Chief Executive of Tethys Petroleum Independent David ROBSON:
“WE EXPECT THE KAZAKH GAS MARKET TO BE LIBERALISED, BUT CHINESE PRICES CURRENTLY APPEAR BETTER”
Chief Executive of London-listed Tethys Petroleum DAVID ROBSON shares his opinion with Interfax about the company’s production targets in Kazakhstan and sales plans.
Interfax: Can you give an update on progress in Tajikistan?
David Robson: We're acquiring seismic this summer and we'll be drilling next year, probably in Q2 - maybe the beginning of Q2.
It's going well and coordination is working well between the three companies [Tethys, Total and CNPC].
Interfax: What are the prospects and challenges of working in Georgia?
DR: The prospects in Georgia offer very good potential. There's been no modern technology applied, particularly on unconventional deposits.
Georgia is an easy place to do business - it's a business-friendly environment. There are no structural impediments to working there, the potential is very significant and you receive world prices for your product.
Interfax: Can you provide some indication of planned domestic sales volumes of gas in Kazakhstan?
DR: We are planning to produce about 1 million cubic metres per day in Kazakhstan by the end of the year. How much of that goes into the domestic market and how much goes to export is still open to negotiation, but we are able to export under our contract.
It depends on pricing. We expect the Kazakh gas market to be liberalised, but Chinese prices currently appear better.
Kazakhstan set rules governing associated gas from oilfields, where it has to be sold domestically to the state gas company [Kaztransgas], but those rules do not cover specific gas developments.
Most of the gas produced in Kazakhstan - with the exception of Karachaganak, which is a special project - is associated gas from oil developments, not dry gas, as in our project.
Our negotiations with PetroChina are ongoing. We won't start exports to China until the beginning of next year.
Interfax: Can you reveal the price or parameters of gas sales to China?
DR: All I can say is that the Chinese, by my understanding, are paying between $5 and $7 per thousand cubic feet [$5-7/MMBtu] in Turkmenistan, so you would expect something similar - which is double or triple what we're currently getting. We're getting around [$1.8/MMBtu] right now in Kazakhstan.
Interfax: How difficult is it to get access to data in the region?
DR: It depends. In Kazakhstan, most of the data is held by companies, as most of the territory is licensed already. You would need to sign a confidentiality agreement if you wished to access the data with a view to a potential deal.
In Tajikistan, we have all the data as we have access to pretty much all the country. In Georgia, once again, it is licensed, so although there's a limited state database available a lot of that material is specific to the individual operator of the block.
Countries such as Turkmenistan aren't interested in attracting risk-taking investment from oil and gas companies onshore. As such, data isn't really available, and we're not interested in what's available offshore in Turkmenistan.
In other countries, such as Afghanistan, there's a fairly comprehensive database available from organisations such as the United States Geological Survey, so you can get hold of data that way.
Interfax: Do you anticipate going back into Uzbekistan at some point?
DR: If there are changes in the business climate. Last year [we needed] to decide where to [invest] this year, and felt the business climate was better in Georgia and we had a good project to work on [there].
That doesn't preclude us doing more in Uzbekistan at some point. We worked well with the state company Uzbekneftegaz. However, it was a decision we needed to make at that time.
April, 2014
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