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Thursday, 24 November 2011, 13:30 HKT/SGT
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Source: Quamnet
Quamnet Speaks with Tethys, an Oil and Gas Company which Operates in Central Asia

HONG KONG, Nov 24, 2011 - (ACN Newswire) - Quamnet.com ("Quamnet"), a division of Quam Limited ("Quam"; HK:952), has conducted an interview with Tethys Petroleum Limited ("Tethys" or the "Company"; TSX:TPL; LSE:TPL), the only independent oil and gas company operating in three of the Central Asian countries, the Republics of Kazakhstan, Tajikistan and Uzbekistan.

During the interview, Dr David Robson, Chairman, President and Chief Executive Officer of Tethys expressed his view on the energy demand of the Eastern Pacific Rim and suggested ways that Tethys could power the region with its Central Asian natural gas assets.

A visionary independent oil and gas company operating in Central Asia's vast oil and gas basins is ambitious to power China and the rest of the Eastern Pacific Rim, the world's fastest growing economic engine, with the abundance of its Central Asian natural gas assets that are conveniently sitting on the region's doorstep.

Tethys is an oil and gas exploration and production company focusing on Central Asia. Being the only independent operating in three Central Asian republics (Kazakhstan, Tajikistan and Uzbekistan), the company has gained years of operating experience in the region while leveraging a global investor base as a listed company on the Toronto and London Stock Exchanges.

Dr. David Robson, Chairman, President and Chief Executive Officer of Tethys, attended (Nov. 12th) the Asia-Pacific Business Symposium held in conjunction with the 23rd APEC 2011 Leaders' Week in Honolulu and sponsored by the Pacific Basin Economic Council (PBEC), the East West Center (EWC) and supported by the APEC Business Advisory Council (ABAC). Dr Robson was also elected as a member of the board of PBEC at the PBEC AGM held coincidentally.

Dr. Robson is an enthusiastic advocate for the promotion of natural gas, the cleanest of all fossil fuels, which, with its mature technologies and extensive market penetration, make it the ideal alternative for the energy hungry East Asian economies from both environmental and economic perspectives. Dr. Robson delivered a presentation on gas from Central Asia at the Asia-Pacific Business Symposium, highlighting energy risks for the Eastern Pacific Rim and the urgent need for secure, clean energy as well as the importance of encouraging the public and private sectors to develop a more efficient exploration and distribution of such resources.

China's robust economic development entails ever-growing consumption of energy that is obviously far beyond its own reserves and domestic supply. Indeed, China has already become a major importer of crude oil and gas from Africa, Russia and the rest of Asia within the past decade and is already the world's 4th largest gas consumer. Meanwhile, China is committed to reduce its over-reliance on coal and other forms of environmentally harmful energy resources. Natural gas is seen as a key component of clean energy supply and the Chinese authorities plan to lift the proportion of natural gas to 8.3% of the country's energy mix during the implementation of the 12th five-year plan and further to as much as 10% by 2015.

Increased usage of natural gas in the energy mix will be required in order to meet growing energy demand without creating more carbon dioxide emissions and other pollutants. However, it is estimated that the country's domestic production of natural gas will only meet, at most, half of its demand by 2020, leading to the inevitable conclusion that China must import more gas to secure its rising energy needs. An energy-hungry economic giant with an increasing appetite for clean and more sustainable resources is certainly a powerful catalyst to foster natural gas exploration and production in the neighboring regions, especially in these Central Asian countries.

Central Asia has the continent's most extensive sedimentary basins with abundant natural gas resources, most of which remain unexplored. With sparse populations and limited local consumption, the potential for export to major markets especially to China is undoubtedly significant, particularly as Central Asian countries wish to diversify their energy exports away from the reliance on Russia and Europe. Furthermore, China has formed intimate partnerships with Central Asia based on their traditional and historical connections and through the mechanism of the Shanghai Cooperation Organization (SCO). Chinese officials believe this can best ensure stable, long-term energy supplies with lower risk than that of importing natural gas resources from turbulent nations like Afghanistan, and at considerably lower cost than importing in the form of LNG from other producing areas, such as Indonesia and Australia.

Tethys has large exploration and production contract areas and is presently producing oil in Uzbekistan, gas and oil in Kazakhstan, and oil from its enormous contract area in western Tajikistan. All of the company's on-going projects are located in the region's major sedimentary basins (NorthUstyurtBasin, Amu-DaryaBasin, and Afghan-TajikBasin) which have adequate infrastructure, considerable output assurance and all are conveniently connected to existing pipelines to ensure timely delivery at affordable costs.

Among these expanding trans-regional energy arteries, the Central Asia-China gas pipeline with a capacity of 30-40 billion cubic meters/year (Bcm/y) is already in use, and the Kazakhstan-China gas pipeline with a capacity of 10-15 Bcm/y is nearing completion, providing a combined total annual pipeline gas supply to China of up to as much as 55 Bcm/y. China's second west-east pipeline is scheduled to be fully operational by the end of this year, and construction plans for a third such line are already in place. Both of these pipelines are critical to realizing the country's import needs from Central Asia. Tethys' gas fields in Kazakhstan could tie into the Kazakh - China gas pipeline and allow Tethys to export natural gas direct into the China market.

Tethys' press release dated Nov. 14th shows the company's encouraging operational updates. In Kazakhstan, AKD06 Doris appraisal well, which is located primarily to target the most prolific producing horizon in the area, is being tested with advanced technologies and flowed high quality oil at over 4,300 barrels per day (bopd). It is hoped that AKD06 well will extend the known producing area of the Doris oil discovery at this horizon and provide sufficient data to move on and drill further wells to test the full extent of the discovered field. To date over 13,200 bopd have been tested from the Doris discovery. Kalypso (KBD01) wildcat exploration well has already reached its total depth and drilling and geophysical data indicate 3 potential Jurassic and Cretaceous zones with potential hydrocarbons. Furthermore, a new rail loading facility closer to the field is being constructed, and upon the completion of this terminal by the end of this year, it will enable oil production to over double and potentially grow further in 2012.

As for Tajikistan, with a capacity of over 500 bopd, the company's Beshtentak well BST20 has been placed on oil production and its gas being tied into local gas grid. Tethys has other workover candidates on the field with gross prospective resources of 11.7 million barrels of oil and 16.1 billion cubic feet of gas. Persea 1 exploration well targeting the Bukhara limestone formation in a 4-way closed structure is planed to reach its full depth before the end of this year and the company's East Olimtoi (EOL09) well has tested oil and is thought to be the first new exploration oil discovery since Tajik independence. The company also continues to conduct its longer term strategy of acquiring sufficient data to locate and drill a deep exploration well below the regional salt layer to the targeted zones in the Tajikistani part of Amu-Darya basin, where some of the world's biggest gas-condensate fields are located. This gas would find a ready market in China, Europe or possibly India and could be of substantial potential. The company is already developing fields in the Uzbek part of the basin, and in both Uzbekistan and Turkmenistan there are super giant gas and condensate fields. The company is optimistic that Tajikistan has the same potential.

Tethys' pipeline gas boasts distinctive and realistic advantages over green technologies such as wind and water, since there is still no scalable, reliable alternative to fossil fuels in the near-term, while maintaining an advantage over other fossil fuels by virtue of its reasonable cost and lower carbon footprint. According to Dr. Robson, because onshore exploration and production enjoys relatively cheap drilling and operating costs, the price of such gas can be dramatically lower than that of liquefied natural gas (LNG), coal bed methane (CBM) and other unconventional natural gas. Further, Robson maintains that because the transportation of the gas is mainly long-distance pipelines with no special facilities required, other than the ability to accept and meter the gas when it is taken into the pipeline and when it exits to pipeline to end customers, it requires upfront capital investment for building of the pipeline, but enjoys low on-going operating costs. Central Asia has numerous untapped and under-explored areas and thus provides ample opportunities for independent companies like Tethys, according to Robson.

Dr. Robson also believes Tethys benefits greatly from its independent status. Compared with its state-owned counterparts, he says the company is more focused on specific areas and can develop smaller fields economically in phased approaches while being able to employ leading-edge exploration and development strategies and benefit from more rapid decision-making in a more flexible manner. The company also pioneers in adapting to the local environment, thereby lowering operational costs.

By making full use of its extensive presence in the region, convenient pipeline connectivity and its uniqueness of being an independent developer, Tethys is well poised to be a key player in this sector and has the incentive to provide natural gas from the right place at right prices so as to deliver value to the market, and thus, to further extend the "Silk Road" of clean energy from Central Asia, the center for energy, to China and the rest of the Eastern Pacific Rim.

- Dr. David Robson, Chairman, President and Chief Executive Officer of Tethys, delivered a presentation on gas from Central Asia at the Asia-Pacific Business Symposium, highlighting energy risks for the Eastern Pacific Rim and the urgent need for secure, clean energy as well as the importance of encouraging the public and private sectors to develop a more efficient exploration and distribution of such resources.

Contact:
Quam IR

Ms Anita Wan
Tel: +852-2217-2811
E-mail: anita.wan@quamgroup.com

Ms Sharon Au
Tel: +852-2217-2812
E-mail: sharon.au@quamgroup.com
 
Ms Vanessa Lau
Tel: +852-2217-2814
E-mail: vanessa.lau@quamgroup.com




Topic: Research / Industry Report
Source: Quamnet

Sectors: Gas & Oil, Daily Finance
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