Tethys Petroleum Press Release: Corporate Update
Higher fuel excise taxes in Kazakhstan pressure Tethys’s margins and exploration plans even as field upgrades support rising oil and gas production.
Rhea-AI Summary
Tethys Petroleum (TETHF) reports on Kazakhstan’s excise tax increase and updates its Kazakhstan operations as of mid-September 2026.
Kazakhstan has raised the coefficient in its price-linked excise tax on gasoline and diesel from 50% to 95%, applied retroactively from September 1, 2026. Tethys expects this to reduce downstream margins and cash generation for Kul-Bas crude refined and sold domestically, and is revising operating and cash flow forecasts. The board does not expect the current tax and pricing regime to justify new exploration beyond existing plans such as Kronos and does not plan to bid for new licenses, instead seeking farmout partners for the Nurzhau, Diyar and Zhanasu licenses.
Oil output at Kul-Bas is slightly above 400 tons/day, with upgrades and a new compressor expected to lift production to over 500 tons/day. Natural gas output from Kyzyloi and Akkulka is about 269,000 m³/day, and the Akkulka production contract now runs to December 23, 2036.
Positive
- Kul-Bas oil production currently slightly above 400 tons/day
- Facility upgrades and new compressor expected to raise oil output to 500+ tons/day
- Gas production from Kyzyloi and Akkulka about 269,000 m³/day as of September 16, 2026
- Akkulka gas production contract extended through December 23, 2036
- Phase II of CPF upgrade substantially complete; Phase III contract signed
Negative
- Excise tax coefficient on gasoline and diesel raised from 50% to 95% retroactive to September 1, 2026
- Company expects higher excise burden to reduce downstream margins and cash generation
- Board does not see sufficient profit under current regime to justify new exploration beyond existing plans
- Tethys unlikely to participate in forthcoming Kazakhstan license auctions
- Company seeking farmout partners for Nurzhau, Diyar and Zhanasu licenses
- Timing of ARD-01 (Kronos) drilling depends on liquidity and production-enhancement progress
AI-generated analysis. How Rhea-AI works. Not financial advice.
Grand Cayman, Cayman Islands--(Newsfile Corp. - September 18, 2026) - Tethys Petroleum Limited (TSXV: TPL) ("Tethys" or the "Company") is pleased to provide an update on the Company's operations in the Republic of Kazakhstan.
Tethys Petroleum Comments on Kazakhstan Excise Tax Increase
On September 11, 2026, the Government of Kazakhstan adopted Resolution No. 816, increasing from
Under the excise framework established by Government Resolution No. 1049, the excise tax payable on gasoline and diesel is linked to an official weighted-average wholesale reference price. The formula uses statutory price thresholds of KZT 214,584 per tonne for gasoline and KZT 284,350 per tonne for diesel. Prior to the September amendment, the coefficient applied to the excess over the relevant threshold was
The official reference price used in the calculation is based on specified wholesale sales at Kazakhstan's major refineries and may therefore differ from the selling price actually realized by an individual producer. As a result, the revised mechanism may increase the excise burden even where a producer is unable to achieve a corresponding increase in its own realized selling prices. Based on the Company's current estimates, the gasoline threshold provides relatively limited headroom over normalized operating cash costs, while the diesel threshold provides greater headroom.
The change comes at a time when access to sell to alternative petroleum-product markets remains restricted. Current measures include restrictions through the second half of 2026 on exports of light distillates, jet fuel, diesel fuel, gasoil and certain other petroleum products outside the Eurasian Economic Union, as well as restrictions on certain petroleum-product exports by road and rail, subject to specified exceptions.
Industry participants, including PetroMining, have raised concerns regarding the impact of the revised excise mechanism on the economics of domestic petroleum-product sales and the potential implications for future investment and production growth.
Tethys is currently required to refine and deliver its Kul-Bas crude production into refined petroleum products for sale in the Kazakhstan domestic market. The Company expects the increase in the excise coefficient to reduce downstream margins and cash generation (where realized selling prices will not increase sufficiently enough to offset the higher tax burden). The Company is currently updating its internal operating and cash flow forecasts to reflect the revised excise tax regime and current domestic market conditions.
Bill Wells, Executive Chairman of Tethys, commented:
"The increase in the excise coefficient from
Operations Update
Oil production at the Kul-Bas field has recently increased and is currently running at slightly above 400 tons per day. Two gas turbine units are currently in service, including a rental unit, utilizing approximately 35,000 m3 per day of associated gas.
Installation of the Company's new gas compressor is substantially complete, with commissioning currently expected in early October. Phase II of the Central Processing Facility (CPF) upgrade is substantially complete and the Company expects the upgraded facility and the CPF tie in of KBD-08 to be commissioned by the end of September. These additions are expected to increase associated gas utilization capacity and increase oil production to more than 500 tons per day following successful commissioning. The increase in the amount of oil production will be dependent not only on the oil production capacity through the CPF and the ability to treat the associated gas, but also on the Company's ability to have the oil transported from its remote Aral Sea location to the assigned refinery (currently Atyrau).
The company has also signed a contract for Phase III of the CPF upgrade, which includes additional construction and installation works to further expand the facility's processing capacity. The contractor is currently mobilizing to the site, with construction activities expected to commence shortly.
Natural gas production from the Kyzyloi and Akkulka fields was approximately 269,000 cubic meters per day as of September 16, 2026. The Akkulka production contract has been extended through December 23, 2036.
The Company continues to advance preparations for the ARD-01 (Kronos) exploration well. Engineering, permitting and procurement activities are progressing, with the timing of drilling to be determined based on the Company's liquidity position and the successful completion of current production-enhancement initiatives.
Tethys shares the industry's concern regarding the impact of the increased excise burden on the economics of domestic petroleum-product supply and will continue to assess the effect of the revised regime on its Kazakhstan operations.
Annual General Meeting resolution update
The Company announces that it has been provided with a notice of intention to nominate a director of the Company at the annual general meeting of shareholders to be held on September 29, 2026.
FG Limited, a wholly owned subsidiary of Fincraft Group LLP has given notice of its intention to nominate Askar Ismailov as a director.
Fincraft has provided to the Company biographical information in respect of Mr. Ismailov which is generally summarized as follows:
- Executive with 25 years' experience in various industries with leadership roles, business transformation improvement, change management and stakeholders' management. Leadership experiences gained in diverse roles in multiple countries and cultures.
- Current experience - Advisor for Central Asia, Switzerland - representative on behalf of the Global Gas Centre. President Advisor for Fincraft Group, Kazakhstan.
Management of Tethys has not undertaken any independent review of the credentials of such nominee and consideration of such nominee will be addressed at the upcoming shareholders meeting.
About Tethys
Tethys is focused on oil and gas exploration and production activities in Central Asia.
Disclaimer
Some of the statements in this document are forward-looking. No part of this announcement constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company or any other entity and shareholders of the Company are cautioned not to place undue reliance on the forward-looking statements. Save as required by applicable law, the Company does not undertake to update or change any forward-looking statements to reflect events occurring after the date of this announcement.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contact Information:
| Tethys Petroleum | |
| Casey McCandless | |
| Chief Financial Officer | info@tethys-group.com |
| 901-763-4001 | www.tethys-group.com |
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/315076
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How does Kazakhstan’s revised excise tax mechanism work for gasoline and diesel?
The excise tax is linked to an official weighted-average wholesale reference price. The formula applies statutory thresholds of KZT 214,584/tonne for gasoline and KZT 284,350/tonne for diesel, with a coefficient now set at 95% on the excess over each threshold. The reference price is based on specified wholesale sales at major refineries and can differ from an individual producer’s realized selling price.
Why does Tethys expect the excise tax change to hurt its profitability?
The company is required to refine and sell Kul-Bas crude as petroleum products in the Kazakhstan domestic market. The higher coefficient increases the excise burden, and Tethys expects realized selling prices will not rise enough to offset the higher tax. The company said the gasoline threshold offers limited headroom over normalized operating cash costs.
What operational projects is Tethys advancing at the Kul-Bas field and CPF?
Tethys has two gas turbine units in service using about 35,000 m³/day of associated gas. Installation of a new gas compressor is substantially complete, with commissioning expected in early October. Phase II of the Central Processing Facility upgrade, including the tie-in of well KBD-08, is expected to be commissioned by the end of September, and a contract for Phase III construction and installation works has been signed, with the contractor mobilizing to site.
What factors could limit the planned increase in oil production above 500 tons per day?
Higher oil output depends on production capacity through the Central Processing Facility, the ability to treat associated gas, and the company’s ability to transport oil from its remote Aral Sea location to the assigned refinery, currently Atyrau.
What is the status of the ARD-01 (Kronos) exploration well?
Engineering, permitting and procurement for ARD-01 (Kronos) are progressing. The timing of drilling will be determined based on Tethys’s liquidity position and the successful completion of current production-enhancement initiatives.
What corporate governance development is expected at the September 29, 2026 annual general meeting?
FG Limited, a wholly owned subsidiary of Fincraft Group LLP, has given notice of its intention to nominate Askar Ismailov as a director. Management has not independently reviewed his credentials, and consideration of this nominee will be addressed at the upcoming shareholders meeting.