Role of Oil and Gas Industry in Economic Development
DOI:
https://doi.org/10.31150/ajebm.v7i6.2813Keywords:
Oil and gas, Uzbekistan, Uzbekneftegaz, initial public offering, corporate governanceAbstract
Uzbekistan's oil and gas industry faces declining production due to the depletion of existing fields and aging infrastructure. A multi-level organizational structure at Uzbekneftegaz exacerbates inefficiencies, leading to increased bureaucracy and an inefficient allocation of resources.
Despite the industry's critical role in Uzbekistan's economy, there is limited research on the potential benefits of international listing as a solution to its challenges.
This study reviews the current state of Uzbekistan's oil and gas industry, evaluates the organizational structure of Uzbekneftegaz, and analyzes the potential impacts of an international Initial Public Offering (IPO) on the industry's performance.
Partial privatization through an international IPO can attract alternative financing without burdening the state budget. Compliance with international corporate governance standards is expected to enhance efficiency and productivity. Additionally, the transparency required by international markets can improve the company’s valuation and facilitate better resource allocation.
The proposed IPO can mitigate existing inefficiencies by reducing bureaucracy and ensuring a more efficient management structure. The influx of foreign capital through an IPO is likely to address the investment needs for upgrading technology and infrastructure.
An international listing can serve as a catalyst for the revitalization of Uzbekistan's oil and gas sector, fostering sustainable growth and aligning the industry with global standards. This strategic move could significantly bolster economic development and energy security in Uzbekistan.
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References
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