Tethys Petroleum signs MOU with PetroChina International Kazakhstan

Tethys Petroleum has signed a memorandum of understanding (MOU) with PetroChina International Kazakhstan to explore the feasibility of a long-term and mutually beneficial cooperation in natural gas and crude oil deliveries.

The companies will jointly explore the proposed delivery of gas and crude oil for export to China, and also for Kazakhstan's internal market.

"The current oil price environment continues to deliver new challenges for Tethys, as it does for the whole oil and gas industry."

Tethys already has the right to export gas to China. The company can currently sell oil on the domestic market, securing the right to export oil after conversion of the Akkulka exploration contract to a production contract.

Tethys Petroleum executive chairman John Bell said: "The signing of the MOU with PetroChina is another key step toward selling gas into the growing Chinese market and follows on from our recently published new independent reserve report stating an increase in our reserves in all categories.

"The current oil price environment continues to deliver new challenges for Tethys, as it does for the whole oil and gas industry. We have made a number of positive changes, extensively reducing our costs and also diversifying our revenue stream through our increase in production and pricing for gas."

Tethys said gas production levels remain on target in Kazakhstan with the production level recently doubling from 2014 levels to 520mcm/day.

Work is about to start on the AKK14 well and AKK05 wells, with planned operations in the second quarter of 2015.

The additional wells along with compressor optimisation are expected to further increase the production level above 570 mcm/day.

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