Timor-Leste is hosting a licensing round (contract signature planned for January 2021) to attract new exploration investment to counter the decline in production from the Bayu-Undan field, the country’s main producing field (gas and condensate), which will be depleted by 2021. It is plausible that in the coming years Timor-Leste will continue awarding licenses either via new licensing rounds or direct negotiations.
As a result of the March 2018 treaty setting the maritime boundaries between Australia and Timor-Leste, the Greater Sunrise fields’ Designated Authority will enter the Greater Sunrise PSA under conditions equivalent to the previously signed PSAs; however, it is still not decided what the best development concept for these fields is.
In relation to the Greater Sunrise Special Regime (GSSR), the Interim Petroleum Mining Code will initially regulate the development and exploitation of petroleum resources from the area; however, it will be replaced as soon as possible by a final Petroleum Mining Code, which will be approved by the Governance Board and the Designated Authority of the GSSR.
Upstream oil and gas operations in Timor-Leste are governed by PSAs. Royalties are payable at a rate of 5% on gross production, and the remaining production is available for cost recovery. After the deduction of royalties and cost recovery, the production is shared between the licensee and the state, with the state receiving 40% of profit oil and gas.