Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
First of all a correction to what I wrote before - I meant to state that the sovereign petroleum fund is less than $20 billion, not $10 billion.
Excellent articles - a bit of light reading before you buy another 20 million shares :)
https://www.afr.com/markets/equity-markets/the-sun-is-set-to-rise-over-east-timor-20220425-p5ag0k
https://bti-project.org/en/reports/country-report/TLS
Somethig has to give. TL has a GDP of $2 billion, a sovereign petroleum fund of less than $10 billion, and after next year they'll lose $1 billion of annual revenue from Bayu-Undan; the CCS and LNG liquefaction facilities will likely cost in excess of $20 billion. The only way forward is for TL to compromise.
Greater Sunrise/Chuditch must be given value on the balance sheet this year - I can't see any other outcome.
Southwestern Production Corporation? Really? Why?
https://www.energyvoice.com/oilandgas/asia/411563/giant-ccs-plan-in-east-timor-could-help-secure-finance-for-sunrise-lng/
A liquefaction plant on its own soil and a CCS facility will take years to develop. With the necessary financial backing, TL might just pull it off - but they won't hit their target of producing LNG by 2028 unless everything is in place in the next few months. The Timor Sea LNG has become vitally important to the world's energy needs - I have no doubt that TL will obtain the financial backing that they need.
Chuditch or Dunrobin? I fancy an each-way bet.
The PSC is yet to be signed with Woodside:
https://www.energynewsbulletin.net/on-the-record/news/1432373/o%E2%80%99neill-optimistic-on-sunrise-browse-ccs-and-bhp-merger%C2%A0
WOODSIDE Petroleum CEO Meg O’Neill:
"She is optimistic on...signing a PSC for development of the Greater Sunrise gas field offshore Timor Leste...."
Howey1927, my feeling is that they will have to bite the bullet in the next few months. Timor Gap have already stated that it "expects to finalize a legal framework and production sharing contract (PSC) for Greater Sunrise this year, and then move on to a second phase of development...."
What we're seeing now, in my opinion, is a lot of political posturing by the Timorese government and Timor Gap - designed to obtain the best possible terms in the PSC. I'm no expert, but I doubt that Timor Gap could actually go it alone - I doubt Cormick's comments about being able to bring in all the necessary personnel for that scenario.
It may not be what we'd hoped for, but the political wrangling is not over yet. And a pipeline to East Timor is not without its technical problems because of the 3,000-metre deep Timor Trench between Greater Sunrise and the Timor coast. Many consider it too dangerous to contemplate.
Whichever way they go, it has to get under way in the next 12 months. TL can't wait any longer. In the overall scheme of things, that has to be good news for us.
Don't forget Dunrobin - this is now the firm favourite in a 2 horse race.
"Going It Alone
Woodside is still not onboard with the pipe-to-Timor options. "If they [Woodside] do get off the bus, we’re busy working on who will replace them on the bus," said Cormick.
"It may be that we shore up all the capabilities of Timor Gap, it already has nuts and bolts of being a very effective, low-cost, low overhead, truly capable operator, all we need to do is insert a number of very experienced personnel which we have full access to," he said.
How about another partner? "We don’t really need an IOC [international oil company] or an NOC [national oil company] — if it turns out that Woodside has to fade back, and/or sell their interest, so be it, under the existing rights Timor Gap could become the operator."
As for financing, East Timor has a $19 billion-plus sovereign wealth fund, which could help.
Coming to America
Sousa was in the US this week seeking technical as well as political leverage. “You guys are ahead of us by more than 100 years — you can make this happen," he said in an interview.
Among others, Sousa's team met with the University of Texas' Bureau of Economic Geology.
"We need an updated reservoir study that goes back to raw data, all the way back 48 years ... so that we drill it properly and extract the maximum hydrocarbons that God left us," Cormick said.
Sousa's team would also like the US to use its influence with Australia to smooth over any remaining issues with East Timor; he was not more specific on that point.
The country also plans to play the China card. “Our location geographically is very important to the US,“ said Sousa, citing a recent dispute between China and the US over the Solomon Islands.
Cormick drove home the point. "You don’t get many more chances here to draw a line in the ocean and say, 'your advancement, Mr. China, has come to an end, you’re not going to take over this country.'"
Michael Sultan, Washington"
https://www.energyintel.com/00000180-b4bf-d4e5-a7d7-f6bf853d0000
East Timor Could Go It Alone on Greater Sunrise
The tiny Southeast Asian nation of East Timor is likely to go it alone in the development of a pair of major gas fields off its southern coast.
The Sunrise and Troubadour gas and condensate fields, known as the Greater Sunrise Fields, are located in the Timor Sea and hold around 5.13 Tcf of contingent gas resources and 225.9 million bbl of condensate.
East Timor, also known as Timor Leste, has long favored building an onshore liquefaction plant in the country to boost the economy, while its minority partner, Australia's Woodside, prefers either a floating concept or sending the gas to backfill existing LNG facilities in Australia.
"We only have two options ... one is a pipeline to Australia, one is a pipeline to Timor Leste," Antonio de Sousa, president and CEO of state energy company Timor Gap, told Energy Intelligence this week in Washington. "With our national aspiration, we only have one option — a pipeline to Timor to guarantee development” of the country.
Sousa also dismissed the possibility of using floating liquefaction, asserting that the most viable, economical option is a pipe to a East Timor-based liquefaction plant.
"The maritime boundary treaty made it clear that those were the only two options that were going to be considered," explained Ron Cormick, an industry veteran and senior adviser to Sousa.
Darwin Option Not the Fittest
"It is worthwhile to keep in mind that there is an overlying political reason," for the pipeline to head for East Timor, said Cormick, but "it should still stand on its own two feet in terms of economic viability, and that study has been done."
He said that economically, onshore liquefaction in East Timor comes out ahead of taking the gas to Australia's 3.7 million ton per year Darwin LNG.
"Darwin is completely full ... to expand Darwin is not as cost-effective as starting right from scratch with modern technology," Cormick said, noting that Santos-owned Darwin now has access to Australia's Browse and Barossa fields. If you're going to deliver the Greater Sunrise gas to a liquefaction train, "why not put it into a nice clean brand-new properly designed facility rather than bolt it on to something that’s quite inefficient."
That facility, however, does need some designing. There is an "old development concept, but it has to be updated and refreshed," noted Cormick.
Tight Timeline
East Timor wants the project started this year as it watches its key Bayu-Undan field wind down production in 2023.
The country is aiming for first gas production in 2028-30, which means construction — which could easily take five years — needs to start this year or next.
"This momentum [for Greater Sunrise] was there before the conflict in Ukraine," he said, "but that helps. There’s compelling reason why this project, after 48 years, is really going to go forward."
"As the world seeks to decarbonise, East Timor hopes that a plan for a giant carbon capture and storage (CCS) hub will help it find financial backing for a proposed liquefied natural gas (LNG) facility that would process gas from the Greater Sunrise fields."
"We want to have Greater Sunrise developed here in Timor Leste,” Florentino Soares Ferreira, president of East Timor’s National Authority of Petroleum and Minerals (ANPM), told Energy Voice in an interview....Although, he did concede that building an LNG plant in East Timor solely to process gas from Greater Sunrise did not make economic sense. Instead, the ANPM hopes that other potential fields offshore, such as Chuditch and Kelp Deep, can be tied into any development plan."
https://www.energyvoice.com/oilandgas/asia/411563/giant-ccs-plan-in-east-timor-could-help-secure-finance-for-sunrise-lng/
There's nothing new in the article, but at least BOIL is being kept in the spotlight.
"Baron Oil is still involved in two highly successful projects that are set to bring operational and financial success in the coming quarters"
https://www.thearmchairtrader.com/baron-oil-share-price-forecast-andy-yeo-peru/
Keep up the excellent, well-informed posts, HFB.
Ignore the halfwits, the feckless, the indolent, those clearly having suffered the demise of an exenterated cranium, and whose mother was a hamster and whose father smelled of elder berries!
The Timorese government is like a schoolboy holding tightly to a large bag of sweets after some so-called friends nicked some of them.
Australia pocketed $8 billion that should rightfully have been Timor Leste's. The bag of sweets has been held onto very tightly ever since, and it has been a long road to rebuild trust.
The Timorese government is between a rock and a hard place - and largely responsible for that themselves. They should have taken action to monetise Greater Sunrise a long time ago. Economic disaster has been at their doorstep for some time, with the fast depleting Bayu-Undan field. It came to a head back in 2018, "The reality is, if Greater Sunrise is not developed soon, the economic viability of the state will be undermined. This would have potentially wide-ranging and disastrous implications for the security and livelihoods of ordinary Timorese citizens as well as the hard-fought sovereignty and independence of the state."
If you read this article from 2018 you'll see that not much has changed - and the same players are back in government now: https://www.internationalaffairs.org.au/australianoutlook/the-timor-sea-disputes-resolved-or-ongoing/
The one thing that has changed though is that we're four years on - and every month that goes by heaps more pressure on the Timorese government to safeguard and to secure its economic future. They have to act now - they really do not have a choice.
Agreed, Meadow1948. It's one thing to rationally talk up the upside potential of BOIL, but it's quite another to throw around comments about the SP suddenly shooting through the roof for no reason other than sentiment. M Cap, as HFB has said many times, will be the thing that drives this - and there won't be any uplift of the M Cap until the assets have a clear route to monetisation. So until the TL government gives the nod, and JVs and/or buyouts are formerly announced, we'll stay right where we are. Nothing is for certain, but given all that we know there is a strong likelihood that this will be our year. We wait. Only time will tell.
Until we hear further from BOIL, all we have is their previous statements in their report of September 2021.
Chuditch: "Initial reprocessed data are scheduled to be delivered in Q4 2021 with final data
due in Q2 2022."
Dunrobin: "The key component of the Phase A work is 3D seismic reprocessing which is expected to be delivered
during H1 2022 and which is aimed at reducing the range of volumetric uncertainty and subsurface
risk as well as providing potential drilling location candidates."
18 months old, MisterPositive, but perhaps new to some :)
News of the 3D seismic analysis and interpretation will come at just the right time...alongside a JV or a major knocking on the door :)
Yes, HFB
"There are politicians, and there are fools; but then I repeat myself." Mark Twain
“Finance Minister Rui Gomes said that “the development process of The Greater Sunrise wells is ongoing”, adding that preliminary meetings have already been held in Australia.
It is recalled that The Minister of Petroleum and Minerals (MPM), Vitor da Conceição, had previously said that the discussion process of Greater Sunrise was evolving at a good pace, with a mutual understanding.
The governments of Timor-Leste and Australia have completed the contractual regime for the construction of projects in the Greater Sunrise field because they are in the process of discussing the production sharing contract.”
http://tatoli.tl/pt/2022/05/10/governo-discute-desenvolvimento-do-campo-petrolifero-greater-sunrise/?msclkid=45b33886d12111ecb3f09779d6bf1ae1
The sooner the Corallian deal is done, the better. RBD will get 50% of the sale price. That should give RBD more than sufficient funds to drive forward the Dunrobin project.
"Firstly the bits we do know. RBD are paying what must be a token £250/- for six licences from Corallian of which four in particular have ‘significant prospective potential’ in addition to Oulton with its de-risked contingent resource, which seems like a sensible deal given that they are getting rid of a class asset in Victory for it.
RPS estimates a total Victory field 2C or best / mid case technically recoverable contingent resourced of 179bcf dry gas and as the field will be ‘economically developed as a direct subsea tie-back to the Total operated Greater Laggan Area gas pipeline’, which has an access tee for third party business located 17km south of the Victory discovery well 207/1-3 looks like a no-brainer for somebody. If, for example it wasn’t someone who had the best access to Greater Laggan I would want to know why…
Reabold clearly like Victory as they have said often enough, but they also like West Newton which means making a choice of which horse to back given the tall order of financing both projects. Their policy to ‘identify the optimal time to exit a project is critical to Reabold’s strategy. Doing so effectively will allow the Company to scale and deploy more capital over time’.
So, with bidders for Corallian only wanting the Victory asset and Reabold happy to take on the licences primarily to ensure the deal was consummated, it looks like it all works. RBD will get half the cash from the sale less the £250/- for the detritus, which I am reliably informed will rebuild the cash situation ready to spend at West Newton. All we need now is to see who the buyer is and how much Victory has gone for…"
https://www.malcysblog.com/2022/05/oil-price-igas-reabold-empyrean-sdx-gran-tierra-and-finally/?msclkid=89d77e9cd11b11ec852c42d9924c67d2
I do - that's at least the third time I've said that...and I don't mean on this BB ;) :)