DILI, 23 december 2021 (TATOLI) – The Government of Timor-Leste, through the Minister of Petroleum and Minerals (MPM), has launched the offshore oil and gas drilling of Buffalo-10 well in the Timor Sea.
The official launch of the drilling was accompanied by the National Petroleum and Minerals Authority (ANPM) and Australian oil and gas company Carnarvon Petroleum.
“Today, we are gathered here to launch the drilling of the Buffalo-10 well. It’s just the beginning and I wish the Carnarvon all the very best with the drilling. We hope that Carnarvon will execute its drilling successfully. Carnarvon’s success is our success,” said Minister of Petroleum and Minerals, Víctor da Conceição Soares at the celebration of the launching of the Buffalo-10 Drilling Campaign at Hotel Timor, in Dili, on wednesday.
Soares congratulated Carnarvon for picking up the courage to invest in the Buffalo-10 drilling: Let’s pray for Carnarvon and for all of us to succeed in this drilling. This is just the beginning and we will have a real celebration when Carnarvon successfully produces oil and gas from this well.”
“Carnarvon showed us a patriotic courage (…) I challenge this company to keep up this kind of courage and keep working until it achieves its goal to contribute to the development of the nation,” he said.
At the same place, the Country Manager of the Carnarvon, Angelo Lay revealed that the drilling of the Buffalo-10 is estimated to cost around US$35 million.
Australian oil and gas company Carnarvon Petroleum had been expected to spud the Buffalo-10 well in the Timor Sea in late december.
“The drilling machines of oil and gas well will arrive in the Buffalo filed (Timor Sea) on thursday (23/12) from Australia. The drilling has been set to begin on 26-27 december after the installation of the machines is completed. As you know, it’s just one well, so the drilling would be completed within 35 days,” Lay said.
He said Buffalo-10 well is not a new field to be explored as it was previously drilled by other companies from 1999 to 2004 with producing more than US$20 million barrels of light oil: “You know the Buffalo field was abandoned in 2003-04 following the prices of oil and gas plummeted globally at that time. Carnarvon bought the filed from another company in 2016.”
Lay recalled that Buffalo-10 well was under the sovereign jurisdiction of the government of Australia before the final delimitation of maritime boundaries, between Timor-Leste and Australia.
“Once the Buffalo field was 100 percent belong to Timor-Leste, the Carnarvon was granted the license by the ANPM for the drilling of the well. So, on 30 august 2019, the Carnarvon and ANPM sign a Memorandum of Understanding for the drilling of the field,” said Lay
He assured that Carnarvon will 90 percent successfully execute the drilling of the well, saying by 2024, the company would produce its first production.
Previously, Australia’s Carnarvon stated that Timor-Leste could pocket just over US$600 million if the Buffalo-10 exploration well is successfully drilled.
Australian-listed Carnarvon Petroleum and UK-listed Advance Energy, are hoping to develop more than 30 million barrels of oil that previous operators, including BHP and Nexen Petroleum, appear to have left behind offshore East Timor, also known as Timor Leste, said Carnarvon and Advance Energy, quoted by Energy Voice.
The Buffalo oil field was originally discovered in 1996 by BHP and produced 20.5 million barrels of light oil between 1999 and 2004. BHP operated the field for two years before selling out to Nexen. Both operators failed to unlock the oil sitting at the geological crest of the field, known as the attic.
If the drilling proves successful and they discover some 30 million barrels of oil then East Timor could pocket about $450 million over five-year project life, calculates Peter Strachan, a Perth-based independent energy analyst. This is based on an oil price of $75 per barrel with development costs pegged at $450 million and operating costs at $1,050 million. If development costs were less than $450 million ($15/barrel) then the East Timor government would receive more.
“Upside for the government could see it pocket $610 million over a five-year project life,” said Strachan, quoted by Energy Voice
The Vice President of ANPM, Jose Manuel Goncalves said ANPM is committed to cooperating with the Carnarvon to facilitate the drilling of the Buffalo-10 well.
In addition, Mateus da Costa, the Executive Director for Explorations and Promotions at National Petroleum and Mineral Authority (ANPM) informed that according to the study conducted by ANPM and Carnarvon indicated that there would be no environmental impacts of the deep-water oil and gas exploration in the Buffalo-10 well.
Journalist: Filomeno Martins
Editor: Nelia Borges Rosario
