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Uzbek Insider Takes Helm of $850 Million Gas Project Amid Sanctions

  • The majority stake in the Gazli Gas Storage project was transferred from Forus, linked to sanctioned Russian tycoon Gennady Timchenko, to Daxon Holdings Limited, owned by Uzbek political insider Bakhtiyor Fozilov.
  • The move raises concerns about energy security in Uzbekistan, with Fozilov's control through offshore companies and the project's economic viability questioned.
  • The deal reflects broader geopolitical dynamics, including Russian influence in Central Asia's energy sector and ongoing international sanctions against Russian elites following the Ukraine invasion.
Natural Gas

Control of an $850 million gas-storage development in Uzbekistan linked to sanctioned Russian tycoon Gennady Timchenko, a close associate of Russian President Vladimir Putin, has been transferred to an obscure offshore firm owned by an Uzbek political insider with whom Timchenko has commercial ties, an RFE/RL investigation has found.

Expansion of the underground gas-storage facility at Uzbekistan’s largest gas field, near the town of Gazli in the southwestern Bukhara region, is overseen by a Russian-Uzbek joint venture called Gazli Gas Storage.

The majority shareholder in the venture, launched in a secretive 2018 deal with Uzbek President Shavkat Mirziyoev’s administration, was the Russian company Forus, which RFE/RL’s Uzbek Service last year found was owned by a proxy linked to Timchenko, a Kremlin insider who is under both U.S. and EU sanctions.

But a new investment program authorized by Uzbek Prime Minister Abdulla Aripov on February 14 revealed that the 60 percent stake in Gazli Gas Storage previously held by Forus had been transferred to a Hong Kong-based company called Daxon Holdings Limited.

Corporate records reviewed by RFE/RL’s Uzbek Service and Kristian Lasslett, a criminology professor at Ulster University, show that Daxon’s ultimate beneficiary is Uzbek energy tycoon Bakhtiyor Fozilov.

An investigation by RFE/RL’s Uzbek Service last year revealed that Fozilov is at the center of a Russian-Uzbek network of political insiders -- including relatives of former Uzbek security service officials -- profiting from Uzbekistan’s oil-and-gas sector.

Related: 2 Companies That Could Help Europe Win Its Energy War With Russia

Companies controlled by Fozilov, who serves as a key figure in Moscow’s energy ties with Tashkent, have received billions of dollars in contracts under Mirziyoev's energy program, the investigation found.

That investigation, published in February 2023, also revealed that a secret Uzbek government report had warned that offshore control of the Gazli expansion placed the country's energy security at risk by giving control over the strategic asset to the Timchenko-linked Forus, which the authors called a company of "dubious origin."

Fozilov’s control of Gazli Gas Storage, in which Uzbek state energy monopoly Uzbekneftegaz has a 40 percent stake, is now held through a nesting doll of Hong Kong offshore companies.

The secret report said the Gazli expansion, which envisions boosting storage capacity from 3 billion cubic meters of gas to 10 billion cubic meters by 2025, did not make economic sense, an assessment echoed in a confidential report by Boston Consulting Group that called the project "impractical."

Related: How To Profit From Europe’s $800 Billion Energy Crisis

Daxon, the 60 percent shareholder, is owned by three other Hong Kong-incorporated companies: Kenfame Limited and Denmount Limited, which are owned by Fozilov and hold 34 percent and 33 percent stakes in Daxon, respectively; and Sunworth Limited, which holds the remaining stake and is owned by Fozilov’s cousin, Sanjar Samiev.

Kenfame Limited was founded by Russian businessman Ivan Yegorov, who was identified in an August 2023 investigation by the Dossier Center as a business partner of Timchenko, a longtime close associate of Putin.

The investigation by RFE/RL’s Uzbek Service last year revealed that the founder of Forus, along with the Russian firm with which the Uzbek state partnered on the Gazli expansion, was a legal assistant named Aida Chachkhalia who has multiple ties to Timchenko and who was the sole Forus shareholder until December 2021.

Yegorov later obtained a 34 percent stake in Forus, while Fozilov and an anonymously owned Cypriot company called Kunlun Red Star Investment each took 33 percent stakes, the Dossier Center investigation reported, citing financial filings for Forus.

Following the Dossier Center investigation, the Ukrainian government imposed sanctions on Yegorov, citing his role in allegedly helping Timchenko evade sanctions.

Fozilov and Timchenko have other commercial ties as well. Fozilov is chairman of Eriell Group, a monopoly contractor in the Uzbek state energy sector that he previously owned through an offshore company together with Gazprombank and a Russian company called AMGA Consulting that shares a Moscow address with companies owned by Timchenko and his son-in-law.

The United States and the European Union have escalated their punitive sanctions targeting the Russian political and business elite following the full-scale invasion of Ukraine that Putin launched in February 2022.

The expansion of Uzbekistan’s largest underground storage facility comes amid increased imports from Russian state gas giant Gazprom, which the Kremlin has used as a geopolitical lever in its dealings with consumers in Europe and the former Soviet Union.

Gazprom is set to deliver 2.8 billion cubic meters of gas to Uzbekistan annually through 2025 under a deal signed with Tashkent last year.

RFE/RL’s Uzbek Service sought comment from Fozilov, Timchenko, Uztransgaz, and the Uzbek government about Daxon’s new role as controlling shareholder of Gazli Gas Storage.

None responded in time for publication.

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By RFE/RL

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