Last month, over 500 international investors, IOC representatives, and key service companies gathered online to watch the latest updates on Timor-Leste’s 2nd Licensing Round.
H.E. Dr. Victor da Conceicao Soares, Minister of Petroleum and Minerals opened the summit, welcoming investors and operators. The summit was chaired by Florentino Soares Ferreira, President of ANPM, who gave a detailed overview of Timor-Leste’s 2nd Licensing Round, and the country's onshore and offshore opportunities.
Timor-Leste is in the middle of its 2nd Licensing Round, with 18 blocks available for international energy companies, seven located onshore, and eight offshore. The young country offers free access to its data to any company that will pass a very simple prequalification process.
In order for a company to apply, first they must reach pre-qualification status, by meeting specific technical, financial, legal and administrative requirements. Companies can submit their prequalification document until 15th of August 2021. After the pre-qualification process, a company gains access to all the available data, and can bid directly in the Licensing Round.
This timeline was adjusted in order to accommodate the market volatility created by the COVID-19 pandemic.
Furthermore, Timor-Leste is open to partner with more companies that have significant expertise in data processing, and technical studies on onshore and offshore.
Timor-Leste’s upstream opportunities in numbers
✔ Timor-Leste is the majority shareholder of the Greater Sunrise fields, a gas field containing more than 5.13 trillion cubic feet of gas, and 225.9 million barrels of condensate reserves
✔ Onshore exploration has began at blocks A & C in Timor Leste, with independent assessments indicating that the blocks contain more than 127 million barrels of recoverable oil
✔Timor-Leste has a large database of seismic data for the industry to evaluate onshore and offshore, including approximately 16,000 square kilometers of offshore 3D seismic data, 1 million line kilometers of 2D seismic data for offshore, and a graded airborne survey ranging to 15,000 square kilometers for onshore acreage
✔ ANPM has made its geological data and analysis available for free, to all companies that pass prequalification ✔ ANPM has 82 wells specifically available for evaluation and technical studies by IOCs interested in applying for the Licensing Round
✔ With no limitation on cost recovery, with full cost recovery in place for investors, before sharing profits with Timor-Leste, the country has some of the most competitive incentives in the South-East Asia region
✔ There is no mandatory state participation
✔ The onshore PSC model has an uplift of 9% plus US long-term bond rate. Regarding the profit sharing, roughly 40% goes to the state, with the contractor keeping 60%, with an agreed domestic market obligation at market price
✔ SundaGas is executing 3D Seismic Data reprocessing for Chudith, and will proceed with its drilling plan in 2023
✔ There will be a lot of opportunities for service providers in fuel storage, pipeline construction, distribution, and more, according to Timor GAP
The time is now
Timor-Leste is creating a very stable environment for large-scale regional investments by establishing partnerships with its neighbours and resolving outstanding issues. The country is cooperating with Australia and major regional IOCs to make the most out of the Greater Sunrise reserves and future discoveries. Opportunities have opened up for major, medium and smaller-sized players alike. Major IOCs are expressing interest for offshore acreage, and medium and small-sized players are looking to get involved in onshore exploration.
With the country gearing towards new exploration campaigns, and the present progress of the current onshore exploration campaigns, the time to invest in Timor-Leste is now. After all, the best time to invest in a market is when the industry is starting, and when it begins to grow. Timor-Leste is experiencing a rebirth in its upstream and midstream industries, creating a new platform for energy companies, midstream and service providers to expand in South-East Asia and take part in a new frontier with minimal above-ground risks.