Tethys Oil to buy minority stake in Oman’s Block 53

December 25, 2018

Swedish energy giant Tethys Oil announced that it has entered into an agreement to acquire two per cent participating interest in onshore Block 53 from Total E&P Oman, a wholly-owned subsidiary of French oil firm Total SA.

Block 53 consists of Mukhaizna oil field, which is the single largest producing oil field in Oman with total production exceeding 100,000 barrels per day. The acquisition is subject to government approval and the waiver of partner pre-emption rights, Tethys Oil said in a statement posted on its website.

“We welcome this opportunity which, if completed, will be a valuable complement to our existing asset base and underscores our long-term commitment to Oman,” Tethys Oil’s managing director Magnus Nordin said in the statement.

Tethys Oil said, through a wholly-owned subsidiary it will acquire a two per cent direct interest in Block 53 from Total for a cash consideration of US$32mn with an effective date of January 1, 2018.

‘The acquisition is subject to government approval and the waiver of partner pre-emption rights. Closing of the acquisition is expected during the first half of 2019. Tethys Oil will finance the acquisition with cash on hand, which at the end of the third quarter 2018, amounted to US$63.7mn’, the company said.

The Mukhaizna field is a giant heavy-oil development in Block 53 onshore Oman operated by Occidental Petroleum. The Block 53 is located in central Oman covering an area of 694sqkm, south of Tethys Oil’s operations in Blocks 3 and 4 and east of Block 49. The block is covered by a 30-year production-sharing agreement signed in 2005.

Earlier this month, Tethys Oil announced its share of production, before government take, from Blocks 3 and 4 amounted in November 2018 to 353,814 barrels of oil, corresponding to 11,794 barrels oil per day.

Tethys Oil AB, through its wholly owned subsidiary Tethys Oil Block 3 & 4 Ltd, has a 30 per cent interest in Blocks 3 and 4 while Mitsui E&P Middle East BV has 20 per cent shares and remaining 50 per cent is owned by CC Energy Development SAL.