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Tethys Petroleum Signs Tentative Deal for Exploration Blocks in Uzbekistan

Sunday 5 February 2012

(Press release) – Tethys Petroleum Ltd (TSE:TPL) said Wednesday it has signed a tentative agreement with Uzbek state oil and gas company National Holding Co. Uzbekneftegaz relating to some exploration blocks in the Ustyurt basin of Uzbekistan.

Uzbekneftegaz is a state-owned holding company of Uzbekistan’s oil and gas industry. It leads a consortium of Korea National Oil Corporation, China National Petroleum Corporation, Lukoil and Petronas exploring and developing gas condensate fields in the Aral Sea. Uzbekneftegaz and consortium led by the Korea Gas Corporation develop the Surgil gas field, containing about 133 billion m³ of natural gas, and build a chemical plant. Uzbekneftegaz together with China National Petroleum Corporation is building an Uzbek section of the Central Asia-China gas pipeline. They also have a joint venture for developing the Mingbulak oilfield. Together with Sasol and Petronas, Uzbekneftegaz develops Uzbekistan GTL, a gas-to-liquids project.

Tethys, which is an oil and gas explorer and producer, signed a memorandum of understanding which will provide the framework for a joint study on the negotiation process for an exploration deal. Tethys’ chief executive David Robson said: “This is an excellent step forward with our partners to potentially work together on exploring the North Ustyurt basin in Uzbekistan.”

Earlier this week, the company announced the launch of a new oil storage and rail loading facility for oil shipments from the company’s Doris oilfield into the Kazakh rail system in Kazakhstan. The Aral Oil Terminal is located roughly 230 km from the Doris oilfield, significantly reducing the distance that oil is currently trucked by road from the field, Tethys said. The opening of the terminal will as a result allow the company to initially double production to around 4,000 barrels of oil per day, due to the halving of the road trucking distance.

The new terminal will also be dedicated to Tethys oil sales, as opposed to the current rail loading point at Emba, which sees bottlenecks from overuse by several different companies. First commercial shipments through the new terminal are expected in February

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan, Tajikistan and Uzbekistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

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