Subject: E Timor Technical Workshop Lures Oil, Gas Firms
Thursday November 17, 2:22 PM
UPDATE: E Timor Technical Workshop Lures Oil, Gas Firms
By Veronica Brooks Of DOW JONES NEWSWIRES
CANBERRA (Dow Jones)--East Timor's Prime Minister Mari Alkatiri on Thursday opened a key workshop involving executives from more than 20 oil and gas companies interested in participating in the tiny Southeast Asian country's maiden bidding round for petroleum exploration rights in the Timor Sea.
The technical conference follows a recent international roadshow, which took in Singapore, London, Calgary and Houston, and aims to give corporate executives from Europe, North America and elsewhere a more detailed explanation of the Timor Sea's geology as well as the regime developed by Dili to exploit its onshore and offshore oil and gas resources.
East Timor opened bidding on 11 blocks in September. All are located in East Timor's exclusive maritime area.
Companies have been told to submit their bids by March 15 and the government will announce the successful parties in mid-June.
Alkatiri promised a competitive and transparent legal and contractual regime for the development of the petroleum resources.
"The (independent seismic) survey has identified more than 20 potential hydrocarbon systems in Timor-Leste's exclusive maritime area," the prime minister said in a statement, describing the location as Asia's last petroleum frontier.
"Timor-Leste wants long-term partners that can bring capital, technology, and human resource development so that we can fully develop our potential," Alkatiri said.
"And in return, I am confident that your interest and investment in Timor-Leste will be rewarded," he said.
The bidding round marks the first time petroleum companies will be able to acquire rights to explore for petroleum resources in areas under East Timor's jurisdiction.
Dili has stipulated it will allow production-sharing contractors to take 60% of profits from petroleum, after recovery of costs.
Contractors, however, will pay 30% income tax on their share of profits as well as a 5% royalty on gross production.
East Timor, which gained independence from Indonesia in May 2002, is banking on the country's fledgling energy industry as its dominant revenue stream.
The Timor Sea Designated Authority is also releasing new acreage -- comprising four blocks -- in the Joint Petroleum Development Area in the Timor Sea, which is managed jointly with the Australian government.
Alkatiri on Thursday again expressed confidence his government will soon finalize a revenue-sharing agreement with neighboring Australia covering the US$5 billion Sunrise natural gas project located in a disputed area of the Timor Sea.
"I can inform you today that I believe this process can be concluded in 1-2 months," he said.
Sunrise operator Woodside Petroleum Ltd. (WPL.AU) wants fiscal and legal certainty before it resurrects the venture after shelving it last year.
Sunrise contains up to US$40 billion of natural gas and concentrate, representing a significant windfall for East Timor, a poor nation of just 800,000 people which still relies heavily on foreign aid.
Alkatiri reaffirmed his belief the best development model for Sunrise is to pipe the gas to a processing plant on Timorese soil rather than Perth-based Woodside's favored option of sending it to a facility in the northern Australian city of Darwin.
"As well as making commercial sense, building this plant would play a dynamic role in the development of our economy," Alkatiri said.
Woodside owns 33.4% of Sunrise, which is situated 150 kilometers south of East Timor and regarded as the richest prize in the waters that divide the two countries. Its partners are ConocoPhillips (COP) with 30%, Royal Dutch Shell PLC's (RDSB.LN) with 26.6% and Japan's Osaka Gas Co. (9532.TO) with 10%.