Battle for Bokhtar Operating Company has ended in defeat for Tethys Petroleum. International Court of Arbitration has admitted claim filed by Total and CNPC against Kulob Petroleum Limited, a Tajikistan-based wholly-owned subsidiary of Tethys Petroleum Limited, and ruled that it should hand over its share in Bokhtar Operating Company (BOC) to it partners and pay a fine of 13.7 million U.S. dollars to the complainant parties.
On December 21, 2012, Kulob Petroleum Limited 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 were the following: the interest in the PSC are held equally (33.335 percent) 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).
Recall, Total and CNPC, which are partners of Tethys in Tajikistan on Bokhtar Operating Company (BOC), have filed for arbitration proceedings at the International Court of Arbitration in relation to the Company's cash call defaults and the partners' notice to the Company to withdraw.
The partners have reportedly sought to enforce the withdrawal notice and their claim for damages of US$9.0 million (and continuing) plus costs.
BOC is the operating company of Total, CNPC and KPL which undertakes the petroleum operations within the Bokhtar block located in the southern part of Tajikistan.
The Bokhtar Production Sharing Contract (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 meters of gas and 8.5 billion barrels of oil.
Tethys is a company engaged in the exploration and development of oil and gas fields being focused on oil and gas exploration and production activities in Central Asia and the Caspian Region.
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.
