Tethys Oil Sustainability Report
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Tethys Oil Sustainability Report 2020
Contents Letter from the Managing Director 3 Mission, Vision & Values 4 Our business model 5 Tethys Oil Policy Framework 6 2020 in Brief: Production, Reserves and Financials 7 An evolving sustainability strategy 8 Establishing the ESG framework 10 Setting the baseline 10 Materiality assessment 11 Stakeholder engagement 11 Sustainable operations 12 Performance metrics 14 Environment and emissions 16 Air emissions 17 Water use 19 Spill prevention 19 People and society 20 Our people 21 Human rights 21 Community engagement 22 CSR activities 22 Health and safety 24 Governance and ethics 26 Anti-corruption 27 Anti-fraud and protection of Group assets 27 Whistle blower 27 Key sustainability risks 28 Auditor’s report 31 Address 32 This sustainability report is produced in accordance with the Annual Accounts act (ÅRL chapter 6, §10-14) and encom- passes Tethys Oil AB (publ) and its subsidiaries. The board of directors is responsible for the preparation of the report.
Letter from the Managing Director
In this year of the Pandemic, the question profit and growth, but said nothing of remained unchanged planning for reduced
of sustainability broadened its reach and the implicit cost to the environment, the flaring and reduced emissions has con-
increased its urgency. The drop in eco- health and well-being of our employees tinued unabated. As we have increased
nomic activity decreased levels of pollu- and our impact on society. As this report so our operated acreage, Tethys Oil has and
tion and traffic congestion. We welcomed aptly illustrates, focus is now also directed will rise to the opportunity of expanding
the increase in air quality and return to at the other side of the equation – the costs our brand of sustainability to all operated
nature offered by the lock downs. But the that are not immediately obvious. areas including community relations, low
response to fight the Pandemic could not emission vehicles and all health and safety
have been mustered without strong econo- We provide a product for energy genera- related areas. All in line with our Mission,
mies. The need for concerted action and tion that when used has an impact on the Vision and Values.
resources to fight the Pandemic under- overall environment that is measurable
scored the importance to society of resil- and sustainable in the short to medium So please take some time to at least browse
ience, economic reserves and not least - term. There are any number of energy through our sustainability report for 2020.
access to energy. generating technologies, but they all have And if you read it in detail and have com-
trade-offs. In the longer term though the ments so much the better. Tethys is in the
Access to energy is an absolutely essen- continued growth in oil consumption is oil business to stay and we will welcome
tial part of economic activity, which in unlikely to be sustainable by any counts any feedback to make our presence more
turn is crucial for progress, affluence and and more long-term sustainable ways of sustainable.
good health. But unfettered use of natu- generating energy must be applied. For
ral resources, unlimited pollution of the Tethys Oil as a Company and for you as
environment where we live and decreasing investors in an oil producer the task is
biodiversity because of human expansion twofold: supply the product as long as
will counteract any progress achieved. The there is demand and do this in an opti- Magnus Nordin
paradox of 2020 illustrated so well the two mally sustainable way. Managing Director
sides of this equation.
As this report shows, in 2020 the effects
Previously we measured and accounted of the pandemic resulted in a lower car-
only the economic activity with focus on bon footprint and while carbon intensity
3
Mission Vision Values
Tethys Oil AB (publ) (“the Company”) Tethys Oil’s vision is that growth continues Tethys Oil’s corporate culture emanates
and the entirety of its group (together, through the Group's exploration success. from the Company's Scandinavian roots.
“Tethys Oil” or the “Group”) is an oil and Tethys Oil seeks to build, maintain and It is the responsibility of Tethys Oil’s man-
gas exploration and production company expand a well-balanced and self-financed agement to foster a corporate culture that
with a primary objective of creating share- portfolio of oil assets, offering a measured promotes the values and principles out-
holder value working across the whole exposure to onshore production, develop- lined in Tethys Oil’s Code of Conduct.
upstream industry lifecycle of exploration, ment, appraisal and exploration potential. Tethys Oil aims to act in all respects in a
appraisal, development and production. The focus today and tomorrow is on geog- responsible, fair, accountable and ethical
A central belief in Tethys Oil's business raphies with proven petroleum systems, manner towards all aspects of the environ-
model is to explore for and produce oil and existing infrastructure, established institu- ment and to all individuals and entities
gas in an economically, socially, and envi- tional frameworks and low political risk. In that the Group encounters in its course of
ronmentally responsible way. The Group all its activities, Tethys Oil seeks a balanced doing business. Tethys Oil aims to apply
applies the same standards to its activities approach to risk. the same standards to all its activities wher-
worldwide to satisfy both its commercial ever they are carried out.
and ethical requirements as per Tethys
Oil's Code of Conduct. It is of vital importance to Tethys Oil that
the Group maintains and further builds on
Tethys Oil seeks to be a sustainable and its reputation as a responsible and forward-
profitable business long-term. Sustain- looking corporate citizen in all countries
ability means running a business that is where Tethys Oil has a presence and in
not only profitable but is aligned with the relation to all stakeholders, may they be
requirements and expectations of stake- shareholders, employees, contractors, part-
License
holders both within and outside the Group. acquisition ners or someone else.
Production Exploration
Exploratory
Development
drilling
Appraisal
Mission
Vision
Values
Our business model
Tethys Oil’s business model is to be active In all its activities Tethys Oil seeks a bal- particularly in harsh environments. The
in the onshore exploration, appraisal and anced approach to risk. The strategic deci- strategic decision to focus on geographies
production stages of the upstream oil and sion to focus purely on onshore explora- with proven hydrocarbons allows Tethys
gas business cycle in geographies with tion and production of oil is a function Oil to reduce subsurface risk by seeking
proven hydrocarbon deposits, existing of this approach. Onshore oil exploration to explore in areas with previously over-
infrastructure and an established institu- involves a lower financial exposure due looked discoveries and plays using modern
tional framework. to lower drilling and development cost. techniques and with proven, conventional
It also involves lower environmental and technology.
safety risks compared to offshore drilling,
5
Tethys Oil Policy Framework
Tethys Oil holds itself to a high standard of ethical, moral and legal Tethys Oil’s management integrates sustainability and social
business conduct and expects its staff to act honestly, with integrity responsibility considerations in its decision making: during the
and in accordance with the Group’s Code of Conduct. year there was a focus on adapting the Group’s policy framework
and operating systems in light of increased operational activities.
Overview of Tethys Oil Group Policy Framework
Vision, Mission, Goals and Strategy
Code of Conduct
HSE policy Diversity policy Whistleblower policy IT policy
Anti-corruption policy Anti-fraud policy Information and insider policy
The scope of Tethys Oil’s 2020 Sustainability Report
Tethys Oil’s 2020 Sustainability Report covers its operations as con-
solidated in the 2020 Annual Report. This includes its operated
interests in Block 49 and Block 58 (a new licence acquired in 2020)
as well as the non-operated interests in Blocks 3&4 and Block 56.
Due to its limited exposure, the report does not include Tethys Oil’s
associated interest in the Lithuanian company Minijos Nafta.
All aspects of Tethys Oil’s operations are subject to its Environ-
mental, Social and Governance (ESG) policies and procedures.
Depending on the nature of the activity, the corresponding impact
and exposure will vary. One such key determinant is whether the
licence is in a production or exploration phase. Another is whether
Tethys Oil is operator or non-operator. Where Tethys Oil is opera-
tor the Group has direct control over the decision making of day-
to-day operations, whereas as non-operator the Group must work
indirectly to influence the operator in the desired way.
6
2020 in Brief: Production, Reserves and Financials
For all the challenges of 2020, Tethys Oil Group produced an average of 11,336 At the end of the year, Tethys Oil reported
came through the year very well. Tethys barrels of oil per day with lower opex 2P reserves of 26.9 million barrels, a
Oil’s asset mix improved with the addi- and a positive cash flow. Revenues and reserve replacement ratio (RRR) of 120%
tions of one new block and one farm in, other income reached MUSD 101.1, and – the ninth consecutive year with positive
and one farm out. Block 3&4 operations EBITDA MUSD 50.4 with an end of year reserves growth. The increasing reserves
showed remarkable resilience and robust- net cash balance of MUSD 55.1. and reserve life underlines the economic
ness. Despite production limitations, the sustainability of Tethys Oil’s asset base.
Net daily production from Oman, Blocks 3&4 Revenue and other income
before government take
bbl MUSD
15,000 200
12,832
11,336
12,000 150.8
150
9,000
101.1
100
6,000
50
3,000
0 0
2019 2020 2019 2020
EBITDA 2P Reserves in Oman
(million barrels of oil)
MUSD mbo
100 30
92.9
26.9
26.1
25
80
20
60
50.4
15
40
10
20
5
0 0
2019 2020 2019 2020
7
An Evolving
Sustainability
Strategy
8
As global awareness of the environmen- that demand in an economically, socially, tial efforts are therefore not only focused
tal impact of modern society increases, and environmentally responsible and sus- on understanding external stakeholders’
companies across a variety of industries tainable way, being both a respected cor- demands and expectations on the Group
face increasing demands to adapt their porate citizen and an attractive investment. but also on mapping and understanding
business models to become more sustain- the Group’s unique circumstances in rela-
able. The oil and gas industry is one of the Tethys Oil is committed to continue devel- tion to those expectations.
focal points of the ongoing energy transi- oping its sustainability strategy to keep up
tion that aims to meet the challenge of the with the rapidly evolving demands of soci- The development of an effective sustain-
world’s increasing energy needs in an envi- ety and its increased responsibilities stem- ability strategy is a long-term effort. For it
ronmentally and socially sustainable way. ming from the Group’s expanding opera- to be relevant and applicable solid founda-
tions and license portfolio. tions are critical. Nonetheless, as of 2021,
Tethys Oil has the stated objective of creat- ESG (Environment, Social and Govern-
ing shareholder value by operating across For the strategy to be effective it has to ance) is key performance indicator (KPI)
the entire oil and gas upstream lifecycle. As stem from the Group’s unique circum- included in the objectives for executive
long as there is demand for oil, Tethys Oil stances – there is no universal solution for management forming the basis for variable
intends to contribute to the satisfaction of upstream oil and gas companies. The ini- remuneration.
Tethys Oil’s pursuit for strategy
Evaluate the materiality of different
Materiality environmental or social issues and prioritise
them according to their impact on the business
Set certain ESG targets to clearly define what it
Target and strives to achieve within a certain time frame,
metric setting closely monitoring performance, and disclosing
the relevant performance metrics
Adopt commonly used reporting frameworks such as
GRI, TCFD and SASB to enhance the comparability
of the Company’s Sustainability Reports from year to
Comparability year. Creating comparable reports makes it easier for
stakeholders to evaluate the Company and to create a
common framework for the industry over time
Looking ahead – strategic commitments
• Achieve robust ESG baseline assessments The Tethys Oil sustainability strategy is an
and data across all (material) ESG issues evolving one that calls on us to be a pro-
• Define metrics that will demonstrate gressive energy partner working towards a
ESG performance and progress sustainable future.
• Provide training and develop the inter-
nal capacity to effectively implement
the ESG framework and deliver on our
commitments
9
Establishing the ESG framework
Tethys Oil’s ESG framework is inspired and reviewing of applicable sustainabil- Understanding the value of stretch tar-
by the insight and example of several ity initiatives undertaken by peers will be gets, Tethys Oil has intentionally created
international and industry best practice undertaken and where relevant integrated an ambitious framework that focuses on
codes, principles and frameworks for iden- into the framework. practical milestones including efficient
tifying and managing issues and report- responses to ESG challenges and being in
ing with the intent of being aligned with To be able to adapt our reporting with the keeping with best industry practice in ESG
good international industry practice and Global Reporting Initiative (GRI), a mate- governance.
concentrating efforts where the biggest riality assessment and process of defining
impact can be made. Ongoing scanning ESG metrics have been initiated.
Setting the baseline
For any meaningful change to take place, Scoping Report
the fundamental structure must first be in
place. In the past few years Tethys Oil has
managed to establish a reasonable knowl- Consideration of alternatives
edge of the Group baseline with the help
of external advisors and internal measure-
Project associated activities
ment exercises. This analysis has helped
determine gaps requiring further attention.
Environmental and social baseline
With each new exploration, seismic or
development project the Company in con-
junction with an environmental services
Environmental impact and mitigation measures
agency conducts a feasibility scoping report.
If the report’s conclusion is positive and
other parameters are satisfied, a compre-
hensive Environmental Impact Assessment
(EIA) is conducted.
The purpose of an EIA is to ensure the
protection and conservation of the envi- define existing biodiversity, environmental Our baseline footprint
ronment and natural resources including and other conditions near the activity sites,
human health aspects against uncontrolled using a range of analytical techniques rang-
development and enables the Company to ing from sampling to photography.
10Materiality assessment
To identify focused issues in sustainability Material assessment through a four-step process:
efforts, a materiality assessment is con-
ducted. Evaluation of potential ESG issues Definition: What is a
Material Issue?
based on their significant economic, envi- 1 – Identify
A material issue is any
ronmental and social impact, in determin- issues
topic that – in the view of
ing what matters to report upon, Tethys management or stakeholders
Oil has conducted an initial assessment – affects a company’s
that will in a second step make sure it performance significantly and
informs external opinion. They
reflects changes in our business and the
4 – Determine 2 – Prioritise tend to be issues that most
external environment. The issues identified report content issues affect value creation and the
will be evaluated and ranked according to economic and reputational
importance from the perspective’s external resilience of a company in a
stakeholders. This will be done through positive or negative way.
correspondence with external stakeholders Source: IPIECA/API/IOGP
to further prioritize the topics. 3 – Review Sustainability reporting guidance
for the oil and gas industry, 4th
and revise edition 2020.
Stakeholder engagement
Tethys Oil endeavours to promote a tion and to effectively disclose information • a global culture of social responsibil-
framework of stakeholder relations regarding the activities and businesses of ity within the Group, which will help
through: the Group, building relationships of trust improve the well-being of people,
• two-way communication on an ongoing basis. • the economic and social development
• engagement of the communities in which the Group
• collaboration Principles of Stakeholders Relations has a presence and to create sustain-
• transparency Among the corporate policies, sustainable able value for employees, shareholders
• active listening development policies, of which the Stake- and investors, customers, suppliers and
• equal treatment holder Relations Policy is one, are intended other stakeholders, in line with the Sus-
to promote: tainable Development Goals (SDGs)
This approach allows for all parties’ legiti- approved by the United Nations.
mate interests to be taken into considera-
11Sustainable
Operations
ESG considerations exist at all stages of the engaged in, and funded certain CSR activi- Due to the high aridity of the area water is
Company’s activities in varying ways. For ties to endeavour that local communities considered a valuable resource in the area,
example, environmental impact during benefit from the presence of Tethys Oil in as the ground water resources are highly
exploration and appraisal activities, such their region. saline and is the principal water source.
as on Blocks 49, 56 and 58, is minimal Biodiversity is typically poor but certain
as operations are sparse, targeted and spo- During the exploration phase the main plant and animal species are regionally
radic, whereas more detailed and broader- ESG challenges are mainly related to the endemic, with few small fishing villages
spectrum analyses are customarily required risks and disruptions caused by the seismic in the southern coastal tip of the Block.
on areas undergoing production activities, acquisition and drilling operations. Seismic The end of 2020 Tethys Oil entered into
such as on Blocks 3&4. is performed using vibrator trucks driving agreement to acquire a further 45 percent
offroad – this can cause disruption to the interest, whereby assumed operatorship of
Exploration & Appraisal surface environment and habitats. Explo- Block 56 in the Sultanate of Oman.
Block 49 ration drilling presents risks to both sur-
The Block 49 licence covers an area of face and subsurface environment with risk The principal work conducted in 2020 on
15,439 km2 located in the Dhofar Gover- of spills, water pollution, noise pollution the block was a well test programme per-
norate in the south of Oman. The block and disruption to the surface environment formed on three previously drilled wells
is sparsely populated with a majority of and natural habitats of animals. From the during the first quarter 2020.
the environment covered by gravel desert. human perspective the increase in traffic
The north western part of the Block sees the use of potential grazing and agricul- Block 58
the edge of the Rub Al-Khali desert, also tural land can present to be a threat to the Tethys Oil was awarded the licence, in July
known as the Empty Quarter where the local community’s livelihood. Based on 2020 as operator holding 100 percent.
desert is largely made up of sand dunes. EIA recommendations, Tethys Oil strive to Block 58 is located in the Dhofar Gov-
Tethys Oil entered into the licence for the minimize potential impact by identifying ernorate in the southern part of Oman
block at the end of 2017 as operator and and implementing suitable measures at all adjacent to Tethys Oil’s operated explora-
100 percent interest holder. stages of the Company’s activities. tion licence Block 49 and covers an area
of 4,557 km2.
Since entering into the licence on-block In November 2020, Tethys Oil reached
operations have included field studies by an agreement with EOG Resources Inc. Block 58 straddles the western flank of the
Tethys Oil’s G&G team, planning and (“EOG”) to farm out 50 percent of the South Oman Salt Basin and the Western
execution of seismic acquisition and in working interest in the EPSA. The transac- Deformation Front, as the area is normally
2020 preparations ahead of spudding the tion was finalised and completed in March characterised by vacant desert. The physi-
Thameen-1 exploration well. The main 2021. cal environment is typical of south-west
activities in 2020 involved civil works in Oman and comprises rocky desert with
the preparation of the drill site including The work programme for 2021 includes varying areas of sandy dunes. These areas
drilling of water supply wells, construction completion of drilling and testing opera- are sparsely vegetated and land use is lim-
of roads, drill pad, and camp site. Drilling tions of the Thameen-1 well. ited to dispersed agricultural activities and
operations on the Thameen-1 exploration livestock farming.
well commenced on the 31 December Block 56
2020. Tethys Oil entered into the licence at the A review of legacy seismic 3D data was
end of 2019 as a non-operator with a 20 conducted in the fourth quarter 2020. No
ESG-related activities on the block have percent interest. Block 56 covers an area other on-block operations were conducted
throughout the years included two sepa- of 5,808 km2 in the south-eastern part of during 2020.
rate EIAs ahead of the seismic acquisi- Oman some 200 km south of Blocks 3&4.
tion in 2018 and the exploration well in The block lies at the intersection of differ- The 2021 work programme consists mainly
2020. The Company has also developed ent geological provinces including the pro- of reprocessing of legacy 3D seismic data
community relations on both the local lific South Oman Salt Basin and is charac- and conducting a new 3D seismic acquisi-
and regional level as outlined on page 22, terised by flat rocky, sandy and salt plains. tion. In 2021 Tethys Oil plans to expand
12its ESG programme and commitments to as the consumption of diesel for power The impact assessment methodology is
include Block 58 including conducting generation. More of this is outlined in the determined using five main components:
an EIA ahead of seismic acquisition and Section Environment and Emissions on
establishing relations with the relevant page 16. • Size & severity (geographical scale and
regional and local stakeholders. pathway of disturbance)
During the year, the rigorous testing and • Importance & value (ability to disrupt
Production quarantining procedures to mitigate the environmental and social function);
Blocks 3&4 (non-operated interest) spread of the coronavirus at operating • Sensitivity (degree that environmental
Blocks 3&4 in south-eastern part of Oman facilities have been in place. and social functions change);
covers an area of 29,130 km2. The Com- • Timeframe (period that is directly and/
pany holds a 30 percent non-operated Focus has primarily been on reducing or indirectly affected); and
interest. Tethys Oil has held an interest emission by gas utilization projects, a wide • Reversibility (ability to be undone so
in the blocks since 2007, and production range of community engagement activities that the pre-existing conditions are
operations have been ongoing since 2010. and implementing measures to ensure staff restored).
health and safety. The work programme
The oil in Blocks 3&4 is produced from for 2021 includes continuing development Block 49 has previously undergone explo-
several fields; Farha South, Saiwan East, drilling, upgrading infrastructure with ration drilling; including the first well
Shahd, Ulfa, Samha and Erfan. The major- focus on asset integrity, continuing the drilled in Oman (Dauka-1 in 1955).
ity has been developed with water injected gas utilization project and the drilling of
into the reservoir via injection wells to exploration wells. Potential project emissions could arise
maintain pressure and thereby stimulate from the following sources:
production. Full production facilities have Main exploration activity during
been constructed both on Farha South 2020 • Diesel fuel consumption by the genera-
field and on Saiwan East field. At these Insight Case – Thameen Exploratory tors at the drilling and camp sites for
facilities, reservoir fluids are processed in Drilling, Block 49 power generation and by mobile sources
separators and heater treaters to remove The project area, which is located within (e.g. construction equipment, trucks
water, gas and impurities in order to make the northern portion of Block 49, is 6,188 delivering equipment/materials to the
the oil ready for export. The facilities also km2 and the landscape is typically arid and site, trucks collecting wastes/sewage
include large storage tanks, pumps and homogenous with areas of small to rela- wastewater from the site);
other necessary infrastructure, including tively large dunes. • Down-hole gas from the drilled forma-
field camps for the oil field workers. tions coming to the surface with return-
The near-term aim of the project is to ing drilling mud;
In addition, Early Production Facilities determine hydrocarbon presence, reservoir • Fugitive emissions from mud materials
(EPF) have been constructed on Shahd performance and productivity to define breakdown and evaporation, which may
and on Ulfa fields. An EPF is a smaller and maximize recovery of the hydrocarbon lead to odors;
production facility, which, to some extent resources present within the project area. • Other fugitive emissions from cooling
relies on the infrastructure at the Saiwan Anticipated activities include: systems, handling and storage of chemi-
East field to process the oil to be ready cals (e.g. paints, solvents), fuel loading
for export. All production is transported • Drilling of one (1) exploratory well and storage systems (tanks, pipes); and
through pipelines to the main exporting • Well testing • Flaring – (If required)
point at the Saiwan East facility. From Sai-
wan East, the oil is pumped through an 83 The development of a hydrocarbon well Project controls for avoiding, reducing,
km long 16-inch pipeline to Alam Station typically follows a logical sequence of and restoring potential negative impacts
just west of Blocks 3&4, for further trans- events that starts with the drilling of the and ensuring that positive impact materials
portation through the national pipeline exploration well, testing and appraising are maximized and inherent to the basis of
system to the export port in Muscat, the the reservoir formation or formations, and the impact assessment. All mitigation and
Mina Al Fahal Terminal. ultimately being “hooked up” and put into management measures recommended by
production or suspended until a later date. the EIA have been accepted by Tethys Oil
Blocks 3&4 have an active Health, Safety and are integrated into the project design.
and Environment (HSE) programme man- The environmental, social and health
aged by the operator focused on health and baseline condition of the Project Area was The preparation work for the exploratory
safety issues as well as emission reduction determined through field investigations as drill was conducted during 2020. The Tha-
and spill prevention plans. One of the pri- well as through the review of available lit- meen-1 well was spudded on 31 December
mary environmental challenges for Blocks erature and past data collection from previ- and on 1 March 2021 it was announced
3&4 is the reduction of emissions resulting ous assessments conducted for the seismic that the well had reached its final depth.
from the flaring of associated gas as well acquisition in 2018.
13Performance
Metrics
14Climate-related performance metrics have continues to improve both the reduction Metrics Overview
been included in the Company’s reporting of emissions intensity and the transpar- This framework centers around five key
since it began reporting on sustainability ency of reporting. The data is recorded metrics groupings in promoting more
matters. Measuring the emissions profile by third party Environmental Monitoring consistent reporting – Greenhouse Gas
provides visibility into which cost-efficient & Auditing Agency for Environmental (GHG), Flaring, Spills, Water Use, and
measures are most effective in reducing Performance. Safety.
the Company footprint. The Company
The following provides a high-level overview of each of these metrics' groupings.
Tethys Oil's net share of Blocks 3&4 in Oman
Metric 1: Greenhouse Gas Emissions (Scope 1)* 2020 2019
GHG Emissions (metrics tons CO2e) 154,987 177,188
GHG Intensity – (GHG Emissions / Gross Annual Production (boe)) Kg per bbl produce 37.5 37.8
Methane Emissions (Metric tons CH4) 149.9 4.3
Methane Intensity – (Methane Emissions (Metric tons CH4)/Gross Annual Production (Mboe)) Kg per bbl produced 0.04 0.00
Nitrous Oxide (Metric Tons N2O) 0.48 0.40
Metric 2: Flaring
Gross Annual Volume of Flared or Vented Gas (Mcf) 2,260,944 2,721,274
Volume of gas flared per barrel of oil equivalent produced
(Gross Annual Volume of Flared Gas (Mcf)/Gross Annual Production (boe)) 0.50 0.53
Metric 3: Liquid Hydrocarbon Spills
Number of Spills > 1 Barrel 8 4
Spill Intensity (Produced Liquids Spilled (bbl)/Total Produced Liquids (Mbbl)) 0.02 0.06
Metric 4: Water Use
Utility Water Use (m³) 2,156 1,152
Non-Fresh Water consumption intensity bbl/boe 0.93 0.99
Fresh Water Intensity (bbl/boe) 0.3% 0.3%
Total Produced Water (m³) 665,784 807,264
Water Recycle Rate (Recycled Water (bbl)/Total Produced Water (bbl)) 84% 86%
Metric 5: Safety
Fatalities – –
Lost Time Incidents 3 2
Traffic Accidents 1 3
Total Recordable Cases 4 4
Total Recordable Cases Frequency (#/mm Hrs) 0.63 0.49
Lost Time Incident Frequency (#/mm Hrs) 0.47 0.24
Road Traffic Accident Frequency (#/mm km) 0.07 0.15
* Scope 1 – Greenhouse Gas (GHG) Protocol refers to emissions that are directly emitted by or controlled by the company at the non-operated producing fields in Oman. Emissions related
to purchased electricity are Scope 2 emissions and are not included. Emissions from company owned or leased fleet vehicles are not included.
15Environment
and
Emissions
16Tethys Oil has a stated ambition to explore for and produce oil and gas with minimal
environmental impact. This ambition is intermeshed with the Company’s operations on
exploration licenses Blocks 49, 56 and 58. With respect to its non-operated licence for
Blocks 3&4, Tethys Oil has supported the operator’s efforts in improving its environ-
mental focus in operations and proactive work to minimise environmental impact, not
least the risks for spills and damage.
Air emissions
In 2020 all of the Group’s material atmospheric emissions were generated by its inter-
est in the production operations on Blocks 3&4 where the main sources of emissions
arise from the flaring of associated gas produced in conjunction with the recovery of
oil and the use of diesel-run power generators used to power production facilities,
camps, downhole pumps and drilling rigs. In addition to flaring the produced gas, gas
has been, on a smaller scale, been used for power generation within the facility camps
replacing some diesel generated power.
Tethys Oil’s share of atmospheric emissions from its 30 percent interest in Blocks 3&4:
Total Emission (tonnes) 2020 2019 2018 2017
Carbon Dioxide CO2 151,096 176,959 93,302 101,700
Methane CH4 149.9 4.3 892.0 982.0
Nitrous Oxide N2O 0.5 0.4 2.0 2.0
Total GHG Emission CO2e 154,987 177,186 116,198 126,846
GHG Intensity (kg per bbl produced) 37.5 37.8 27.1 28.6
Carbon Intensity (kg per bbl produced) 37.5 37.8 21.7 22.9
Methane Intensity (kg per bbl produced) 0.036 0.001 0.207 0.221
2%
18%
GHG Emission
by source
80% ■ Diesel fuel stationary
and mobile sources
■ Flaring
■ Cold venting
Total atmospheric emissions decreased in 2020 as a result of reduced production fol-
lowing OPEC+ mandated production limitation guidelines. Total carbon intensity
(37.5kg per bbl produced) remained at the same level year over year due to continued
significant production from fields with high gas to oil ratio (GOR).
17CO2 Emissions declined with
14.6% in 2020 compared with the 1 x – carbon dioxide (CO2)
previous year
The main GHGs included in the GHG
inventory calculations are carbon dioxide
(CO2), methane (CH4) and nitrous oxide
(N2O). Each of the GHG components
has a global warming potential (GWP)
assigned to it by the United Nations Frame- 25 x 298 x
work Convention on Climate Change – methane (CH4) – – nitrous oxide (N2O) –
(UNFCCC) for use in its GHG reporting Releasing 1 kg of CH4 Releasing 1 kg of N2O
into the atmosphere is into the atmosphere is
programs. The volume of each component
equivalent to releasing equivalent to releasing
gas — multiplied by its GWP — results in about 25 kg of CO2 about 298 kg of CO2
a calculated value of carbon dioxide equiva-
lents (CO2e) for that component.
Gas Flaring Mitigation Technology
and Solutions 0.48 tonnes N2O x 298 GWP = 143 Tonnes CO2e
Flaring and venting are a substantial source 149.9 tonnes CH4 x 25 GWP = 3,748 tonnes CO2e
151,096 tonnes CO2 x 1 GWP = 151,096 tonnes CO2e
of GHG emissions from oil fields. Flaring
Total GHG Emissions = 154,987 Tonnes CO2e
refers to disposal of associated gas produced
during extraction through burning. Venting
refers to intentional releases of gas, includ- operators coordinate their efforts in find- gas by exporting it to the Omani gas net-
ing the amount of gas unburned in flaring. ing solutions to reduce flaring. Tethys Oil work for commercial use. However, in
has been a participant in the task force light of the volumes available, current mar-
The Sultanate of Oman is committed to since its inception in 2018. ket prices, and the significant investments
the World Bank initiative Global Gas Flar- involved this is not viewed as a viable
ing Reduction Partnership (GGFR) and its In the past few years, the Blocks 3&4 part- option. A more cost-efficient option would
goal of “Zero routine flaring by 2030”. As nership has been studying several alterna- be to utilize the gas for local power gen-
part of this effort the Ministry of Energy tives for reducing the routine flaring and eration with permanent facilities and thus
and Minerals (MEM) hosts the Oman Gas related emissions. One of the alternatives reducing the dependence on diesel genera-
Flaring Reduction Task Force in which considered has included monetising the tors and decreasing the related emissions.
Flare to power
The challenge
The Solution
The biggest technical challenge would be
the treatment of the gas. The flare held Diesel decentralised power that was
The Impact
condensates and was too hot to be fed replaced with centralised power with
directly into a gas engine, so a bespoke bespoke gas treatment and custom Reduced environmental impact,
engineered solution was required. designed central control system significant cost savings
Instead of flaring gas, a small-scale gas- owing to the reduction in diesel consump- sions, reduced related noise and reduce the
to-power project was set up in one of the tion for power generation. operational footprint by replacing diesel-
fields to generate electricity for the camps, only engines with dual fuel motors that
the electric submersible pumps of some of Another project has been to reduce the run on diesel or gas. By assessing each oil
the wells, and other facilities. This initia- use of diesel-powered generators to drive field’s asset integrity, the Company is striv-
tive is making a significant environmental drilling rigs, which can be a significant ing to find solutions which aim to reduce
contribution, as well as a financial impact source of emissions. Actions have been its environmental footprint.
taken in a pilot project to cut those emis-
18Water use
Water is both a key aspect of the business salinity water, making it not even suitable • Discharged to lined evaporation ponds
and critical to the communities where for agricultural purposes. All water used in permitted by EA, to evaporate; or
the Company operates. Groundwater the operations are non-fresh water. How- • Treated and reinject into the ground res-
resources are scarce in Oman and in par- ever, the produced water is handled under ervoir to enhance the oil field production.
ticular in the concession area. The ground- environmental authority (EA) permits
water resources are primarily high-level through:
Total water usage on Blocks 3&4:
(cubic meters) 2020 2019 2018 2017
Total Produced Water 2,219,280 2,690,881 2,182,474 1,465,208
Produced Water – reinjected 1,864,280 2,304,675 1,900,904 1,313,289
Produced Water – evaporated 346,219 343,451 303,008 154,088
Regular lab sample analysis is conducted
on the produced water from the discharge
end of disposal pumps. The produced
water contains in average within the
concession area roughly 250 times more 84%
Total Dissolved Solids than what is con-
sidered by the U.S. Geological Survey or Water Recycle Rate
IPIECA defines as “Fresh Water”. Due to ■ Produced water – reinjected
the extreme high salinity levels of the brine ■ Produced water – evaporated
water, the treatment for other application
areas is limited, therefore the main volume
of the produced water is re-injected into 16%
the reservoir via injection wells to maintain
reservoir pressure and thereby stimulate
oil well production. However, the Group
is further exploring if there are advance-
ments in water treatment and desalination
technology to find other applicable usages. Note: Recycled Water includes water that was produced in the oil field and reused in the oil field
Fresh Water Non-fresh Water Produced Water Recycled Water
Water sources with a total dissolved Water sources not meeting the Non-fresh water found in Produced water that has been treated
solids concentration of up to 2,000 definition of fresh water. These hydrocarbon formations that is for reuse in subsequent operations,
milligrams per litre.* These sources sources could include produced brought to the surface during the including well completions or
can include drinking water, potable water and saline groundwater. oil and gas production process secondary recovery
water and water used in agriculture.
* Based on IPIECA’s Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (2015).
Spill prevention
While most of recorded incidents of of leaks. All oil spills are recorded, and * Calculation: Produced Liquid Spills (bbls) /
Total Produced Liquid (1,000 bbls)
unplanned hydrocarbon releases in 2020 regular site surveys are conducted by third
Produced Liquid Spilled (bbls): crude oil, condensate
are considered minor, the number of Tier party environmental service agency, that and/or produced water spills ≥ 1 bbl which are not
confined to impermeable secondary containment
1 hydrocarbon releases (more than 1 bar- provides recommendations on how these
Total Produced Liquid (1,000 bbls): crude oil,
rel of oil spilled) was 8 recorded incidents. issues might be mitigated. condensate and produced water generated from
exploration and production activities (does not
The minor releases have been identified
include gas).
in relations to the facility plants in terms The spill ratio* is less than 0.2 per mille (‰)
19People
and Society
20Our people
Tethys Oil recognises that its performance Tethys Oil’s Position on Diversity Tethys Oil’s employees shall always act
as a company is dependent upon the per- and Discrimination with the utmost integrity and respect
formance of its employees as individuals. • Tethys Oil seeks to recruit and retain the when dealing with colleagues, partners and
The Group’s employees are its principle best possible candidates for all positions society.
asset and therefore aims to achieve high on the basis of merit regardless of gen-
employee satisfaction and high standards der, sexual orientation, age, disability, During 2020, Tethys Oil had an average
of performance. Tethys Oil shall respect nationality, race or religion. of 23 full-time employees of seven nation-
and promote its employee’s rights, includ- • The cultural diversity of the Group’s alities, in a broad age range, of which 36
ing freedom of association and the right employees is an asset and shall be percent were female and 64 percent male.
to collective bargaining. Tethys Oil shall respected. Furthermore, Tethys Oil will A majority of the staff have graduated
offer rewarding working conditions and not accept any form of harassment or from universities and colleges, primarily
realise each employee’s individual potential discrimination of its employees for any with geosciences, engineering or business
through training and job promotion. The reason. administration.
use of underaged bonded or forced labour, • Tethys Oil’s staff shall always act with the
direct or indirect should never occur. utmost integrity and respect when deal-
ing with colleagues, partners and society.
Tethys Oil has implemented a diversity • Tethys Oil’s employees, partners and
and non-discrimination policy to ensure contractors should feel free to voice
that the diversity of its staff is respected concern or report instances of discrimi-
and that all forms of discrimination are nation without fear of recrimination or
prevented. harassment.
Human rights
Tethys Oil has committed firmly to the The Group recognises the importance of labour or bonded and forced labour is lim-
United Nations Global Compact (stated respecting the rights of local communi- ited. There are potential risks in the use of
further in the Code of Conduct), and ties, and thus prior to any new investment subcontractors in some cases but Tethys
adheres to the United Nations Guiding or operational activity, it analyses poten- Oil’s stringent policies and the transparent
Principles on Business and Human Rights. tial impacts on human rights. While the process for procurement minimises any
Group respects all human rights, it focuses such risks.
The Group has made a commitment to primarily on those human rights that
support internationally recognised human potentially may be most impacted by its From a wider perspective, Tethys Oil seeks
rights wherever it operates. Human Rights operations. Typically, those most impacted to minimise the risk of Human Rights vio-
are to be understood as those referred to are the populations and communities in lations as a result of its business by strictly
in the Universal Declaration of Human the countries where Tethys Oil is active or implementing its code of conduct in all
Rights (UDHR), the International Cov- within its license areas where it operates. aspects of its dealings.
enant on Civil and Political Rights and
the International Covenant on Eco- The Group furthermore expects all its No human rights-related grievances were
nomic, Social and Cultural Rights and in affiliated partners to respect human rights filed against the Company in 2020. There
the International Labour Organisation’s and to observe highest standards of profes- were no recorded incidents of discrimina-
(ILO) Conventions, and in relations to sional integrity. tion at Tethys Oil’s operations during the
business activities, in the Global Com- reporting period.
pact, the OECD Guidelines for Multina- The nature of Tethys Oil’s operations as a
tional Enterprises, and the UN Guiding highly skilled upstream oil and gas opera-
Principles. tor in Oman means that the risk for child
21Community engagement
Tethys Oil’s activities shall strive to create that the Group’s operations disrupt the Corporate Social Responsibility
shared prosperity between stakeholders. livelihood of the local population and has process
It seeks to respect and gain the respect of a detrimental effect on their quality of life. To meet the need for Tethys Oil to main-
the people and governments of countries tain and further build on its reputation as
in which it operates. Good relations with Local people and their traditions are a responsible corporate citizen in Oman
host countries are prerequisites to Tethys respected. Tethys Oil strives to encourage among stakeholders at national and local
Oil’s business. Wherever operations are local employment and, where appropriate, community levels, the Company adheres
conducted, the sovereignty of the state work with local communities to improve to the following:
is respected and the rule of law is to be their health, skills and welfare. Tethys Oil
observed and promoted. endeavours, where appropriate, to engage • Seek to avoid or minimise the negative
in capacity building, through the transfer impacts of our activities
The Group aims to optimise local content of skills and technologies. Tethys Oil shall • Endeavour to ensure neighbouring com-
in all aspects of its business and to promote refrain from any implications in tribal, munities benefit from our presence
the creation of in-country value. internal, or other armed conflicts or acts • Strive to create and deliver opportunities
of violence. that maximise benefits to society
The Group is committed to achieving a • Listen to and engage with communi-
beneficial impact on its host communities Tethys Oil’s Corporate Social Respon- ties in the area of operation through the
by engaging in a dialogue with the Group’s sibility (CSR) activities are focused and Government representatives in area in
stakeholders, whether these are local com- conducted in-country. In Oman they order to comply with rules and regula-
munities or relevant interest groups, such as are headed by the Director of Corporate tions adopted in the tribal system
local governments and civil society. Tethys Affairs.
Oil engages in an active relationship with
stakeholders in order to understand the In addition to non-profit partnerships,
concerns surrounding the Group’s opera- Tethys Oil has dedicated local team mem-
tions and to set mutually beneficial goals. bers focused on listening and responding
This is to ensure local stakeholders needs to community concerns in the operating
and priorities are considered and avoid areas.
CSR activities
Tethys Oil’s CSR activities in 2020 were Going forward CSR activities will be Academic scholarships
principally focused on Oman, as it is the organised from a national, regional and During 2020 Tethys Oil sponsored MSc
core area of operations and with the addi- local perspectives in order to work effi- thesis in Geoscience for three students at
tion of license interests in Blocks 56 and ciently across the whole portfolio of blocks the Sultan Qaboos University. Two stu-
58 the need for systematic community and leverage on recent years’ experience. dents successfully graduated during the
engagement has only grown. year. The third student will continue her
The main activities in 2020 were: MSc thesis in Geoscience throughout
In 2020 Tethys Oil’s CSR activities were • Continued Block 49 stakeholder 2021.
organized around executing CSR initia- engagement
tives on Block 49, as well as its participa- • The execution of a comprehensive CSR Additionally, a two-year scholarship pro-
tion in the CSR program for Blocks 3&4. program for Block 49 gram was created for two students from
Due to the Covid 19 pandemic and its • Continued engagement in the govern- the Wilayets of Maqshin and Thumraite in
resulting restrictions on meetings and ance of Block 3&4 CSR activities the Governorate of Dhofar who belong to
movement, community engagement was • Selective CSR Projects families on Social Security or Low-income
more limited than planned and unfortu- • Master in Geoscience Scholarships schemes to obtain diploma in Business
nately some of the scheduled activities had from University of Dhofar.
to be postponed.
22Block 49 Blocks 3&4
The Company has been included in a con- students, teachers and staff during the The Blocks 3&4 joint venture partnership
tinuous dialogue with all key stakeholders academic year of 2020 in line with the has an active Corporate Social Responsi-
relating to Block 49 on a national, regional measures adopted to limit and con- bility (CSR) programme. Its CSR expendi-
and local level. This includes several minis- trol the impact of Covid-19. Students ture in 2020 was just over MUSD 1.
tries, the Royal Omani Police, the military, from grades 5 to 12 in the Wilayat of
the Governorate of Dhofar and the Wilay- Maqshin were provided with 97 Tablets The following details some of the com-
ats of Maqshin and Thumrait. to facilitate distance learning munity engagement projects collectively
• Sponsored several competitions at Dho- undertaken with or by the partners in
The Block 49 CSR program was developed far University under the themes: Vol- Blocks 3&4:
and established with focus areas on provid- unteerism During Covid-19 Pandemic,
ing education and training opportunities Arabic Language and Computer Coding Community Development projects
for the local population through scholar- • Sponsored several civil works at the contributions
ships, contributing to sustainable develop- village of Marsudad related to safety • Fruits and Vegetable Market in Adam
ment of the local economy and minimis- at RO-tank supplying the village with • Livestock market in Adam
ing any potential negative effects of Tethys water • Job Security Fund
Oil’s operations. It is of vital importance to • Sponsored a follow-up on an archaeo- • Fish Market in Mahout
maintain support from the local commu- logical assessment in Block 49 to explore
nity in order for Tethys Oil and its subcon- the lithic typological and technological Other national HSE related contribu-
tractors to operate efficiently and safely. If characteristics of the surface assem- tions was undertaken in collaboration
Tethys Oil is to operate with the support of blages, as well as to assess the archaeo- with:
the local community, the community must logical sensitivity of the landscape • Muscat University – Social Impact cam-
also perceive to benefit from Tethys Oil’s • Honoured 240 students from four paign “Building Awareness of Digital
investments. Below outlines a selection of Wilayats in Dhofar region for their Benefits”
the CSR activities Tethys Oil was engaged outstanding academic achievements • Ministry of Health – Covid-19 Fund
in during 2020: and performance in school competition • Ministry of Health – Oman Cancer
events Association
• Assisted the village of Marsudadin the • Sponsored a multimedia design com- • Ministry of Higher Education – Study
Wilayat of Maqshin to build a play- petition for students during Arab and on “Convalescent plasma in the treat-
ground for children with appropriate International Water Days which was ment of Coronavirus Disease
HSE requirements planned to be held in Salalah in March
• Supported the Ministry of Education 2020 but postponed until 2021 due to
in their efforts to ensure the safety of Covid-19 situation
23Health
and
Safety
24Tethys Oil’s activities are subject to the to people, no accidents, no spills and to Blocks 3&4 Health and Safety
health, safety and environmental (HSE) strive for minimum impact on the envi- 2020 saw the same number of Total
risks inherent in the oil industry. The ronment, thereby contributing to sustain- Recordable Cases (TRC) as in 2019, how-
Group recognises that the prevention of able development. ever the frequency in relation to worked
accidents and ill health is critical to the hours increased which requires further
efficient operation of its business and Tethys Oil is committed to ensuring that investigation and action. On a positive
therefore has established an HSE policy all operations that the Group conducts note there was a substantial decrease in
with accompanying corporate procedures. are done in a safe manner with genuine Road Traffic Accidents(RTA), both in
The ultimate responsibility for HSE lies regard for the wellbeing of the staff, con- absolute terms and in frequency, which is
with the Managing Director. It is, however, tractors and third parties. Through foster- very positive.
the responsibility of all Tethys Oil staff to ing a culture of transparent decision mak-
ensure compliance with the Group’s stand- ing, responsibility and thorough planning, The Company works with concepts such
ards for safe operations. Tethys Oil strives to create a safe, accident- as Behavioural Based Safety to improve
free work environment. This applies not attitudes and encourage hazard recogni-
Tethys Oil has a responsibility for all only to Tethys Oil’s operations, but Group tion and incident reporting. This has been
activities that are a consequence of its representatives should work to ensure that done by increased training, monitoring,
operations. the same standards are applied in all pro- and review as well as improved incentives.
jects and joint ventures where the Group This form of training development is a top
At a minimum, it is Tethys Oil’s duty to has an interest. priority to further improve the health and
ensure compliance with all relevant laws safety culture and awareness beyond its
and governmental regulations and direc- In 2020, Tethys Oil continued to operations.
tions concerning HSE. strengthen its HSE capabilities and pre-
paredness by executing risk assessments Regarding Lost Time Incidents (LTI) the
The genuine care for HSE is a core value and risk mitigation plans for the ongoing joint venture had 3 minor incidents of
for the Group and shall be transparent activities in Block 49. In preparation for which one of them required medical treat-
through all Tethys Oil’s plans and actions. the exploration drilling, an emergency ment during the last months of the year.
It is the Group’s objective to provide a response plan was prepared in case of acci- Due to the Covid-19 social restriction and
healthy and safe working environment for dents. One Tethys Oil HSE staff member physical interaction recommendations,
employees, contract personnel and mem- has been seconded to CCED during the there were limited safety training courses
bers of the general public who might be year to both learn from and follow the this year. As the pandemic situation
affected by its activities. The Group is operator’s HSE work, both in the office improves, Tethys Oil will seek to maintain
implementing a systematic approach to and the field. General HSE training and an overriding focus on occupational health
HSE-management to achieve continuous awareness sessions have been conducted and safety.
improvement toward the goal of no harm during the year for all staff in Oman.
Blocks 3&4
Unit of measure 2020 2019 2018 2017
Fatalities (Number) 0 0 0 1
Lost Time Incidents (Number) 3 2 2 5
Lost Time Incident Frequency (#/mm Hrs) 0.47 0.24 0.28 0.94
Total Recordable Cases (Number) 4 4 10 8
Total Recordable Cases Frequency (#/mm Hrs) 0.63 0.49 1.42 1.51
Total Traffic Accidents (Number) 1 3 4 4
Total Traffic Accidents Frequency (#/mm km) 0.07 0.15 0.25 0.34
#/mm Hrs – number of cases/incidents per million worked hours
#/mm Km – number of accidents per million kilometres driven
Lost time incidents – The sum of fatalities and injuries where the impacted person is unable to return to work the day (or days) after the injury.
Total Recordable Cases – The Total number of incidents reported including Lost Time Incidents and more minor incidents which include restricted work capacity and medical treatment.
25Governance
and
Ethics
26Anti-corruption
Tethys Oil has zero tolerance for corrup- power in relation to business, Tethys Oil local business practice in the region that it
tion. It is strictly prohibited for Tethys Oil has adopted an anti-corruption policy and operates. As a result of this, Tethys Oil has
staff or contractors to give, authorise, offer, clear procedures for employees to report implemented a policy requiring all staff, or
promise, request, agree or receive gifts, suspected cases of corruption. The policy contractors who receive or offer gifts on
hospitality and entertainment to improp- and procedures have been drawn up in behalf of Tethys Oil should seek approval
erly influence or reward acts or decisions, accordance with Transparency Interna- from their supervising manager and that a
or as an actual or intended compensation tional’s Business Principles for Countering record is kept of donor, recipient as well
for any improper benefit. Bribery. as value.
In order to prevent the misuse of pub- Tethys Oil recognises that accepting or To date, Tethys Oil has not had any reports
lic office or company position or power offering gifts or hospitality of moderate of involvement in corruption or suspected
for private gain, or the misuse of private value is customary and in accordance with corrupt activity.
Anti-fraud and protection of Group assets
Tethys Oil has strict anti-fraud policies, the misstatement of financial records to ing an atmosphere of openness and trust
aimed at safeguarding the Group and its conceal theft or misuse.” where staff feel comfortable and able to
staff from fraud and dishonest behaviour. raise concerns openly and without the risk
For the purposes of the policy Tethys Oil The policy is aimed at improving all Tethys of repercussions.
has defined fraud as: Oil staff’s knowledge and understanding
of what constitutes fraud, how to prevent, No suspected cases of fraud have been
“The theft or misuse of Tethys Oil’s funds detect and report suspected fraud and reported in 2020.
or other resources, by an employee or a where the responsibilities for investigation
third party which may or may not involve lies. The policy also aims to assist in creat-
Whistle blower
Employees are encouraged to report sus- function is to provide an avenue for staff There have been no incidents or activities
pected or known cases, which they believe to raise concerns about improper, unethi- reported through the whistle blower func-
may be illegal or a violation of the Group’s cal or illegal conduct and to obtain reas- tion during 2020.
Code of Conduct or any Group policies surance that they will be protected from
and as a result Tethys Oil has implemented reprisals or victimisation for whistleblow-
a Whistle blower Policy. The aim of the ing in good faith.
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