DUSHANBE, December 24, 2012, Asia-Plus — Kulob Petroleum Limited, a Tajikistan-based wholly-owned subsidiary of Tethys Petroleum Limited, a company engaged in the exploration and development of oil and gas fields, has signed a memorandum of understanding to sell stake in the Bokhtar Production Sharing Contract to an international oil and gas company.
In press release issued on December 21, Tethys Petroleum Limited (Tethys), the oil and gas exploration and production company focused on Central Asia, announced that its subsidiary, Kulob Petroleum Limited, has signed a farm-out agreement (FOA) for the Bokhtar Production Sharing Contract (PSC) in Tajikistan with subsidiaries of Total S.A. (Total) and the China National Oil and Gas Exploration and Development Corporation (CNODC).
“Terms highlights are the following: the interest in the PSC will be held equally by the three partners namely Kulob Petroleum Limited (KPL), Total E&P Tajikistan B.V. (a subsidiary of Total S.A.) and CNODC Coop UA (a subsidiary of CNODC); Tethys owns an indirect 85% controlling interest in KPL; KPL will receive 66.67% of back costs amounting to a payment of approximately USD60 million in cash upon completion. As funding for this project to date has been provided almost entirely by Tethys, monies received by KPL from this transaction will first be utilized to repay these loans to Tethys. The exact amount to be confirmed by the Tajikistan government; KPL will be partially carried on a USD80 million initial work program such that it will pay 33.33% of its share of costs (therefore the funding obligation will be approximately USD8.9 million of the USD80 million work program); the initial work program is expected to comprise of further seismic data acquisition followed by a deep exploration well. Full details of the 2013-2014 work program will be announced in Q1 2013; and the PSC will be operated by a Joint Operating Company to be set up and owned by KPL, Total and CNODC, in proportion to their ownership in the PSC.
“The farm-out is subject to final Tajik governmental approvals and State consents. Closing will take place once these approvals and all other conditions precedent under the FOA are satisfied and is expected to take place in the first quarter of 2013.”
Singed in 2008, the 25-year Bokhtar PSC reportedly covers a total area of approximately 35,000 square kilometers in the Afghan Tajik portion of the prolific Amu Darya basin west of the Pamir mountains. The area included in the PSC is in the south-western part of Tajikistan and is a large, highly prospective region which has existing oil and gas discoveries but which has seen limited exploration to date.
According to Tethys, an independent Resource Report (dated June 30, 2012) estimates Gross unrisked mean recoverable resources of 27.5 billion barrels of oil equivalent, consisting of 3.22 trillion cubic metres of gas and 8.5 billion barrels of oil.
Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in Kazakhstan, Tajikistan and Uzbekistan. “This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits,” press release issued by Tethys said.
Total S.A. is a French multinational oil and gas company and one of the six “Supermajor” oil companies in the world. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading. Total is also a large-scale chemicals manufacturer. The company has its head office in the Tour Total in the La Défense district in Courbevoie, West of Paris.
China National Petroleum Corporation (CNPC) is a Chinese state-owned oil and gas corporation and the largest integrated energy company in the People”s Republic of China. It has its headquarters in Dongcheng District, Beijing.
CNPC is the parent of public-listed PetroChina, a company created on November 5, 1999 as part of the restructuring of CNPC. In the restructuring, CNPC injected into PetroChina most of the assets and liabilities of CNPC relating to its exploration and production, refining and marketing, chemicals and natural gas businesses.
CNPC and PetroChina develop overseas assets through a joint venture, CNPC Exploration & Development Company, which is 50% owned by PetroChina.
