Swedish based international energy firm Tethys Oil says it expects to invest around $60 million in its Oman operations during 2018, the bulk of which is earmarked as its share of investments in the further development of the onshore producing Blocks 3&4 located in the eastern part of the country.
The new investments come against a backdrop of positive developments for the company, which added a new 100 per cent owned and operated concession (Block 49) to its assets in the Sultanate. New oil discoveries uncovered in 2017 have buoyed hopes for stronger reserves growth and higher output going forward, Magnus Nordin (pictured), Managing Director, said.
“In 2018, Tethys Oil expects investments in Oman to amount to $53-62 million, the bulk of which will be spent on Blocks 3&4.
The work programme will of course include the appraisal of the discoveries and the new seismic area as well as further exploration wells. Included is also upgrading of the infrastructure and production drilling on the older fields. On Block 49 work has commenced but, at least initially, at a lower pace than on Blocks 3&4,” Nordin stated in comments on the company’s 2017 performance and outlook for 2018.
Among the highlights of the past year was the discovery of “significant amounts” of oil in new structures near its producing fields in Block 3&4, said the Managing Director. Tethys Oil has a 30 per cent interest in the two adjoining blocks, spread over a total area of 29,130 sq km. 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.
“The Erfan, Ulfa and Samah discoveries are all undergoing long term production tests and thus already contribute to our production,” said Nordin. “A major focus for 2018 will be to complete the appraisal programmes on these discoveries and develop them into new oilfields and in the process mature the resources into reserves,” he noted.
Besides bolstering contingent and 2P reserves (the sum of proved and probable reserves), the new discoveries have also led to heightened optimism about the potential of leads and prospects so far identified in the blocks, according to the Managing Director.
“In the area just east of the Ulfa discovery, we have some ten leads which will be evaluated by the ongoing 3D seismic study covering 1,200 km2. Naturally we hope to mature the majority of these leads into drillable prospects.”
Production from the new discoveries is expected to have a positive impact on the performance of the two blocks, he stressed. “Production from the appraisal programmes and long term production tests of the Erfan, Ulfa and Samah will contribute to 2018 and we would expect future production from the discoveries to account for an increasing share of overall production. Production may from time to time also be impacted by the Opec production quota arrangement,” he added.
While Oman represents Tethys Oil’s core upstream focus, the Swedish firm also has onshore exploration licences in Lithuania and France and some production as well.