Tethys Oil to develop block 49, ministry to sign three more agreements on November 14

Business Saturday 11/November/2017 17:21 PM
By: Times News Service
Tethys Oil to develop block 49, ministry to sign three more agreements on November 14

Muscat: Tethys Oil, a Swedish oil firm, said the company will be issued an exploration licence to develop an onshore block (49) in the south-west of Oman.
An exploration and production sharing agreement between the Ministry of Oil and Gas and Tethys Oil for an initial period of three years will be signed on November 14, according to a press release.
Apart from block 49, the Ministry of Oil and Gas will sign similar exploration and production sharing agreements with other companies for developing three other blocks - 30, 31 and 52, the ministry reported.
“Block 49 is an onshore block that covers a prospective, but still rather unexplored area in the South West of the Sultanate, bordering Saudi Arabia,” added the release.
Tethys Oil will, through its wholly-owned subsidiary Tethys Oil Montasar Ltd, be the operator of the block and hold 100 per cent of the licence interest.
Block 49 covers an area of 15,439 square kilometres. More than 11,000 kilometres of 2D seismic data that has been acquired by previous operators has been made available to Tethys Oil. “Nine wells have been drilled within the block boundaries, several of which are reported to have encountered oil shows,” according to the press release.
The agreement for Block 49 covers an initial exploration period of three years, with an optional extension period of another three years. In case of a commercial oil or gas discovery, the agreement will be transformed into a 15 year production license, which can be extended for another five years. In case of a commercial discovery, Oman Government Company has a right to acquire up to a 30 per cent interest in Block 49 against refunding of past expenditures. The initial work commitments during the first period include geological studies, seismic acquisitions and processing and exploratory drilling.
"The block covers an area with known oil shows, a limited initial financial risk and offers several, as yet immature, but potentially very prolific play concepts. After more than ten years in Oman, Tethys Oil has built a strong technical team. As operator of the block, we are confident our Omani experience will be well suited to make Block 49 into a success," said Tethys Managing Director Magnus Nordin.
Apart from these blocks, the Oman government is expected to award four oil and gas blocks to international oil companies on a production sharing basis in the second quarter of 2018. The Sultanate’s Ministry of Oil and Gas began a bidding round for blocks 43B, 47, 51 and 65 in September.
Registrations for the licensing round were started on September 20, and the deadline for submitting bids is December 31, 2017.
The Oman government has been encouraging multinational oil giants to find new reservoirs, in a move to sustain production levels. As huge investments are required for bringing crude oil and natural gas above the ground, in view of the peculiar nature of reservoirs in the Sultanate, the government has been encouraging multinational firms to undertake exploration and production on a production sharing basis.
The Sultanate’s crude oil output stood at 235.33 million barrels in the first eight months of 2017, against 244.79 million barrels in the same period last year. The country’s total exports declined by 9 per cent on a year-on-year basis in the first seven months of this year – to 197.08 million barrels from 216.46 million barrels.