Tethys Petroleum completes Tajikstan joint ventureTethys Petroleum completes Tajikstan joint venture
2009-12-31 08:15 ET - News Release
Ms. Sabin Rossi reports
TETHYS PETROLEUM LIMITED: TAJIKISTAN JOINT VENTURE FINALISED
The joint venture relating to Tethys Petroleum Ltd.'s Tajik projects previously announced in December, 2007, has now been completed and its interests in Tajikistan have therefore been transferred to its joint venture company Seven Stars Energy Corp. (SSEC).
The completion of this deal had been waiting on the resolution of certain commercial and business issues which have now been resolved to the satisfaction of both parties. Tethys (through its wholly owned subsidiary Tethys Tajikistan Ltd. (TTL)) holds a 51-per-cent interest in SSEC with its Tajik partner holding the remaining 49 per cent (through Sangam Ltd.) and with SSEC being managed by Tethys in accordance with the terms of a shareholders agreement between TTL and Sangam.
Tethys's primary asset in Tajikistan is the Bokhtar production-sharing contract (Bokhtar PSC), which covers an area of approximately 34,785 square kilometres (8.6 million acres) in the southwest of the republic and including almost all of the Tajik portion of the Afghan-Tajik basin, the eastward portion of the prolific Amu Darya basin. The Bokhtar PSC was signed by Kulob Petroleum Ltd. (KPL), a subsidiary of TTL in June, 2008, for an initial period of 25 years. As a result of the completion and in accordance with the shareholders agreement, KPL has now been transferred to SSEC, giving Sangam a 49-per-cent indirect interest in KPL as consideration for its contribution in relation to the Bokhtar PSC.
In addition, TTL has signed a loan agreement with SSEC, pursuant to which TTL has agreed to lend certain funds to SSEC to finance work programs and field development plans in Tajikistan, with most funds already contributed by TTL to projects in Tajikistan falling under the terms of the loan agreement. The funds advanced will bear interest and are to be repaid by SSEC from cash flow before any profit share is paid out to SSEC's shareholders.
Julian Hammond, chief commercial officer of Tethys, commented: "We are delighted to have formalized the partnership we have with Sangam in our oil and gas business in Tajikistan. We have been working together jointly in a partnership since we first signed the SSEC shareholder agreement in 2007 but this transfer of our Tajik assets into the jointly held company allows us to now move forward as joint shareholders for all our activities. We believe our partners will contribute significantly, particularly on the commercial side, to the future success of our operations in Tajikistan, where Tethys believes there is tremendous exploration potential with exposure to a vast underexplored area in one of the most prolific hydrocarbon basins in the world, truly unique for a company of Tethys's current size."
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