(EnergyAsia, June 20 2013, Thursday) — Tethys Petroleum Limited said it has completed an agreement with France’s Total Exploration and Production and China National Petroleum Corporation (CNPC) for their subsidiaries to each acquire a one- third interest in its production sharing contract (PSC) in Tajikistan’s Bokhtar oil and gas field.
Tethys, listed on the main exchanges of Canada and the UK, will retain a one-third stake through 85%-owned subsidiary Kulob Petroleum Limited in a deal announced last December that was approved by the Tajik government this week.
At the signing ceremony in the capital city of Dushanbe, the new partners received a bonus when the government announced it had added more than 1,186 sq km of “highly prospective acreage” to their PSC and extended its first relinquishment period by five years to 2020.
The farm-in by two global energy giants will help Tethys, an independent oil and gas company operating in Central Asia, accelerate the development of the PSC which covers a 35,000-sq km area at the northern end of the prolific Afghan-Tajik basin. The Bokhtar PSC area is thought to hold 27.5 billion barrels oil equivalent of recoverable resources comprising 114 trillion cubic feet of gas and 8.5 billion barrels of oil.
Tethys, which also operates in Kazakhstan and Uzbekistan, said its partners will pay Kulob US$63 million for past costs and up to US$80 million for future work, leaving it to contribute only US$9 million to the 2014 work programme.
The partners will jointly set up Bokhtar Operating Company BV (BOC) to operate the PSC, located about 300km from the border with China, which is expected to be the main market for future production. BOC will begin a “large seismic campaign” in the PSC area, and decide on a first exploration well by end 2014, said Total. The full details of the programme will be announced later this year.
At the country’s Presidential Compound, Tajikistan’s Prime Minister Okil Okilov and Energy and Industry Minister Gul Sherali witnessed Bo Qiliang, President of CNPC subsidiary China National Oil and Gas Exploration and Development Corp (CNODC), Michael Borrell, Total’s senior vice president for Continental Europe and Central Asia, and David Robson, Tethy’s executive chairman and President, signed the farmed-in agreement.
Mr Borrell said: “This acquisition is aligned with our bolder exploration strategy and positions the Total group in one of the world’s most prolific gas basins. The partnership between the Total, CNPC and Tethys groups is particularly well equipped to conduct successful exploration and potentially develop a value-creating project.”
Dr Robson said: “This is a fantastic deal both for Tajikistan and for Tethys. We believe the Bokhtar PSC is a world class asset with enormous potential. The strengths brought to this project by our new partners, Total and CNPC, means we are in a position to explore and develop rapidly this potential.”
Mr Bo, who is also a vice president at CNPC subsidiary Petrochina, said:
“CNPC, as the world’s fifth largest oil company, has advanced exploration and development technology, and accumulated a wealth of experience in exploration and development in Central Asia. We are very willing to work with the Tajik government and partners to promote the oil industry development in Tajikistan.”
As China’s largest oil and gas producer and supplier, CNPC is also a world-leading oilfield service providers and a global engineering contractor. CNPC owns and operates the Central Asia China gas pipeline that starts at Gedaim on the border of Turkmenistan and Uzbekistan and runs through central Uzbekistan and southern Kazakhstan. It ends at Horgos in China’s Xinjiang Uygur Autonomous Region where it links up to CNPC’s Second China West-East gas pipeline.