Oman’s Gas and Oil Ministry has inked an agreement for exploration and production in the southwestern part of the country, with the Swedish firm Tethys Oil.
According to the terms in the agreement, Tethys will have the authority to explore in the Block 58 concession for oil and gas. Block 58 is located in the governorate of Dhofar in the southern part of Oman and occupies an area of 4,557 square meters.
Tethys managing director Magnus Nordin commented,
“We are very happy to have been given the opportunity to explore for hydrocarbons on Block 58. The signing of this EPSA represents another step in Tethys Oil’s strategy in the sultanate of Oman”.
Oman, the main oil producer in the Gulf outside of Opec, has mostly mature hydrocarbon reserves. The oil price collapse of 2014-16 forced the departure of several foreign oil and gas firms from the Sultanate. The Ministry has been taking numerous measures to reverse this.
Based on the agreement Tethys Oil will have access to 7,600 km of 2D seismic and 1,100 square kilometers of 3D seismic data from the previous operators of the block. Also, the logs and records of the wells that have been already drilled within the area can also be accessed by the Swedish company.
The initial exploration period would be a duration of three years, while an option of extension provides a provision to extend it a further three years, according to the Exploration and Production Sharing Agreement (EPSA).
“The government has rights to acquire up to 30 percent interest in the concession, against refunding of past expenditure”, the company said.
The EPSA contract will be turned into a 15-year production license, with a clause to be extended for another five years in case Tethys is successful in finding a commercially viable oil and gas resource.
A 3D seismic program and the drilling of two exploration wells will be covered under the first phase.