London, May 13, 2026, 13:02 (BST)
BP PLC bought a 40% participating interest in a production-sharing agreement for six oil and gas exploration blocks in Uzbekistan’s North Ustyurt region, its latest upstream move as the British major shifts back toward conventional energy. A production-sharing agreement, or PSA, is a contract in which investors fund exploration and share any output with the state.
The timing matters. BP is trying to prove that Chief Executive Meg O’Neill’s leaner company can lift returns and steady investor confidence after years of strategy changes. She has told staff a reorganisation into upstream and downstream units will start in June, moving BP closer to the structure it used before its 2020 renewables push.
Oil prices are helping that case, for now. Brent crude was near $108 a barrel on Wednesday as investors watched a fragile Middle East ceasefire and the Strait of Hormuz disruption, keeping the sector focused on fresh barrels, cash flow and debt reduction.
BP bought 20% from SOCAR, Azerbaijan’s state oil company, and 20% from Uzbekneftegaz, Uzbekistan’s national fuel company. BP now holds 40%, while SOCAR and Uzbekneftegaz each retain 30%; SOCAR remains operator. The blocks are Boyterak, Terengquduq, Birqori, Kharoy, Qoraqalpoq and Qulboy, with seismic work under way in the first phase. BP shares rose 0.5% to 550.50 pence in Wednesday morning London trading.
Gio Cristofoli, BP’s regional president for Azerbaijan, Georgia and Türkiye, said the company saw “significant resource potential” in Uzbekistan. Energy Minister Jurabek Mirzamahmudov called the deal “not merely a commercial agreement,” while SOCAR President Rovshan Najaf said it supported longer-term Azerbaijan-Uzbekistan energy ties. AJ Bell
The deal also gives BP its first upstream foothold in Uzbekistan, a Central Asian gas market where Tashkent is seeking outside capital as domestic demand rises and older fields mature. The agreement was signed in Tashkent during the Oil and Gas of Uzbekistan Conference 2026.
Investors have been warming to the stock. Bloomberg reported Monday that BP’s bullish analyst recommendations had doubled over the past year, with RBC Capital Markets becoming the latest broker to move to outperform as the shares rallied 24% in 2026.
RBC analysts led by Biraj Borkhataria said higher commodity prices gave BP a “second chance” to cut debt, keeping a 700p target on the stock. But the same note warned against rushing capital returns before the balance sheet is fixed: “Best not to get FOMO,” Borkhataria wrote. Investing
BP’s own numbers show why debt remains central. The company reported first-quarter underlying replacement-cost profit of $3.2 billion, a profit measure that strips out inventory swings and some one-off items, while net debt rose to $25.3 billion. It kept 2026 capital expenditure guidance at $13 billion to $13.5 billion and reiterated a target to cut net debt to $14 billion to $18 billion by the end of 2027.
The Uzbekistan entry sits beside a retreat from some lower-carbon assets. Last week BP said it would sell stakes in two UK carbon capture projects; carbon capture means trapping carbon dioxide emissions and storing them underground. Equinor and TotalEnergies remain partners in the Northern Endurance project, while Shell exited in 2023.
Prediction markets pointed more to oil-price tension than to a clear BP-specific trade. Kalshi’s Brent contracts showed about a 51% chance of Brent above $106.99 on May 29 and 53% odds above $104.99, while Polymarket’s crude page showed an 86% chance of crude futures hitting $105 by end-June and 37% odds that WTI touches $105 this week. These are fast-moving retail markets, not oil benchmarks.
The risk is that this is still early-stage exploration, not near-term production. No resource size, spending plan or development schedule was disclosed, and a drop in oil prices would dull the appeal of frontier acreage. The U.S. Energy Information Administration said Brent could average about $106 in May and June before easing toward $89 in the fourth quarter, though a longer Hormuz closure could add about $20 a barrel near term.
For BP, the Uzbekistan deal is small in financial terms but useful in message. The company is adding upstream options, cutting back selected low-carbon exposure and telling investors it can be simpler without standing still.
