Extract from South China Morning Post


The big dream
David Robson's big dream is to create the largest oil and gas company in Central Asia. While some way off at this stage, the company he founded, Tethys Petroleum, of which he is chairman, president and chief executive, took a big step in this direction last month with a farm-in agreement with Total and China National Petroleum Corp which is expected to be approved by the Tajik government shortly.
In a deal initially worked out in Hong Kong, the three are to form a partnership company to explore for oil and gas in Tethy's enormous exploration acreage amounting to some 35,000 square kilometres - almost the size of Switzerland - in southwest Tajikistan. An audit of the area last July raised the potential from 1.5 billion barrels oil equivalent of oil and gas to 27 billion barrels.
Robson says that the potential is more than estimates for the remaining recoverable potential in the North Sea. He adds that assuming mainland China's demand for gas does not increase, the area has sufficient gas to fuel its needs for the next 25 years.
However, China's needs will increase and although some of this will be met from conventional and unconventional sources, there will still be a shortfall which will have to be covered either by expensive liquefied natural gas or pipeline gas. If sufficient gas is found, the partnership is likely to build a pipeline into Xinjiang. With CNPC as a partner the venture should be assured of a market, though there could be competition for the gas from India and Pakistan.
At least one analyst has described the farm-in deal as transformational for Tethys, which has a market cap of C$169 million (HK$1.32 billion), since it gives it cash to fund operations in Kazakhstan and Uzbekistan. It's also a major deal for Tajikistan, since it will accelerate exploration of its resources.