Tethys Petroleum's current project in Uzbekistan is as Contractor under the Production Enhancement Contract ("PEC") for the North Urtabulak oilfield located in the Kashkadarya region south east of Bukhara within the prolific Amu Darya basin. This is an incremental oil production project where modern technologies are being applied to increase production in partnership with NHC Uzbekneftegas. Tethys has prepared a comprehensive reservoir model on the field and intends to use the information from this to drill more wells and apply modern rehabilitation techniques such as radial drilling.
Part of the obligations of NHC Uzbekneftegas under the PEC is to transport the crude oil to the Ferghana refinery where it is processed and where the Company takes an agreed split of oil products, which it then exports, and sells on the regional export market. The North Urtabulak field was the second largest oilfield in Uzbekistan and Tethys believes there is significantly more recoverable oil remaining. Tethys is using modern technologies to workover existing and potential wells in an effort to increase production in a timely manner while lowering overall operational costs.
Amongst the new technologies thus far implemented by Tethys at North Urtabulak, the recent programme of radial drilling (the first implementation of this technology in Uzbekistan) proved emphatically that this technology can be a cost-effective and time-efficient technique to increase production by accessing ‘trapped’ and/or previously inaccessible pockets of hydrocarbons. In total, five well candidates were selected for the radial drilling trial and the production increased between 23% and 409% per well after the technique has been applied.
Tethys has also used horizontal drilling and new pumping technologies on the field and is currently awaiting the results of an optimized water flood scheme.
The North Urtabulak Field produces from a Jurassic age reef structure at a depth of about 2,500 metres. Surface elevation is approximately 320 metres and the area is a desert like environment south east of the ancient city of Bukhara and close to the Turkmenistan border.
|North Urtabulak PEC|
In February 2012, the Company signed an additional MOU with UNG with the objective of providing the framework for a Joint Study and the negotiation process for an Exploration Agreement relating to certain exploration blocks in the North Ustyurt Basin of Uzbekistan – same basin as where the Company operates in Kazakhstan.
The first focus area was on increasing production at the North Urtabulak oil Field, where the Company is currently operating, and possibly in other Fields i.e. new PEC’s. The second focus area is assisting the Company in the area of new exploration. The Company believes that there is substantial exploration potential Uzbekistan, including in the Ustyurt basin in Northern Uzbekistan which lies just to the south of the area in which the Company has made its potentially significant oil discovery in Kazakhstan. The Company believes that its unique technical knowledge gained in Kazakhstan could be invaluable in any potential joint exploration work with Uzbekneftegaz in similar geology in Uzbekistan. The Company believes the issue of the Order will facilitate discussions and help progress toward obtaining some exploration acreage in this attractive area.
In May, 2012 Tethys announced it has signed a Production Enhancement Contract for a new oil field, the Chegara Group of Fields, in Uzbekistan for a period of 25 years. The Chegara Group is an underdeveloped group of fields located 14 kilometers south-west of the existing Tethys asset of North Urtabulak, and contiguous to the prolific Urtabulak gas condensate Field, within the world-class Amu Darya Basin. Under this contract Tethys is allocated refined products for the oil it produces and sells these on the export market in United States dollars. Tethys believes that these fields give significant potential for additional oil production in the short term.
Tethys has collected and interpreted a significant volume of historic seismic, drilling, geological and production data relating to the Chegara Group of fields, and plans to initially work over the existing well stock using technologies and techniques that have been successfully implemented to increase production on the North Urtabulak Field over the previous 12 years under a very similar contractual arrangement. Furthermore, it is intended that additional geophysical data will be acquired on the field to identify undrilled areas that provide high potential upside.
The Company's subsidiaries have offices in Tashkent and at North Urtabulak.
|Area Of Interest in Uzbekistan|