On 18th October 2021, Timor-Leste’s energy leaders and decision-makers gathered together to discuss the country’s biggest opportunities and energy future. The forum was opened by Chryssa Tsouraki, co-CEO of IN-VR, who expressed her excitement about Timor-Leste’s development from a country that depends on its natural resources for growth, to a country that is promoting sustainability in the region.
Following this, H.E. Víctor da Conceição Soares, Minister of Petroleum and Minerals gave an overview of Timor-Leste’s success in adapting their licensing round to the post-Covid environment, introducing sustainable solutions to the country, and the launch of the country’s Mining Code. He concluded by inviting international investors to partake in the country’s new investment opportunities.
Timor-Leste’s new petroleum and energy strategy
Mr Florentino Soares Ferreira, President of ANPM began his presentation by going over Timor-Leste’s oil and gas history, highlighting the achievements and experience the country has accrued over the years.
ANPM granted the approval for the drilling 3 wells in bayu undan, with 2 wells very successful, while onshore, they are completing the final preparations for exploratory wells by the end of this month.
Currently, ANPM is exploring the specifics of a 10 million tonne Carbon Capture Storage deal with Santos, two times the size of the largest CCS project in the region, signing a CCS MOU to proceed with the efficient planning of the project. For the developing country of Timor-Leste, CCS is a main selling point now that energy players are leaning towards carbon-neutral projects, with plans to offer carbon credits to operators and companies investing in Timor-Leste, helping them reach carbon neutrality.
Regarding midstream, President Ferreira announced that the Tasi Mane mega-project will be separated into smaller refineries, LNG plants and downstream projects, distributed in strategic locations throughout the island. Instead of requiring new operators to build large pipelines to connect to the mainland, ANPM has planned for a connected network of pipelines connecting to Greater Sunrise and each other, before a large pipeline transfers the gas from the Greater Sunrise field to the upcoming downstream facilities, including a newly planned onshore LNG plant. Thanks to this, operators will only have to invest and plan a connection to the Greater Sunrise pipeline.
Timor-Leste's 2nd Licensing Round in a nutshell
Director Mateus Da Costa Executive Director for Exploration and Promotion of ANPM presented the country’s available acreage comprising of 18 blocks, 11 offshore, and 7 onshore, with geology highly similar to the Australian continental shelf.
Potential investors can take part in a Production Sharing Contract, with the most competitive terms in the region:
No cost recovery limit
No signature bonus, meaning any budget a company is planning to spend exploring Timor-Leste goes directly to conducting exploration activities.
Fixed royalty for both oil and gas at 5%
The cost recovery policy covers the exploration cost, the capital cost, the operating cost, as well as the decommissioning reserve.
Provision of an uplift of 11% plus a US long-term bond rate for offshore, 9% uplift for onshore
Profit sharing of 40% to the state, with the contractor keeping 60%, with an agreed domestic market obligation at market price.
No minimum-required state participation, with a limit of up to 20%.
Regarding the tax regime, they have a 30% income tax, with an SPT (Supplemental Petroleum Tax) of 22.5%, in the event that a company’s interest rate of returns exceeds 16.5%.
Currently the ANPM has a large database available to interested companies, constantly updated, including recently acquired new magnetic and airborne gravity data for onshore wells joining the free database
You can read more on why Timor-Leste is offering the most competitive licensing round in the region here.
The Mining Code and next steps for the industry
Rafael De Araujo, Director of Mining from ANPM announced that the country’s Mining Code was finalised and approved on the 21st of June, with the code now entering the last stages of socialisation. The national authority has plans to enhance the code with additional regulations in the following months, and proceed with building the supporting infrastructure required to enable projects to move forward.
The country has huge limestone deposits, with construction materials in abundance, such as large quantities of marble. The ANPM released 2 blocks for ornamental stones to kickstart mining operations, with first production expected as soon as 2022.