Santos has concluded negotiations for the divestment of partial stake in an offshore gas project to TIMOR GAP, which will join the Bayu-Undan project as partner.
Santos said the Bayu-Undan Joint Venture (BUJV) and TIMOR GAP have agreed terms of a Sale and Purchase Deed (SPD) to transfer a 16% interest in the Bayu-Undan upstream project to TIMOR GAP, with an economic date of 1 July 2024.
Execution of the SPD to effect this transaction is planned to occur in mid-September.
A seventh extension of the Production Sharing Contract to June 30, 2026 has also been confirmed.
The Bayu-Undan upstream project comprises the offshore petroleum field, and offshore production and processing facilities located in Timor-Leste.
Following completion of the transaction the working interests in the BUJV are held by Santos (36.5%), SK E&S (21%), INPEX (9.6%), Eni (9.2%), Tokyo Timor Sea Resources (7.6%) and TIMOR GAP (16%).
The Bayu-Undan field is located approximately 500 kilometres northwest of Darwin in Timor-Leste offshore waters. In operation since 2004, it continues to make a significant contribution to Timor-Leste’s financial well-being and continues to produce, surpassing original expectations.
The project has provided more than $25 billion in revenue for Timor-Leste over its life so far. More than half the offshore workforce at Bayu-Undan is Timorese with the project currently supporting about 350 onshore and offshore jobs in Timor-Leste. One hundred per cent of Santos’ workforce in Timor-Leste are locals.
Bayu-Undan continues to produce gas into the Australian domestic market via a Gas Sales Agreement with the Power and Water Corporation of the Northern Territory, as well as producing valuable liquids.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said the transaction demonstrates the company’s commitment to a long-term partnership with Timor-Leste in the development of the country’s petroleum resources.
“I have long wanted to see TIMOR GAP as a partner of Santos and I welcome them as a participant in the Bayu-Undan joint venture,” said Gallagher.
Santos remains committed to working with Timor-Leste and the joint venture to repurpose Bayu-Undan into a new large-scale, commercial carbon capture and storage project when petroleum production ends.
This would create an ongoing source of revenue, local jobs and business opportunities for Timor-Leste by providing carbon management services to the Asian region, Santo said.
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