By: Nnamdi Anyadike, energy correspondent for Quamnet news
The Central Asian region could be playing host to one of the best kept oil and gas secrets in the world in the form of a massive endowment of resource riches, delegates at the November 26-27 Oil Council World Assembly heard.
However, only those companies that are ready to act boldly and decisively - and get in early - are likely to reap the rewards.
One such company that has already established a presence in the region is Tethys Petroleum Limited the independent oil and gas company that is publicly listed on the Toronto and London Stock Exchanges and on the Kazakhstan Stock Exchange (KASE).
Speaking before a panel of stock brokers and fund managers, discussing investment strategies and oil and gas company stocks, Dr David Robson Executive Chairman said, “We got into Tajikistan early and now have the first entrant advantage.”
“This advantage has given Tethys large potential exploration acreage and a world class upside in under-explored basins.”
Tethys, which is the only independent company with assets across the three Central Asian countries of Kazakhstan, Uzbekistan and Tajikistan, has a current production of 4,725 barrels of oil per day (bopd) and 17 million cubic feet (mmcf/d) of gas per day (7,500 barrels of oil equivalent per day) ,from assets across the area.
In Kazakhstan, Tethys has four contracts including two shallow gas production contracts at Kyzyloi and Akkulka. The Kyzyloi and Akkulka shallow gas field development is the first non-state dry gas development in the country. It is also one of the first tie-ins by a non-state company to a major gas trunkline in Central Asia.
Tethys’ two oil exploration contracts led in 2010 to the ‘Doris’ oil discovery at Akkulka, described by Dr Robson as “very significant.” Commercialisation of the Doris find through the company’s newly built Aral Oil Terminal is underway in a three phase process. Capacity at the terminal will eventually reach 12,000 bopd, plus 125,800 bbl crude and 12,580 bbl refined product storage.
The company has so far tested 13,000 bopd from all the wells in the Doris area and is currently increasing production and hopes to reach 4,500 bopd by Q1 2013, and the plan is to continue the increase into 2013.
Meanwhile, in Uzbekistan Tethys has an MoU to negotiate for the 10,000 sq km Bayterek exploration block in the North Ustyurt basin, where there is the potential for ‘Doris look alikes’ and other prospects. The company has also managed to substantially enhance production at the North Urtabulak oilfield through the use of new technologies.
However, it is the Bokhtar Production Sharing Contract (PSC) Tethys signed with Tajikistan’s Ministry of Energy and Industry in June 2008 that is the company’s ‘jewel in the crown.’
The PSC, in which Tethys has an 85 percent stake, is the first ever of its kind in Tajikistan, and covers an area some 35,000 sq km in the south and west of the country.
The area lies in the Afghan-Tajik extension of the hydrocarbon-rich Amu-Darya basin, which is home to some of the largest gas and gas condensate fields in the world.
There is potential for oil and gas in many horizons, but it is what Dr Robson describes as the “enormous potential for super-giant discoveries” that could lie in the deeper sub-salt section, which is exciting interest.
Major deposits nearby in Uzbekistan and Turkmenistan lie below the Jurassic salt layer and to date no well has been drilled though the salt in the adjacent Tajikistan deep prospects. Dr. Robson, however, believes it has a potential for 27.5 billion boe (114 trillion cubic feet of gas plus 8.5 billion barrels of oil and condensate) as per the most recent independent assessment made in July 2012.
Tethys is understandably upbeat about its future in Central Asia. In October, its outlook was given an additional boost when it signed a Memorandum of Understanding (MoU) with an international oil company (IOC) that could be linked to a potential farm-in for Tajikistan by January 2013.
“When we hopefully conclude the farm-in, we would expect to see this well received by the market,” said Dr Robson.
Central Asia’s long over-looked attraction is its strategic location. The 30 bcm/year Central Asia-China gas pipeline is already open as is the Kazakhstan-China oil pipeline. In September 2011, China signed an accord with Kazakhstan to build the China-Kazakh gas pipeline. With its completion in 2013, the capacity of the pipeline network delivering natural gas from Central Asia will increase by more than 80 percent.
“Whereas there has been a reliance on the off-take from gas going to Russia, we expect to see real benefits when the additional pipeline to the Chinese market is finished.”
“This will be a game changer, with regards to gas prices from our Kazakh project, with maybe a five to seven times uplift. We are also eyeing the Pakistan and Indian markets with interest,” said Dr. Robson.
Expect to hear more about this company - and the Central Asian region - in the very near future.
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