Tethys and Sangam form JV to Pursue Tajikistan Projects

Tethys Petroleum Limited has signed an agreement to take a partner in its current projects in Tajikistan.

One of the first western companies to commence oil and gas operations in Tajikistan, Tethys is active in the country through its wholly owned subsidiary Tethys Tajikistan Limited. Tethys began negotiations for a production sharing agreement covering the Kulob Area of south-western Tajikistan earlier this year. The Kulob Area is a large highly prospective region which has existing oil and gas discoveries, but it has seen limited exploration in the past.

Negotiations to finalize the PSA are currently under way. The PSA requires both governmental and parliamentary consents.

An Investment Operating Agreement was entered into by TTL in October of this year to commence rehabilitation activities on old fields in the Kulob Area as a pre-cursor to the PSA. Work on the first two wells has just commenced.

Under the Agreement TTL and Sangam Limited will form a joint company named Seven Stars Energy Corporation owned and funded 51% by TTL and 49% by Sangam. The initial budget for SSEC for 2008 activities in the Kulob Area will be U.S. $10 million, with U.S. $5.1 million being provided by TTL and U.S. $4.9 million being provided by Sangam.

Tethys believes that Kulob Area has considerable potential for oil and gas condensate. The area lies within the Afghan-Tajik basin, an extension of the prolific Amu Darya basin which contains giant and supergiant gas and gas condensate fields in nearby Turkmenistan and Uzbekistan. A proven hydrocarbon system exists in the Kulob Area but only limited exploration has taken place in the past. Several reservoir horizons are present and both sweet light oil and gas condensate has been produced. Salt tectonics dominate the southern part of the area where numerous salt domes provide the potential for substantial hydrocarbon traps. Figures produced by the US Geological Survey estimate the potential for the Afghan portion of this basin which lies to the south of the Kulob Area, to be some 1.5 billion barrels of oil and 8.1 trillion cubic feet of gas.