*The continuing high price of crude oil encourages Tethys to rebalance the Company’s project portfolio to include more projects of a ’high risk - high reward’ nature. Areas outside of Tethys’ European core area, in particular in Africa, will become of greater interest to the Company.
*Tethys intends to increase its presence in Turkey during 2005 following Turkey officially becoming a candidate country to the European Union. Tethys already holds interests in three licenses in Turkey.
*Following the recent political developments in the Ukraine, Tethys considers that opportunities to invest in oil and gas projects in the Ukraine will be enhanced. The Ukraine will therefore become part of Tethys’ core area for investments.
oil price
During 2004 we have seen a remarkable increase in the price of crude oil. The price increased from 20 USD per barrel to 50 USD per barrel before stabilising at around 40 USD per barrel of Brent crude. Noteworthy is that the price increase has also affected the long term futures market, clearly signalling that a higher
oil price environment will remain for a long period of time.
Turkey
By the end of 2004 the EU resolved to commence candidate negotiations with Turkey. This fact will likely improve the interest of EU based companies to invest in the country.
Ukraine
The recent political changes in the Ukraine will likely improve the business climate through a better and liberalised legal framework, which should increase foreign investments. In this regard the political risk is likely to decrease, especially with the positive influence of the EU in the region. With an average daily production 2004 of 83,000 barrels of oil and 1.9 billion cubic feet of gas, Ukraine is one of the largest producers of oil and natural gas within continental Europe.