16 the governance structure of all sector companies UNG UTG KGT is compliant to international standards To address these challenges and achieve the vision for the sector a complex set of reforms needs be implemented by the Government The issuance of several Resolutions PP 4142 PP 4388 PP 4522 PP 4664 and PP 6010 has already led to restructuring of the gas value chain including the establishment of the Ministry of Energy and the unbundling of Uzbekneftegaz JSC To fully address the identified sector issues as well as the objectives formulated in PP 4388 a next wave of Reforms will be required A comprehensive problem statement has been developed that clarifies what needs to change in several dimensions The second wave reforms are related to the financial structure of the sector the liberalization of the gas market and the strengthening of the public governance as well as the corporate governance These reforms require a modernization of existing legislation and regulations creating the foundation for further reforms Some of the legal and regulatory barriers and gaps that have been identified include Overlapping and outdated laws that undermine legal clarity and certainty Lack of clarity about the future approach to contracting PSA concession or joint venture agreement combined with the absence of an officially endorsed Model Agreement negatively affecting the investment climate for upstream projects The absence of a legal and regulatory basis for a gas regulator and for non discriminatory TPA prevents the establishment of a gas trading platform Further unbundling is required to avoid conflicts of interests that hinder the development of competition Regulatory barriers prevent the privatization of gas distribution networks under concession agreements Weak environmental protection and a patchwork of laws and regulations undermine the environmental integrity of the gas sector Without sufficient regulatory constraints and incentives significant volumes of associated petroleum gas continue to be flared There are insufficient legal and regulatory incentives to implement end use energy efficiency improvements Responsibility for the sector is fragmented There is no full independence and separation between policymaking regulatory oversight and operations High politicization of regulation creates political and regulatory risks for investors The Government s Gas Sector Reform Roadmap and Implementation Plan has been presented to governmental stakeholders and development partners by the Ministry of Energy at the Roundtable held on 23 October 2020 The Plan will be captured in a Presidential Decree outlining the Government decisions on the second wave of institutional and market reforms The Government of Uzbekistan GoU has requested the World Bank for technical assistance supporting the implementation of the gas sector reforms The Bank has made a grant available from Extractives Global Programmatic Support EGPS Trust Fund which will target the modernization of the legal and fiscal framework for the oil gas se

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