| A Unique Central Asian Oil Opportunity
Manas has acquired four exploration licenses covering 2,264 sq. kilometers in the Kyrgyz Republic. The licenses lie within a proven petroleum system known as the Fergana Basin which extends across parts of Kyrgyz Republic and into Uzbekistan and Tajikistan. A number of deep structures have been identified. |
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Figure 1 Fergana Basin -- Block Kyrgyz Republic & Tajikistan
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Farm-in with Australian E&P Company
In November 2006, Manas entered into an agreement with Santos International Holdings Pty Ltd, a subsidiary of Australia's third largest oil and gas company, Santos Limited, to execute a phased farm-in agreement under which Manas retains 20% working interest and Santos earns a 70% operating working interest in Manas' five exploration licenses in the Kyrgyz Republic. This 70% is being granted in exchange for Santos conducting a $54 Million exploration program.
Manas has subsequently increased its working interest in the project to 25% by purchasing a 5% interest from Kyrgyzneftegas the Republic's state energy company. |
Santos International Holdings Pty Ltd., Manas' farm-in partner of the Kyrgyz project has completed a 865 kilometer 2D seismic program, and anticipates drilling a number of wells in 2011 and 2012. The program will target deeper prospects with gross unrisked recoverable resources exceeding 500 million barrels.
Figure 2 Fergana Basin -- Prospect Map
Nanai License
Manas' Nanai license is just north of the Fergana Basin's Mingbulak discovery. The concession has two known structures. The Mingbulak is the only deep under-thrust structure which has been drilled in the basin. It was drilled in 1992 just as the Soviet Union was collapsing.
Figure 3 Prospect Alabuka West
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Clearly Oil and Gas Rich
The Fergana Basin has been producing hydrocarbons since 1902.
The Fergana Basin covers parts of Uzbekistan, Kyrgyzstan and Tajikistan. The areas of the basin with oil fields are principally in the Kyrgyz Republic and Tajikistan. The Fergana Basin, has the same geology as China's Tarim basin and like all three areas it was first known for its shallow oil production.
Kyrgyz Deep Under-thrust Potential Not Tested Until The Late 1980s
The Fergana's production of light sweet crude oil goes all the way back to 1902. Significant reserve and production growth was just getting underway in the late 1980s when the Soviets started to test deeper more complex structural concepts. Local geologists could see that faults were not vertical but over-thrust, but dared not to contradict their bosses in Russia, who insisted that, similar to Siberia, all faults must be vertical. At the time the small size of most shallow fields in the Fergana was taken to indicate that its potential was limited. This was before the tectonic thrust faulting was understood by most Soviet geologists. Most shallow production in the Fergana is from reservoirs that have lost much of their original oil. They are the remaining erosional remnants of anticline structures that were far larger millions of years ago. Even the remaining structure holds less oil as it has escaped to form seeps over the eons. The remaining deep structures, however, have not been subject to erosion nor have they had their original oil deposit seeping or draining away for millions of years. As a consequence, additional large, high pressure light oil deposits such as the Ming Bulak are expected to be found.
The collapse of the Soviet Union in 1991 ended the Soviet's exploration and discovery of large oil fields in the basin's deeper under-thrust structures; however, China's drill testing of the same types of deep structures in the Tarim basin continued uninterrupted.
Though the Fergana basin covers a smaller area than the Tarim basin, it remains rich in oil.
The United States Geological Service (USGS) says that the oil should be contained in structures similar to the Ming Bulak, which are the type of structures already outlined on the Manas concessions. The primary reservoir is multiple layers of thick Paleogene (starting 65 million years ago) and Neogene (23 million years ago to present) sandstones. |
Communist Victory Causes Kyrgyz Production Collapse
As reflected in the historic oil production profile for the Kyrgyz Republic where Manas is a major player, Soviet oil production collapsed following the Russian 1917 "October" revolution. This occurred as politically motivated purges combined with the nationalizing of Russian oil fields decimated the industry. Standard Oil of New Jersey, (now Exxon) was among the few to continue investing under the new regime as was Vacuum and Standard Oil of New York, (now Mobil). Western investments helped enable Communist Russia's 1923 oil exports to reach pre-revolutionary levels.
1960s Siberian Discoveries Divert Attention from Other Oil Provinces In the early 1960s, because West Siberian oil field geology was very simple, production costs were low and its huge reserve potential was easily understood, Soviet planners almost completely ignored all other areas of the former Soviet Union.
Oil seeps
Following the 1988 production peak the Soviet oil industry's collapse was as dramatic as the implosion of the Russian communist system and by 1996 daily oil production had declined nearly 50%.
Soviet System Collapse Causes Oil Industry Paralysis
The end of Russian communist governance not only resulted in a big drop in domestic oil consumption, but the Soviet's financing of thousands of production associations completely stopped. Consequently, both Eastern European and Former Soviet Union countries' oil industry went from bad to worse. Originally they were merely deprived of modern Western exploration technology and concepts while being largely ignored because of most Soviet central planners' focus on Siberia. As the Soviet system collapsed all funding for exploration evaporated. This reality quickly forced a halt to what little new exploration and drilling activity there was across the former communist world - no matter how good the results.
One telling example is the 1992 Ming Bulak oil discovery which is near one of Manas Petroleum's most promising Kyrgyz concessions, Nanai.
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Politics & Economy
Politics
- World Trade Organization member
- Government protection of foreign investments
- Established history of profitable foreign mining operations
Economy
- Free market economy
- Low cost operating environment; experienced and competent workforce
- Overall government take via direct and indirect taxes is approximately 35%
- Free transfer on outward capital flows
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