DILI, 02 may 2024 (TATOLI) – Today, Timor Gap, the state-owned oil and gas company, and Timor Resources Pty Ltd, a private Australian oil and gas company, signed a settlement agreement to end the commercial dispute over the exploration of three wells in the Covalima Municipality, namely Fetokmaus, Liurai, and Lafaek. Both companies also signed Joint Operating Agreement (JOA) to continue the oil and gas exploration activities.
The signing of the agreements, which took place at the Orchid Room Timor Plaza, was witnessed by the Minister of Petroleum and Minerals, Francisco da Costa Monteiro.
The signing of the settlement agreement put an end to the commercial dispute between the two companies and allowed both parties to continue oil and gas exploration in the southern municipalities (PSC TL-OT-17-08 (Onshore Block A) and TL-OT-17-09 (Onshore Block C).
The Chairman of the Board of Directors and, the Executive Committee of Timor Gap, Rui Maria Alves Soares said that the dispute between the two parties had been going on for some time, which prompted the Council of Ministers to approve a resolution to resolve the dispute.
“After series of discussions, both parties have finally aligned and with the singing of today’s Settlement Agreement and the amended JOA, both parties will work together to continue the work commitments in the PSCs, which will include the appraisal drillings in Onshore Block A to determine commercial discovery of the wells,” said Soares.
He said that according to the agreement, Timor-Gap would provide 30% of the financial contribution for the oil and gas exploration, while Timor-Resource would continue its exploration activities until it reached 70%: “This is the solution that both parties have agreed on in order to move forward.”
At the same place, the Managing Director and CEO of Timor Resources, Suellen Osborne, said that the signing of the agreement is crucial for onshore oil and gas exploration in the country.
She said that the different interpretations about the rights and obligations of the consortium partners posed difficulties for both parties to carry out oil and gas exploration in the southern municipalities, adding therefore, the signing of the agreement allows both parties to accelerate the exploration activities.
Minister Monteiro said that closer cooperation between the companies and the government is necessary to speed up the onshore oil and gas project to generate revenue for the country, replacing Bayu Undan, which has already reached its end.
He said that close collaboration and efforts are needed to accelerate exploration activities in the country to reach commercial discoveries.
The dispute between the two companies began in 2019, with TR submitting a formal dispute notification, under the consortium agreement, in august 2021.
Last year, Timor-Resource announced that it had so far invested more than US$64 million in the exploration of the three wells.
The results of these three (3) explorations drilling showed hydrocarbon discovery with the fluid type of as oil and gas or condensate.
Timor Resource announced that hydrocarbon pressure was above 8000 psi, revealing the potential for a significant recoverable reserve.
In november 2023, National Petroleum Authority (NPA) announced the results of the three wells as “technical discovery”.
Timor Gap with Timor Resources signed the Production Sharing Contract (PSC) with ANP in 2017 for both onshore blocks, PSC TL-OT-17-08 (Onshore Block A in Covalima Municipality) and PSC TL-OT-17-09 (Onshore Block C in Manufahi & Ainaro Municipalities) and became a 50:50 joint venture partner with Timor Resource as operator.
Journalist: Camilio de Sousa
Editor: Filomeno Martins
