MUSCAT: Having just secured the Omani government’s nod to proceed with the commercial development of Block 56 in southeastern Oman, Swedish energy firm Tethys Oil is hoping it is on cusp of a significant hydrocarbon discovery in Block 58 in the southwest of the country.
On Wednesday, the independent upstream energy firm announced that it has commenced the flow testing of its first-ever exploration well, Kunooz-1, targeting hydrocarbon prospects in the Fahd area of the 4,557 km2 concession. Preliminary results from the flow testing, which aims to establish oil flows to the surface, will be available within a fortnight, according to the company.
The Kunooz prospect, described by Tethys Oil Managing Director Magnus Nordin as a “high potential prospect”, is estimated to hold unrisked recoverable prospective resources of more than 100 million barrels. Commercial success in this concession could dramatically boost the company’s standing in Oman’s Oil & Gas sector.
Stockholm-headquartered Tethys has a 30 per cent non-operating stake in Blocks 3&4 in eastern Oman, which is its flagship asset accounting for almost all of its current hydrocarbon production from Oman. It also owns and operates the exploration Blocks 49 and 58 located in the south of the country, as well as the exploration Block 56 which it operates with a 65 per cent ownership stake.
Earlier this week, the Ministry of Energy and Minerals endorsed Tethys Oil’s Field Development Plan for Block 56, which will kickstart investment inflows of around $240 million in unlocking the concession’s hydrocarbon potential. It centres on a plan to develop and appraise resources in three discovered oil fields, the Al Jumd, Menna and Sarha fields, covering multiple reservoirs. A number of horizontal development wells will be drilled as part of this initiative.
Block 58, on the other hand, can also represent a potential game-changer for Tethys Oil. Awarded in 2020 with a 100 per cent interest share, Block 58 has several high-potential prospects in the Fahd and South Lahan areas of the concession, given their adjacency to Block 6’s Harweel cluster of Petroleum Development Oman (PDO). Following the evaluation of 2D and 3D seismic data, the block has shown potential, with previously drilled wells having encountered hydrocarbon shows and multiple play concepts.
The Kunooz-1 exploration well was drilled to a depth of around 4,000 metres. In anticipation of commercial success in the block, Tethys Oil has begun exploring a farm-out of part of its share in the concession.
Significantly, these promising developments come amid a bid by Australian energy firm Roc Oil Company Pty Ltd (ROC) to acquire Tethys Oil for a cash consideration of around $180 million. The latter has endorsed the offer with a strong recommendation to shareholders to accept ROC’s all-cash proposal. Final ratification of the deal is however subject to approvals from Oman’s Ministry of Energy and Minerals, among other national authorities in countries where Tethys Oil and ROC have interests.
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