The Singapore and Almaty offices of global legal practice Norton Rose Fulbright are advising HanHong Private Equity, a Beijing based private equity fund, on its definitive agreement to acquire Kazakh oil and gas assets from the Tethys Petroleum Group.

Through this transaction SinoHan Oil and Gas Investment, part of HanHong Private Equity, will acquire a 50 per cent interest (plus 1 share) in Tethys Kazakhstan SPRL, which is a wholly owned subsidiary of Tethys Petroleum Limited, for an initial consideration of US$75 million. The deal involves additional performance bonuses of up to US$30 million based on incremental discovery of reserves, and sharing of excess profit at any exit by SinoHan from the project.

Completion of the transaction is conditional on, among others, certain Kazakh State approvals being obtained.

Tethys Petroleum Limited is an oil and gas exploration and production company currently focused on Central Asia, and dual-listed on the London Stock Exchange and the Toronto Stock Exchange.

Alex Cull, Singapore based energy partner, Norton Rose Fulbright, commented:

“This transaction highlights the recent increase in activity of private equity funds investing into the oil and gas sector in Asia. It also shows that deals can be structured to provide strong upside opportunities for both parties, and that specialist funds such as HanHong, with its industry experience and networks of connections, can bring more to the business than just funding.”

The transaction was led in Singapore by Alex Cull, assisted by associate Vanessa Chew. Tatiana Muratova, corporate partner in Norton Rose Fulbright’s Almaty office advised on due diligence and Kazakhstan law, and was assisted by senior associate Zhibek Aidymbekova and associate Kamil Jambakiyev.

Tethys Petroleum Group was advised by its general counsel, Ian Philliskirk, supported by a team from Ashurst LLP in Singapore and Tokyo.