Cooperation Agreement Signed With “INTER RAO UES OJSC”

December 04, 2008

MOSCOW, RUSSIAN FEDERATION, Dec 04, 2008 (MARKET WIRE via COMTEX News Network) — Tethys Petroleum Limited (“Tethys” or the “Company” (TSX: TPL)) today announced the signature of a Memorandum of Intent on Cooperation (“MOI”) with the Russian energy company “INTER RAO UES OJSC” concerning cooperation in Kazakhstan and other parts of Central Asia (the “Region”).

Specifically the MOI concerns Tethys and “INTER RAO UES OJSC” cooperating and negotiating in good faith as a matter of priority towards the following objectives:

1. The Parties entering into an agreement for Tethys, through its local affiliates, to sell to "INTER RAO UES OJSC" gas produced by Tethys in Kazakhstan.

2. The Parties together investigating oil and gas exploration and production opportunities and working together, particularly in gas, to acquire, explore and develop these opportunities, in Kazakhstan and potentially in other parts of the Region, with Tethys being the operator of such exploration and production activities.

3. The Parties agreeing an arrangement whereby Tethys will provide operational and technical support, due diligence and market analysis to "INTER RAO UES OJSC" in "INTER RAO UES OJSC's" own investigations of opportunities in the Region.

4. "INTER RAO UES OJSC" farming-in or acquiring interests in existing Tethys assets in Kazakhstan.

The MOI is non-exclusive and for an initial period of one year.

“INTER RAO UES OJSC” is Russia’s major electricity import and export operator and is a fast growing power supplier with a number of generation and distribution assets in Russia and abroad. It currently heads a group of more than 20 companies based in fourteen countries, including power generation projects in Kazakhstan and Tajikistan. Its activities include the export and import of electric power, trading in electrical power in the domestic and foreign markets, investment, management of foreign assets, and retailing of electrical power.

Dr David Robson, Chairman, President and Chief Executive Officer of Tethys Petroleum commented: “I am extremely pleased to have signed this MOI with INTER RAO. Cooperation on gas exploration, production and sales with such a large and respected energy producer is an extremely important step forward for the development of our gas business in Central Asia. I look forward to making concrete steps forward on real joint projects with INTER RAO in the near future for the mutual benefit of both our companies”.

Yuri Vladimirovich Sharov, Head of Central Asia / Far East Business Division of “INTER RAO UES OJSC” and Member of the Management Board said “We look forward to establishing a good and long lasting business relationship between our companies in Central Asia, building on the strengths of both our organisations”.

Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan and Tajikistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.

This press release contains “forward-looking information” which may include, but is not limited to, statements with respect to our operations. Such forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. See our Annual Information Form for the year ended December 31, 2007 for a description of risks and uncertainties relevant to our business, including our exploration activities.

Tethys Petroleum Limited is listed on the Toronto Stock Exchange (TSX) with the symbol “TPL” and on the RFCA in Almaty, Kazakhstan.

Tethys Petroleum Limited
Sabin Rossi
Vice President Investor Relations
(416) 572-2065
(416) 572-2201 (FAX)

In Kazakhstan, PG Communications
Ardak Akanov, Managing Director
Office phone/fax: +7 (727) 272 8867, +7 (727) 272 8237,
+7 (727) 272 7745
Cell: +7 701 711 5604

SOURCE: Tethys Petroleum Limited