Tethys Oil signs deal to increase Block 56 interest, assume operatorship

Tethys Oil, through subsidiary Tethys Oil Oman Onshore Ltd., will become increase its holdings and become operator in the exploration and production license covering Block 56 onshore Oman in a farm-in agreement with Medco Arabia Ltd., a subsidiary of PT Medco Energi Internasional Tbk of Indonesia.

The transaction will increase Tethys’ interest to 65% from 20%. Medco will retain a 5% interest (OGJ Online, Oct. 31, 2019).

Tethys will pay $5 million to Medco and carry up to $2 million of future expenditure. The deal includes additional consideration if the in the case a declaration of commerciality is made.

The 5,808-sq km block lies in the southeastern part of Oman some 200 km south of Blocks 3&4. Testing operations of three previously drilled wells were completed in this year’s first quarter. One well confirmed the presence of an active petroleum system with a crude oil quality of 20-25 degrees API and medium viscosity, although the commercial viability is yet to be determined.

The exploration phase for the block has been extended until December 2023.

Upon completion deal, subject to government approval, Tethys will be the operator with a 65% interest in the block with partners Biyaq Oilfield Services 25%, and Intaj LLC and Medco Arabia Ltd. each holding 5%.