Tethys Oil to invest over $90 million in Oman upstream assets
Published: 03:02 PM,Feb 06,2024 | EDITED : 07:02 PM,Feb 06,2024
‘Our asset portfolio remains very promising’ – Tethys Oil.
MUSCAT: Swedish energy firm Tethys Oil has pledged to invest over $90 million in its upstream assets in the Sultanate of Oman during the current fiscal year. This commitment is roughly on par with its allocation of between $85 – 95 million in its portfolio of operated and non-operated blocks in 2023.
According to the Stockholm-headquartered independent operator, around $63 – 67 million, representing the bulk of its budget for the current year, is earmarked towards its flagship asset – the non-operated Blocks 3&4 in eastern Oman.
Operated by CC Energy Development (with a 50 per cent interest), the producing blocks currently account for all of Tethys Oil’s revenues from its Oman assets. Tethys Oil has a 30% interest in the adjoining blocks, with Mitsui E&P Middle East holding the remaining 20 per cent equity interest.
Key expenditures related to Block 3&4 for the year include around $26.2 million towards drilling (down from $33.7 million in 2023), $6.3 million towards seismic acquisition (versus $11.6 million a year earlier) and $9.5 million in the ongoing development of a major Gas-to-Power project that was commissioned late last year.
Tethys Oil expects full year 2024 average production from Blocks 3&4 to be in the range of 8,200 ± 400 barrels of oil per day (bopd), representing its share corresponding to its net working interest after government take.
“Production from Blocks 3&4 stabilised during the 4th quarter at nearly 8,400 bopd giving an overall average of close to 8,800 bopd for the year. We have invested significantly in the Blocks in 2023, not only to make up for the lost time and lower investment during the pandemic years 2020-2021 but also as an affirmation of our long-term belief in the potential in the Blocks,” Magnus Nordin, Managing Director – Tethys Oil, said in a statement.
Also set to made headway this year is the Gas-to-Power project, which aims to reduce routine flaring of the associated gas produced on Blocks 3&4. The captured gas will be used as a power source to generate electricity for the production facilities and downhole pumps in the field.
Turning to its other assets, Tethys plans to invest $18.5 million in Block 58, a wholly-owned and operated onshore license located in the south of the country. Two exploration wells are planned for drilling in the concession this year.
“On Block 58 we are fast approaching the moment of truth with the drilling of the first exploration well in the Fahd area, Kunooz-1, expected to commence before the end of the first quarter,” the Managing Director stated.
Block 56, also operated by Tethys Oil, will attract an investment of $8 million this year. An Extended Well Test underway in the block continues to prove the productive capacity of the Al Jumd discovery, producing over 60,000 barrels gross, 332 bopd from only two wells, he said.
Finally, Block 49, located in the southwest of Oman, will receive a modest half a million dollars this year. The block hosts Dauka-1, the first well ever drilled in Oman in 1955.
Significantly, Tethys Oil has also announced a decision to initiate a strategic review of the Group’s portfolio of Oil and Gas interests. “The review will explore the possibility of rebalancing the portfolio’s mix of assets in different stages of the lifecycle and increasing the visibility of the assets’ fair market value,” it added.
According to the Stockholm-headquartered independent operator, around $63 – 67 million, representing the bulk of its budget for the current year, is earmarked towards its flagship asset – the non-operated Blocks 3&4 in eastern Oman.
Operated by CC Energy Development (with a 50 per cent interest), the producing blocks currently account for all of Tethys Oil’s revenues from its Oman assets. Tethys Oil has a 30% interest in the adjoining blocks, with Mitsui E&P Middle East holding the remaining 20 per cent equity interest.
Key expenditures related to Block 3&4 for the year include around $26.2 million towards drilling (down from $33.7 million in 2023), $6.3 million towards seismic acquisition (versus $11.6 million a year earlier) and $9.5 million in the ongoing development of a major Gas-to-Power project that was commissioned late last year.
Tethys Oil expects full year 2024 average production from Blocks 3&4 to be in the range of 8,200 ± 400 barrels of oil per day (bopd), representing its share corresponding to its net working interest after government take.
“Production from Blocks 3&4 stabilised during the 4th quarter at nearly 8,400 bopd giving an overall average of close to 8,800 bopd for the year. We have invested significantly in the Blocks in 2023, not only to make up for the lost time and lower investment during the pandemic years 2020-2021 but also as an affirmation of our long-term belief in the potential in the Blocks,” Magnus Nordin, Managing Director – Tethys Oil, said in a statement.
Also set to made headway this year is the Gas-to-Power project, which aims to reduce routine flaring of the associated gas produced on Blocks 3&4. The captured gas will be used as a power source to generate electricity for the production facilities and downhole pumps in the field.
Turning to its other assets, Tethys plans to invest $18.5 million in Block 58, a wholly-owned and operated onshore license located in the south of the country. Two exploration wells are planned for drilling in the concession this year.
“On Block 58 we are fast approaching the moment of truth with the drilling of the first exploration well in the Fahd area, Kunooz-1, expected to commence before the end of the first quarter,” the Managing Director stated.
Block 56, also operated by Tethys Oil, will attract an investment of $8 million this year. An Extended Well Test underway in the block continues to prove the productive capacity of the Al Jumd discovery, producing over 60,000 barrels gross, 332 bopd from only two wells, he said.
Finally, Block 49, located in the southwest of Oman, will receive a modest half a million dollars this year. The block hosts Dauka-1, the first well ever drilled in Oman in 1955.
Significantly, Tethys Oil has also announced a decision to initiate a strategic review of the Group’s portfolio of Oil and Gas interests. “The review will explore the possibility of rebalancing the portfolio’s mix of assets in different stages of the lifecycle and increasing the visibility of the assets’ fair market value,” it added.