Tethys Petroleum to acquire Georgian block interests

Tethys Petroleum Ltd. will acquire interests in and become operator of several production-sharing contract areas in the Kura basin near Tbilisi in eastern and central Georgia.

Through subsidiaries, Tethys will acquire a 56% interest in PSCs covering Blocks XIA, XIM, and XIN in eastern Georgia near Tbilisi. In a separate transaction Tethys Petroleum will acquire a 100% interest in PSCs covering Blocks VIII and XIG near Tbilisi and in the Kartli area farther west.

The blocks cover a combined area of more than 6,400 sq km. The transactions are subject to approval of appropriate Georgian authorities and other conditions including rescheduling of the work programs on Blocks VIII and XIG. Tethys Petroleum refers to the blocks as Project Iberia and Project Tamar and did not name the sellers.

Tethys Petroleum said the partners in the Project Iberia blocks are well-established Georgian oil and gas companies and that it expects to work closely with their specialists in implementing operatorship. All participants are discussing the swapping of equity to give shared ownership in all of the acreage.

The company said the areas have potential for conventional and unconventional oil and gas in several horizons. It said they provide good commercial terms and international oil pricing in proximity to two large oil pipelines, a gas trunkline, and a railway.

The initial work program on Blocks XIA, XIM, and XIN is to involve 350 line-km of 2D seismic acquisition and a contingent exploratory well. Initial seismic is expected to start this summer and be completed by mid-2015. The data will complement the large existing volume of 2008-11 seismic and geological studies and would satisfy the minimum work program. Drilling is to start in second-half 2014.

The current minimum work program on Blocks VIII and XIG totals 500 line-km of 2D seismic plus further 3D detailing. One exploratory well on Block XIG and one exploratory well plus one exploratory/appraisal well on Block VIII are a contingent commitment.

The seismic commitment is currently to be completed by September 2014 but a condition for completing the Tamar transaction is to restructure this schedule with the Georgian government to provide for more time to complete this program and afford flexibility. Completion of this transaction is conditional upon this work program being satisfactorily restructured to Tethys Petroleum’s satisfaction.

Tethys Petroleum calls the commercial terms “very attractive.” On the Project Iberia blocks, 100% of costs can be recovered from up to 50% of production and the investor takes 50% of the remaining production, this falling to 40% after cumulative revenues exceed cumulative costs. All taxes, levies, and duties are included in the state’s share of production with the only other tax being a stabilized royalty of 24.19 Georgian Lari/ton ($1.95/bbl).

Commercial terms are similar on the Project Tamar blocks but with the investor share of profit oil being 40% before and 35% after payback.

Related Articles

BHP to drill first deepwater well off Trinidad in 2016, energy minister says

01/30/2015 BHP Billiton and its partner BP PLC will drill their first well in Trinidad and Tobago’s deep water in 2016 according to the Caribbean twin-island ...

Pennsylvania governor reinstates state forest drilling moratorium

01/29/2015 Pennsylvania Gov. Tom Wolf (D) signed an executive order fully reinstating a 2010 moratorium on new oil and gas leases in state forests and parks. ...

Chevron, BP, ConocoPhillips join to explore, appraise Gulf of Mexico leases

01/28/2015 Chevron Corp. subsidiary Chevron USA Inc., BP PLC unit BP Exploration & Production Inc., and ConocoPhillips Co. have pledged to work together t...

DOI’s 2017-22 draft proposed OCS program includes Mid-Atlantic sale

01/27/2015 The US Department of the Interior released a draft proposed 2017-22 Outer Continental Shelf management program that included 14 potential oil and g...

Hess cuts capital budget by 16% to $4.7 billion

01/27/2015 Hess Corp. has set a capital budget of $4.7 billion for 2015, down 16% from $5.6 billion spent last year. The company at the beginning of 2014 repo...

Obama administration proposes making ANWR Coastal Plain wilderness

01/26/2015 The Obama administration said it will propose managing more of the Arctic National Wildlife Refuge, including its Coastal Plain, as wilderness. Ala...

CNPC completes Keshen-902 appraisal well in China

01/26/2015 China National Petroleum Corp. (CNPC) has completed the Keshen-902 appraisal well in Tarim oil field at a depth of 8,038 m, 15 m deeper than the Ke...

Norway offers 54 licenses in APA 2014

01/26/2015 Statoil ASA, Lundin Petroleum AB, and E.On E&P Norge AS headlined Norway's Awards in Predefined Areas 2014 (APA 2014) licensing round for the N...

Gazprom Neft receives two Arctic shelf exploration licenses

01/26/2015 Gazpromneft Sakhalin, a subsidiary of JSC Gazprom Neft, has been awarded subsoil-use rights to the Severo-Zapadniy block on the Pechora Sea shelf a...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected