Kazakh ‘Intrigues’ Hit Tethys

Great Wall Wins Tethys Drilling Work

Tethys Petroleum’s operations in Kazakhstan have had a quadruple whammy and it is to appeal to the autocratic president, Nursultan Nazarbaev, for redress.

The Cayman Islands-registered company suggested November 6 that its own experiences in a country where it has invested $250mn and paid taxes cast grave doubt on the sincerity of the government and judiciary’s stated aim of improving the investment climate of the central Asian republic.

Over the space of a short period its sole gas sales contract has been unilaterally terminated for no reason; a life-saving finance deal with a supposedly ‘friendly country partner’ Olisol scrapped; assets frozen a few days before it was even notified of claims against it; and police have arrested management in an unusually heavy-handed manner in response to allegations of theft, it said, preventing it from running its operations.

Tethys said it is preparing to appeal to the head of the executive office of Nazarbaev, to the general prosecutor and other Kazakh government agencies, foreign embassies and trade associations requesting their assistance and intervention to help resolve these issues.

On the plus side it has found a new source of capital, albeit for a much smaller sum, and new partners which it hopes will see off the opposition.

These are State Oil Group (SOG) and Petro Impex Trade, who could each own up to 10% of the company through a share issue, bringing in $1.4mn. If completed, “the placements will bring much needed funding to the company as well as provide it with strong in-country partners in Kazakhstan and internationally,” it said.

“SOG is extremely well connected across the world to influential individuals and powerful oil companies. SOG has an experienced management team that has successfully integrated a number of substantial strategic acquisitions into their group.” And Petro Impex Trade is a Kazakhstan based company whose primary activities are trading of crude oil and petroleum products, oil refining and terminals businesses.

William Powell