Tethys Oil drops plan for participating interest in Mukhaizna Block

Conrad Prabhu -
Muscat, jan 29 -
Swedish listed international energy firm Tethys Oil says it has abandoned a bid to acquire a two per cent participating interest in Oman’s onshore Block 53 — home to the prestigious Mukhaizna oilfield. It cited a disclosure by the seller that a partner had exercised its ‘pre-emption rights’, thereby nixing the planned acquisition.
The move comes just one month after Tethys Oil announced that it had entered into an agreement to purchase the participating interest from Total E&P Oman, a wholly-owned subsidiary of Total SA (Total). It noted however at the time that the acquisition was subject to government approval and the waiver of partner pre-emption rights.
Tethys Oil said it planned to acquire the two per cent direct interest in Block 53 from Total for a cash consideration of $32 million. The Mukhaizna field, billed as the single largest producing field in the Sultanate, is a heavy-oil development operated by Occidental Petroleum. Gross daily output from the field averages in excess of 100,000 barrels of oil per day.
Expressing his dismay at the development, Tethys Oil’s Managing Director Magnus Nordin said: “We are disappointed that we cannot complete this acquisition as Block 53 would have been a valuable complement to our existing asset base. Our long-term commitment to the Sultanate of Oman remains and we will continue to seek new projects and other growth opportunities.”
Tethys Oil already has a sizable presence in Oman’s upstream sector. The company has a 30 per cent interest in the adjoining onshore Blocks 3&4, home to the producing Farha South, Shahd and Saiwan East fields. Independent oil and gas exploration and production company CC Energy Development (CCED) is the operator of the Block with a 50 per cent interest, while Mitsui has the balance 20 per cent interest.
In 2017, the company added the 100 per cent owned and operated concession, Block 49, to its assets in the Sultanate.