Letter from the Managing Director

Dear stakeholders,

2019 marked yet another successful year for Tethys Oil operationally. Production and reserves are up, financials are strong with record cash position and no debt. On our operated Block 49 onshore Oman, the field operations, albeit limited in 2019, continued with zero HSE related incidents and our CSR activities in relation to that block picked up. On our non-operated Blocks 3&4, CSR activity continued at a high level and HSE incidents continued to decrease from an already low level.

But with all production and financial measurements pointing the right way, that is to say up, we unfortunately also have an environmental gauge pointing up when it should be down. Our carbon dioxide (CO2) emissions more than doubled compared to 2018. The increase is primarily due to increased flaring of associated natural gas following higher levels production in one of the newer fields in Oman, the Ulfa field. CO2 emissions have now reached a level which is not acceptable in the long run. There is, however, a positive side-effect of the increase in associated gas. We now have sufficient associated gas production that it makes economic and environmental sense to utilize gas for large scale power generation, and thereby reducing emissions and improving energy efficiency. As we explain in more detail in this report, the Operator of the Blocks has implemented several projects to assess and evaluate the feasibility of options aimed at reducing CO2 emissions significantly over the coming years.

During 2019, society’s demands of increased sustainability, reduced environmental impact and improved transparency from companies in the oil and gas sector has continued to become increasingly clear, and the pressure on us to improve our performance is increasing. Equally, the financial markets are becoming increasingly socially and environmentally aware as they look to invest sustainably and back the leaders in this new environment. Tethys Oil has every intention to rise to the challenge and prove to be one of the leaders in this field. Tethys Oil has stated an objective to create shareholder value by operating across the entire oil and gas upstream lifecycle. About a third of the world’s energy needs are satisfied by oil and will likely remain so for some time to come. In our view, as long as this demand remains, Tethys Oil sees it as its objective to contribute to satisfy that demand in an economically, socially, and environmentally responsible and sustainable way and to be both a respected corporate citizen and an attractive investment. Being active in an extractive industry gives us an added opportunity to show that it is possible to be responsible and at the same time contribute to meet the world’s demand for energy. And 2019 has presented direct challenges for us to show that we ‘are up to the job’. After all, we are a company with strong Swedish heritage, and as such have always taken pride in our environmental consciousness.

So, stay with us. “We are in this world together”. A statement which at times may seem like a rather lofty cliché but which at the time of writing, April 2020, has become very apparent. The world facing a major challenge and going through a period of unprecedented uncertainty following one of the worst HSE related crises we have experienced for a long time. We are confident the measures taken by the world community will result in a return to normality in time – and that the current situation will further underscore the need for sustainability in all human activities.

Magnus Nordin
Managing Director