PERTH (miningweekly.com) – Oil and gas major Santos has welcomed the announcement of permanent maritime boundaries between Australia and Timor-Leste.
Advisory firm Wood Mackenzie noted that the Maritime Boundary Treaty removed several hurdles for the Sunrise and Buffalo gas projects, defining the border and formalising the governance structure and tax sharing arrangement between the two countries.
“Finalising the border agreement will enable the Greater Sunrise and Buffalo developments to progress. This could provide much needed revenues to Timor-Leste, a developing country that is reliant on petroleum income,” senior analyst Chris Meredith said.
Timor-Leste's economy is underpinned by a petroleum fund that will see no additional revenue once the Bayu-Undan field ceases in 2022. As a result, development of Greater Sunrise is top priority.
Woodside, the upstream operator of Greater Sunrise, has indicated it won’t invest in a liquefied natural gas plant onshore Timor-Leste.
“We expect Woodside will initially pursue a liquids-stripping project. Monetising the large liquid resource upfront. On a later timeline, the gas resource will be produced via the onshore liquefaction plant,” Meredith said.
Santos, which holds an 11.5% interest in the Bayu-Undan joint venture (JV) has welcomed the agreement, with MD and CEO Kevin Gallagher saying the company was delighted to have been part of this historic achievement which marks the next chapter in Timor-Leste’s economic independence and development.
“And what better time to reach and celebrate this milestone than the twentieth anniversary of the day when the people of Timor-Leste voted resoundingly for independence.
“The transition agreements bring the certainty and stability needed for ongoing operations at Bayu-Undan and a clear pathway for future resource development in the waters of Timor-Leste,” Gallagher said.
The Bayu-Undan upstream facilities now fall entirely within Timor-Leste’s jurisdiction, whilst the Bayu-Undan to Darwin Pipeline, including the small portion within Timor-Leste’s sovereign waters, will be subject to Australia’s exclusive jurisdiction.