International oil and gas firm marks maiden foray as operator -
Conrad Prabhu -
MUSCAT, NOV 15 -
Swedish energy firm Tethys Oil says it is optimistic about replicating the successful development of Blocks 3 & 4 onshore Oman in its newly acquired Block 49 concession, an Exploration and Production Sharing Agreement (EPSA) for which was signed here on Tuesday.
The publicly listed international firm, which has a 30 per cent interest in Blocks 3 & 4 located in the eastern part of the Sultanate, added Block 49 to its portfolio this week following its successful bid for the concession in an international tender.
In addition to a 100 per cent interest in Block 49 — a 15,439 sq km desert swathe on the Sultanate’s border with Saudi Arabia in the southwest —Tethys Oil is also the operator of the concession, effectively marking its maiden foray as an operator in the Sultanate’s increasingly expanding upstream energy sector.
Speaking to journalists after the agreement signing, Managing Director Magnus Nordin (pictured) said Tethys Oil was neither daunted by the block’s remote desert location, characterised by towering dunes, nor fazed by the fact that its long list of previous owners had failed to uncover hydrocarbons in commercial quantities.
“We believe Block 49 is quite prospective,” said Nordin. “Previous operators have recorded oil shows, so we believe there is a petroleum system in the block. But we obviously have to find the tracts and penetrate them to find the oil — that’s the challenge. But we have some clear ideas what to pursue and how we want to do it.”
In this regard, the Managing Director cited the example of Blocks 3 & 4, in which Tethys Oil is a partner. “There were 5 or 6 previous operators all of whom decided there wasn’t anything commercial there; Yet today, the blocks are producing around 40,000 barrels per day (bpd) of oil. So I believe we are good at thinking a little bit out of the box, to look upon data in new ways and see opportunities that others have not seen. We have done so in the past, and we are hopeful we will do that in the future in particular in Block 49.”
Blocks 3 & 4, covering an area of 29,130 sq km, are operated by independent oil and gas exploration and production company CC Energy Development (CCED) with a 50 per cent interest. The remaining 20 per cent is held by Mitsui.
According to Nordin, the firm’s newly established local subsidiary, Tethys Oil Montasar, has already commenced basic studies and the reviewing of data on Block 49. “The next step will be to design a seismic programme and then we know a lot more on how we are going to move further on, and we will also drill a well in next 2-2.5 years,” he said.
As the operator of the Block, Tethys Oil will aim to bring its international expertise, developed over many years, into the Sultanate. “We have a full-fledged technical team here and we hope to bring the experience we have had from the other blocks we have been active to work in Block 49,” he said. The company has onshore exploration licences in France and Lithuania.
The EPSA pact for Block 49 covers an initial exploration period of three years with an optional extension period of another three years. Commitments during this initial phase will include geological studies, seismic acquisition and processing and exploratory drilling. In the event of a commercial oil or gas discovery, the EPSA will be transformed in to a 15-year production licence which can be extended for another five years.
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