Timor Leste’s petroleum authority Autoirdade Nacional do Petroleo (ANP) has lodged a notice of intent to terminate Timor Gap permit JPDA 06-103 PSC, operated by Perth-based Oilex Ltd.
ANP also is demanding the joint venture participants pay $17 million for the estimated cost of exploration activities not carried out in 2013 and certain local content obligations set out in the production-sharing contract.
Oilex with 10% is liable for $1.7 million. Pan Pacific Petroleum, Sydney, with 15% interest, would be required to pay $2.6 million.
Other JV partners are Japan Energy 15%, Gujarat State Petroleum 20%, Videocon 20% and Bharat PetroResources Ltd. 20%.
The joint venture had previously requested credit for $56 million in excess expenditure on the approved work program, however ANP has refused to provide any letter of credit. The permit has been suspended since 2013.
The JV has a remaining commitment of at least one exploration well, nominally selected as Bazartete-1.
In 2013, at the time of the suspension, Oilex had been trying to secure the Stena Clyde semisubmersible rig to fulfil the requirement. However Oilex claimed the souring of relations between Australia and Timor Leste over the Timor Gap Sunrise fields, along with the lack of success in the JV’s previous two wells, had prompted a decision to exit the permit.
Oilex claimed that threats by Timor Leste to abandon the maritime treaty with Australia, which defined the boundary between the two countries, had increased political risks.
For its part, Timor Leste’s government said it had been more than patient with the Oilex group and that it was misleading to use the marine boundary arbitration as an excuse to avoid contractural obligations.
ANP has asked for a response to its payment demand by June 12. The PSC will remain in suspension until June 15.
