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 An Ariana Media Publication 08/26/2016
 Tajikistan holds back on cheering huge oil, gas find

Asia Times
By Fozil Mashrab

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The discovery of significant quantities of oil in Tajikistan by Canadian energy company Tethys Petroleum might do more than significantly improve Tajikistan's future economic prospects.

It could have unexpected consequences for the country's dispute with its downstream neighbors over the construction of controversial hydroelectric power stations in its territory.

In mid-July, Tethys Petroleum, which has been prospecting for oil and gas in Tajikistan, Uzbekistan and Kazakhstan, hugely upgraded the oil and gas reserves of its Bokhtar Production Sharing Contract Area in Tajikistan to "estimated gross unrisked mean recoverable resources of 27.5 billion barrels of oil equivalent" consisting of 114 trillion cubic feet of gas and 8.5 billion barrels of oil and condensate. As recently as last December, Tethys said it had audited unrisked prospective resources of 1.14 BBOE with 7 trillion cubic feet of gas in place.

A report prepared by US firm Gustavson Associates indicates that Bokhtar Production Sharing Contract, which is part of the Amu-Darya basin shared by Tajikistan, Afghanistan and Uzbekistan, has some of the most prolific fossil fuel fields in the world that have not been drilled before, according to the Tethys Petroleum's press release.

Upon the announcement of the discovery of big oil in Tajikistan, Tethys chief executive, chairman and president David Robson made a statement that captured the significance of the discovery both for the company and for Tajikistan:

This hugely significant increase in our estimated resources in Tajikistan transforms our prospective resource base. I believe that these unrisked mean prospective resources are significantly greater than the estimated remaining reserves and unrisked resources in the UK North Sea. Geological and geophysical work undertaken has shown that Tethys is operating in a world class basin with enormous and untapped potential.

The deep prospects being pursued in Tajikistan have "super-giant" potential and any exploration success will be transformational for the Company. These additional seismic data will help to identify the location of the first deep, sub-salt well drilled in Tajikistan targeting extremely large prospective resources.

The latest discovery if confirmed with successful drilling in the near future will be transformational for the company and for Tajikistan, whose fossil fuel reserves previously were considered insignificant.

The latest discovery would make Tajikistan one of the world's richest countries in terms of oil reserves per capita and puts it in the same league with oil and gas rich countries of the Middle East, Turkmenistan, Kazakhstan, Russia and others, transforming it from having to meet almost all of its oil and gas needs by imports into a major fuel exporter.

The bigger issue is whether this godsend of a discovery will have any impact on Tajik government's current energy sector development strategy, whose main pillar has until now been heavy reliance on hydropower by damming tributaries to the Amu-Darya River that crosses its territory.

According to Tajik officials, Tajikistan builds several dozens of small and medium-sized hydroelectric power stations every year to increase its energy production capacity. The country also hosts the world's tallest dam - the 300-meter high Nurek dam - and plans to construct the controversial Rogun dam, which if completed will exceed that with a projected height of 336 meters.

Downstream Uzbekistan opposed construction of the Rogun dam, arguing that it will have negative environmental consequences for the region and also adversely impact its agricultural sector.

Until now, Tajik officials' trademark rhetoric has been that Tajikistan has no other option but to develop its hydroelectric power generating capacity as the country is not endowed with other alternative energy resources such oil and gas.

Some regional observers even used to juxtapose oil and gas rich downstream countries of Uzbekistan, Turkmenistan and Kazakhstan to upper stream countries of Tajikistan and Kyrgyzstan, which have been believed to lack fossil fuel reserves.

Developing hydroelectric power was considered essential even though that risked worsening tensions between Tajikistan and neighboring downstream countries, especially Uzbekistan.

The discovery of large quantities of oil and gas will significantly weaken the Tajik government's previous position such disputes, as its "no other option" argument will no longer be valid.

As significant, the discovery of such huge reserves might also bestow a legitimizing aura for the increasingly shaky Tajik government of President Emomali Rakhmon, who is seeking re-election next year. In the past two weeks, there has been an upsurge of violence in the country, with government troops clashing with local armed criminal groups in the remote Badakhshan province in the Pamir Mountains bordering Afghanistan and China.

Tethys Petroleum's findings and optimistic approach might also help the government put pressure on another foreign energy giant operating in the country - Russia's Gazprom - which has been deemed by Tajik officials to be dilly-dallying for political reasons on implementing various oil and gas exploration projects in the country.

However, up until now neither Minister of Energy Sherali Gul nor any other high-ranking Tajik official has been reported to have made any upbeat statements about the momentous discovery by Tethys, even though it is now several weeks since the company made its findings public.

That raises the question of why Tajik government and officials prefer to keep silent over the supposedly "good news".

They may fear it might influence the World Bank-sponsored economic and environmental assessment verdict of the Rogun dam, which is due to be completed in the first half of 2013.

The Tethys find, if confirmed, might also encourage the World Bank and other international donors to reconsider their stance on the construction of other controversial dams in Tajikistan.

Fozil Mashrab is a pseudonym used by an independent analyst based in Tashkent, Uzbekistan.

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