East Timor’s upstream licensing round disappoints

Solely 5 blocks out of 18 blocks provided in East Timor’s second licensing spherical have been awarded. East Timor’s Nationwide Petroleum and Minerals Authority (ANPM) mentioned that it has awarded three onshore blocks and two offshore blocks.

Australia’s Santos, which operates East Timor’s solely producing area Bayu Undan, gained offshore Block R, close to the Kitan, Buffalo and Bayu-Undan fields. Whereas Bayu Undan associate, Eni of Italy, acquired offshore Block P, which is near the Higher Dawn fields.

East Timor’s nationwide oil firm Timor Hole gained onshore Block A, whereas Esperanca Timor Oan (ETO), a Timorese firm, secured the rights to onshore Block B, and HTS Exploration of Kazakhstan was awarded onshore Block F.

9 bids had been submitted from seven corporations for the six blocks awarded.

“The outcomes appear disappointing even with Eni and Santos doing their responsibility, particularly given the trouble out into promotion world wide,” an trade knowledgeable that has studied East Timor’s geology instructed Vitality Voice.

Considerably, Australia’s Santos and Italy’s Eni are investigating choices to re-purpose the Bayu Undan services to increase the lifetime of the mission, together with a carbon seize and storage (CCS) scheme to retailer carbon dioxide (CO2) from fields in close by Australian waters. Given the pair’s bold plan for the world’s largest carbon storage facility offshore East Timor, which requires good relations with East Timor’s authorities, it could have been stunning if they’d not supported the upstream licensing spherical.

Nonetheless, regardless of the lackluster outcomes, the entry of “new events to exploration within the area is to be applauded,” Simon Molyneux, managing director at Perth-based upstream consultancy Molyneux Advisors, instructed Vitality Voice.

He added that the bidding spherical confronted challenges. “I count on that COVID, journey restrictions and strategic modifications in funding priorities all contributed to a muted response to this spherical.”

“There was remark within the exploration neighborhood that the fiscal phrases had been out of step with the prospectivity, danger urge for food of the trade, and challenges of improvement,” mentioned Molyneux.

Santos and Eni’s bids gave the impression to be aimed toward “securing the peripheral alternative to present useful resource and potential CCS developments,” he added.

Molyneux additionally famous that it was “nice to see competitors” for onshore Block F, awarded to HTS and that “it is going to be attention-grabbing to see what occurs subsequent.”

Nonetheless, the trade knowledgeable that has studied East Timor’s geology, who wished to stay nameless, was much less optimistic on the nation’s exploration prospects. “Onshore is all the time going to be troublesome discovering something industrial. Whereas offshore, the Timor Trough, which presents a bodily barrier to the proposed onshore processing initiatives East Timor craves, is just not going to assist any offshore improvement,” mentioned the supply.

In the meantime “the shallow water areas have been given a good going over, though it’s attainable there’s something to be discovered within the Flamingo Trough. Deep waters south of Timor and north of the Timor Trough might be attention-grabbing, however will probably be technically difficult and costly, so that’s unlikely,” added the supply.

Plucky explorer Timor Sources is at the moment exploring onshore East Timor, which is also called Timor Leste. In March, the corporate mentioned it had encountered “hydrocarbon exhibits of significance” whereas drilling its second properly onshore East Timor. The corporate is contemplating an preliminary public providing (IPO) to lift extra funds in its quest to unlock the nation’s petroleum potential. Considerably, there are not any agency figures for the hydrocarbon exhibits but, however loads of hope.

In January, outcomes from the extremely anticipated Buffalo-10 properly drilled by Carnarvon Vitality and Advance Vitality offshore East Timor upset.

Elsewhere, Sunda Fuel is busy finishing numerous research that might result in the industrial improvement of the shallow-water Chuditch gasoline discovery offshore East Timor. The corporate is reprocessing previous seismic knowledge and hopes to ultimately drill an appraisal properly.