DILI, 13 May 2025 (TATOLI) – The representative of Australian company Santos Ltd, José Lobato Gonçalves, met today with the President of the Republic, José Ramos-Horta, to discuss Santos’ proposed Bayu-Undan Carbon Capture and Storage (CCS) project offshore Timor-Leste.
This is the second time Santos has presented and discussed the plan with the Head of State, following their previous meeting in 2022 at the Presidential Palace, where Kevin Gallagher, Managing Director and CEO of Australian company Santos Ltd, presented the Bayu-Undan Carbon Capture and Storage (CCS) project, which is expected to capture 10 million metric tons of carbon dioxide (CO₂) per year.
During the meeting, President Horta was briefed on the planned conclusion of Bayu-Undan’s production and exploring new avenues for partnership.
José Lobato presented Santos’s interest in a significant new venture: a Carbon Capture and Storage (CCS) project—an innovative proposal that could align with global climate mitigation efforts and create new economic opportunities for Timor-Leste.
“This initiative proposes to utilize the depleted Bayu-Undan reservoir for the secure, long-term storage of carbon dioxide, potentially sourced from various industrial activities,” read a statement.
In response, President Horta emphasized that any such undertaking would require thorough assessment and a clear agreement that benefits the nation and adheres to the highest environmental standards.
“The Presidency remains open to exploring sustainable investments that contribute to Timor-Leste’s development and its role in addressing global challenges,” said the statement.
In 2023, Santos and its Bayu-Undan joint venture partners signed a Memorandum of Understanding (MOU) with Timor-Leste’s national oil company TIMOR GAP to explore partnership opportunities for the proposed Bayu-Undan CCS project.
Santos said that the project has the potential to reduce the absolute emissions and emissions intensity of Australian and Timor-Leste gas and LNG projects, as well as other hard to abate industries in the region.
Last year, the Minister of Petroleum and Mineral Resources (MPMR) and International Finance Corporation (IFC) signed a one-year cooperation agreement for the implementation of the Carbon Capture and Storage (CCS) project in Bayu Undan field. The agreement was signed by the Petroleum Minister, Francisco Monteiro, and the IFC Country Director for Indonesia and Timor-Leste, Euan Marshall, in Dili.
According to Francisco Monteiro, IFC will provide technical assistance to the ministry, contributing to the formulation of legal and commercial frameworks, as well as sharing its experience in similar projects in other countries.
Euan Marshall, IFC Country Manager for Indonesia and Timor-Leste said that the collaboration is also intended to support the ministry in exploring the conditions necessary to establish an innovative carbon capture and storage site in Bayu Undan.
Previously, the former President of the National Petroleum and Minerals Authority (ANPM), Florentino Soares Ferreira said that the Bayu-Undan Carbon Capture and Storage (CCS) project is estimated to generate up to US$7 billion.
The proposed Bayu-Undan Carbon Capture and Storage (CCS) project is estimated to cost US$1.6 billion.
The Bayu-Undan CCS project is part of Santos’ three-hub CCS strategy that includes the Moomba CCS project, now 70 per cent complete and on track to store up to 1.7 million tonnes of CO2 per year commencing in 2024.
Meanwhile, La’o Hamutuk, a local non-governmental organization in Timor-Leste, has expressed concern about the CCS project, stating that it is potentially dangerous for Timor-Leste and unlikely to effectively address climate change.
In June 2021, La’o Hamutuk published an article questioning the CCS plan because it undercuts the principle of climate justice and will negatively impact on Timor-Leste and the global climate. “This is already a public and worldwide concern, because human activities, especially extractive industries, are changing our climate, creating a serious crisis for humanity.”
In February 2022, La’o Hamutuk wrote a submission asking the Northern Territory (Australia) Environmental Protection Authority (NTEPA) to look at Santos’ CCS proposal holistically, and to analyze it deeply, rather than only looking at Santos’ interests.
La’o Hamutuk expressed strong opposition to the proposed CCS project at the Bayu-Undan field, stating, “Carbon Capture and Storage is not a solution.”
Santos has a 43.4% operated interest in Bayu-Undan. The remaining interest is held by SK E&S (25%), INPEX (11.4%), Eni (11%) and Tokyo Timor Sea Resources (9.2%).
TATOLI
