Caramelize the Onions: In a large skillet, warm the olive oil and butter over medium heat. Add sliced onions and sugar, stirring frequently, until onions are very soft and caramelized, about 25-30 minutes.
Prepare the Rice Mixture: In a greased 9×13-inch baking dish, combine the uncooked rice, beef consommé, French onion soup, water, thyme, salt, and pepper. Stir to mix.
Layer and Bake: Once the onions are caramelized, spread them evenly over the rice mixture. Cover the dish tightly with foil and bake at 425°F (220°C) for 30 minutes.
Continue Baking Uncovered: Remove the foil, stir the rice, and bake uncovered for an additional 30 minutes, or until the rice is tender and has absorbed the liquid.
Serve: Let the rice stand for 5 minutes, then fluff with a fork. Garnish with fresh thyme or parsley if desired.