Also: E.Timor offers 15 oil, gas blocks in upstream launch

The Associated Press/SINGAPORE

By GILLIAN WONG Associated Press Writer

East Timor launches oil, gas roadshow

SEP. 2 4:40 A.M. ET East Timor's Prime Minister on Friday kicked off the first leg of an international tour to attract oil and gas explorers to the Timor Sea, aimed at tapping the country's vast natural resoruces and bringing investment to the impoverished economy.

"Timor-Leste is open for business," the young nation's prime minister Mari Alkatiri said, using the country's official name.

"We are indeed applying the same principles of sound management and transparency to the licensing of petroleum development," said Alkatiri, also East Timor's natural resources minister.

The campaign follows recent parliamentary approval of a legal framework for the development of East Timor's onshore and offshore oil and gas resources and the long-term management of its petroleum revenues.

East Timor, which gained independence from Indonesia in May 2002, is banking on the country's fledgling energy industry as its dominant revenue stream.

At the presentation, East Timor's energy officials offered for sale 6,600 kilometers (4,100 miles) of seismic data of the Timor Sea which they said showed the presence of potential petroleum and gas resources.

The data covers an area of 30,000 square kilometers (11,583 sq. miles) from East Timor's southern coast to the Joint Petroleum Development Area, which Dili jointly administers with neighboring Australia.

"So far, we have identified between 20 and 30 potential prospects," said Geir Ytreland, petroleum adviser at East Timor's Oil, Gas & Energy Directorate. He also said some companies had purchased the seismic data on Friday but did not specify which.

Ytreland said the surveyed Timor Sea area could provide several hundred million barrels of crude oil and several trillion cubic feet of natural gas.

Dili will release acreage details and bidding regulations on October 1 and hold a technical conference in November, Alkatiri said.

The team will make presentations in London on Sept. 6, Calgary on Sept. 9, and Houston on Sept. 13.

East Timor, one link in the 3,000-mile-long (4,800-kilometer-long) chain of islands that make up the Indonesian archipelago, was a Portuguese colony for three centuries until Indonesia invaded and occupied it in 1975.

The country gained independence in 2002 after a U.N.-supervised referendum in 1999 brought an end to Indonesia's occupation.

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Friday September 2, 6:41 PM

E.Timor offers 15 oil, gas blocks in upstream launch

SINGAPORE, Sept 2 (Reuters) - East Timor opened bidding on Friday for its first oil and gas blocks as one of the world's poorest nations sought to leverage its oil and gas riches to boost economic development and help ease poverty.

It is offering 11 offshore blocks on its own, and four blocks as part of the Joint Petroleum Development Area (JPDA), waters dividing the tiny nation and Australia.

The two bidding rounds -- launched on schedule despite concerns they might be delayed until the first quarter of next year -- will run independently, and both are expected to be awarded by mid-2006.

"We look to the (oil) sector to be a much broader and dynamic contributor to the national economy," Prime Minister Mari Alkatiri said at a roadshow in Singapore.

"This contribution will come in many forms: in capital investment, in employment generation -- both directly in the oil and gas industry and indirectly as the increased investment and activity drives up demand for goods and services."

East Timor is offering 11 offshore blocks covering 30,000 square km (11,580 sq mile), running along the southern coastline of the country to the northern edge of the JDPA.

Companies such as Malaysia's Petronas [PETR.UL], Australia's biggest independent oil and gas producer Woodside Petroleum Ltd. , Norway's Statoil , Kuwait's international upstream investment firm Kufpec and PetroChina have expressed interest, officials said earlier this year.

There was little exploration of East Timor's hydrocarbon potential during Indonesia's 24-year rule, which ended in 2002, but several large gas fields have been found in the sea that separates East Timor and Australia.

A seismic survey for the East Timor area was completed this year and shows potential hydrocarbon reserves, East Timor officials said.

INVESTORS KEEN, BUT CAUTIOUS

"There are between 20 and 30 potential prospects. And the mapping was done on a very rough scale so there could be more," Geir Ytreland, petroleum adviser for East Timor's Oil, Gas and Energy Directorate, told reporters after the roadshow.

Ytreland declined to give reserve estimates but said there were oil seeps onshore, which would be offered for exploration later.

The JPDA's bidding round offers four blocks, for a total surface of about 15,000 square km.

The JPDA, under which 90 percent of revenues go to East Timor and 10 percent to Australia, is a proven hydrocarbon region.

The Bayu-Undan project, which came on stream last year, produces up to 110,000 barrels per day of liquids. Output should rise once the liquefied natural gas LNG plant is completed by early 2006, which would make the energy sector an even bigger single contributor to East Timor's gross domestic product, Alkatiri said.

Gas reserves at Bayu-Undan, operated by U.S. No. 3 oil company ConocoPhillips , are estimated at 3.4 trillion cubic feet (tcf) and 400,000 million barrels of liquids.

"This region may be a major gas hub with reserves of 40 to 50 trillion cubic feet," said Nick Kyranis, Managing Director (Technical) for the Timor Sea Designated Authority (TSDA).

The East Timor government enforced in July the Petroleum Fund Law to manage oil revenues and would transfer more than $200 million collected in 2004/05 into the fund next week. Parliament has also passed the final parts of the petroleum and fiscal laws.

Terms include a royalty of 5 percent of gross output, a 30 percent tax on profits from the contractor's share of production and a profit-sharing scheme giving 60 percent to the contractor and 40 percent to the state.

While the terms appeared more alluring than in neighbouring Indonesia, industry sources cautioned that exploration might be difficult.

"The terms are very attractive, but most of the acreage is very deepwater," a source with an Asian company said. "This is going to be difficult."

Alkatiri added that his government and Australia were still finalising the details of a deal to develop the giant Sunrise gas development with an estimated 8 tcf of gas and up to 300 million barrels of condensate in a contested area.