The company said it started drilling operations in the offshore reserves of the El Mediouni-1 exploration well. The company said the well is located in areas already producing oil and natural gas. Its primary target is dubbed the Birsa Sands.
Circle Oil said Monday it estimates there may be as much as 46 million barrels of oil in the prospect, which it says is "substantially larger" than the recoverable commercial threshold of 10 million barrels of oil.
Drilling operations in the company's first-ever offshore well should take as long as seven weeks, it said.
Tunisian oil production has declined steadily since reaching a peak of 120,000 barrels of oil per day. A 2014 report from the U.S. Energy Information Administration estimates Tunisia has "significant" formations of oil in shale deposits, with recoverable reserves of as much as 1.5 billion barrels.