ROGTEC talks Caspian Development with David Robson, CEO of Tethys Petroleum Ltd

Dr. David Robson, B.Sc.,Ph.D, MBA, FGS
Chairman, President and Chief Executive Officer
Tethys Petroleum Limited

Tethys Petroleum has become a significant player within the Kazakhstan, Uzbekistan and Tajikistan oil and gas sector. Could you provide our readers with a short update of your key achievements and activities in the market?

As one of the only oil and gas companies to operate in three of the Central Asian republics, we list our key achievements as follows:
»    The first non-state dry gas developments in Kazakhstan.
»    The first commercial oil Discovery in the North Ustyurt Basin.
»    The first Production Sharing Contract in Tajikistan.
»    The first non-state drilling in Tajikistan.
»    The first and only Production Enhancement Contract in Uzbekistan.
»    The first radial drilling in the region.

Tethys has recently raised $100mln – what investment plans do you have for this money?

The recent US$100 million capital raised will be focused on further exploration and early production of our Doris oil discovery in Kazakhstan, additional exploration and production activities in Tajikistan and the potential acquisition of further oil production assets in Uzbekistan

What are the key challenges faced when doing business in this region, and how did you overcome these?

I believe that the key challenges of operating in the region relate primarily to logistics, carrying out operations in remote desert and mountainous areas, many hundreds of kilometres from the nearest infrastructure.

That we have our own fleet of drilling and production equipment means we can reduce these problems somewhat and we have developed a focused logistics and technical team able to ensure that our operations are fully supplied with the necessary equipment and technology.

Our policy of employing principally local personnel assists with dealing with local issues and allows for a cost effective operation which also provides good social benefits in terms of employment of local staff.

In terms of technology & services, what integration, if any, are there between local and international providers within Tethys?

We try wherever possible to utilise local services where available. However, some specific high technology equipment and services are not available locally and this involves contracting International providers.

As time moves on, we are finding more local contractors are providing higher quality equipment. We encourage this process whilst always ensuring that we are also using the most appropriate equipment with respect to safety and effective production of hydrocarbons.

Have Tethys recently introduced any “high end” technology that has made any difference to your regional operating practices?

Tethys has introduced radial drilling in Uzbekistan and will shortly introduce this into Tajikistan. This involves drilling using high pressure fluid jets, horizontal bore holes away from the vertical well giving significant additional surface area for more effective production of oil. So far, the results in Uzbekistan look encouraging and we believe this is the first ever time that radial drilling technology has been applied in the whole region.

With the global financial challenges faced over recent years, exploration projects for many operators have been put on hold. What exploration plans do you have for the region in 2011?
We have no plans to put our exploration projects on hold. On the contrary, we expect to continue exploring for further deep oil in Kazakhstan during 2011 with a number of exploration wells planned. We are exploring in Tajikistan as well as acquiring additional regional seismic data for further drilling and we are in discussions with the Uzbek government on possible exploration projects there.

What new well construction projects on the horizon?

We have a number of new wells planned in the nearest future for exploration, appraisal and production. We are drilling a new horizontal well on our field in Uzbekistan. We have recently reached Total Depth on a gas exploration well in Tajikistan and we are drilling an oil exploration well in the south of the country. In Kazakhstan, we plan to drill a further six wells, targeting the deep potentially oil bearing structures over the next year.

As the CEO what is your proudest moment in the company to date?

The discovery of our Doris Field in Kazakhstan – a complete wildcat exploration well drilled in an area where no commercial oil had ever been discovered in the past, with the well location being chosen based on innovative geological models derived by our technical staff and successfully implemented by our drilling and production team.

This discovery is potentially of considerable size and I believe is one of the first, if not the first, wildcat oil discovery on-shore in Kazakhstan since independence. A proud moment for Tethys!

Where do you see Tethys in 10 years time?

Building on Tethys’ considerable asset base in terms of cash flow and upside exploration, the potential for Tethys is effectively unlimited. I see us developing further projects in our current countries of operation. I expect to find more oil and gas – potentially super-giant gas fields in Tajikistan and I hope working in other areas in Central Asia and the Caspian region. In 10 years, I see Tethys being a major non-state player in the oil and gas exploration and production business in Central Asia.

And finally, what is your opinion on Peak Oil?

Oil and gas will remain the major fuel for the world for the foreseeable future. So-called alternative energy will only make a small impact and development of new forms of energy generation is still some way off.

There is still an abundance of hydrocarbons on the planet. These are increasingly in more difficult areas with respect to drilling and production technology or indeed climate and environment.

One cannot comment on “Peak Oil” without considering price. If the oil price is higher, there is more oil to be explored for, found and produced. If oil prices are lower, the commercial threshold for such developments is not reached (for example, the tar sands in Canada). However, given that the world needs hydrocarbon fuels in the longer term, it is clear that the price will increase and that these resources will be explored for and developed.

We will still live in a world dominated by oil and gas for many years to come.

Dr. David Robson, B.Sc.,Ph.D, MBA, FGS
Chairman, President and Chief Executive Officer
Tethys Petroleum Limited

Dr. Robson is Chairman, President and Chief Executive Officer of Tethys Petroleum Limited, an oil and gas exploration and production company focused on Central Asia and listed on the Toronto Stock Exchange under the symbol “TPL”. Tethys Petroleum produces gas in Kazakhstan (where it also has a potentially significant oil discovery), oil in Uzbekistan and is exploring a very large high potential area in Tajikistan.

Dr. Robson’s career has been primarily in operating oil and gas companies. He was Chairman, President and Chief Executive Officer, and one of the founders, of CanArgo Energy Corporation, formerly an AMEX listed oil and gas exploration and production company operating in Georgia, and Managing Director, Chief Executive Officer and one of the founders of London listed JKX Oil & Gas PLC, one of the first international oil and gas companies working in Ukraine and the former Soviet Union. Prior to this he was employed in technical (exploration, operations, petroleum engineering), commercial and managerial positions within Britoil PLC, Hamilton Oil (now BHP Petroleum) and Mobil.

Dr. Robson trained as a geologist, obtaining a First Class B.Sc. (Hons.) degree in Geology and a Ph.D in Geochemistry. He also holds an MBA from the University of Strathclyde with his thesis topic being the European Gas Market.

Dr. Robson has worked on oil and gas projects in Eastern Europe and the former Soviet Union since 1990, establishing the first non-state gas development project in Ukraine, the first non-state drilling in the Ukrainian Black Sea, the first non-state exploration and development wells in Georgia, the first non-state dry gas production in Kazakhstan and the first Production Sharing Contract in Tajikistan.  He has worked in many parts of the former Soviet Union including West Siberia, Sakhalin, the Pechora Sea, Kalmykia, Dagestan, the Caspian and Central Asia.  He is a Fellow of the Geological Society, a member of the Society of Petroleum Engineers, a member of the European Association of Geoscientists and Engineers, he holds the Order of Honour for services to the Georgian Hydrocarbon extraction industry, was formerly the energy sector representative on the UK government’s East European Trade Council and sits on the President of Tajikistan’s Consultative Council on Investment.

Dr. Robson has spoken at many international forums on energy related topics in the former Soviet Union and at the “Paris Club” of donor nations.