About Timor-Leste

The Democratic Republic of Timor-Leste (sometimes known as East Timor) is a young, dynamic republic situated towards the eastern end of the Sunda archipelago of SE Asia.

The country has a strong cultural heritage built over many millennia. It regained its independence in 2002 and is a vibrant democracy. The main languages spoken are Tetum, Portuguese and English.

The country has a population of 1.3 million and is one of the least developed nations in the Asia-Pacific region, with high poverty levels.

The economy, which uses US Dollars, is substantially dependent on revenues from hydrocarbons, principally from one gas field, named Bayu-Undan. This field has been responsible for the lion’s share of GDP since independence but is now near the end of its production life. 

Bayu-Undan has funded a Sovereign Wealth (Petroleum) Fund, which continues to sustain the state budget. At the end of 2023, the Petroleum Fund amounted to c.$18bn. Beyond gas proceeds, the largest revenues come from overseas remittances and agricultural products (e.g., coffee), but these are very limited by comparison.

As a result of its economic situation, the Timor-Leste government is keen to see new resources matured, in both the oil and gas and nascent mining sectors. This drive leads to strong alignment between industry and the regulator (ANP) and state-owned energy company TIMOR GAP in seeking to expedite the safe, reliable development of the nation’s resources.

Oil and gas exploration has recommenced in the onshore southern region of the country. The largest resources however sit offshore, with the Bayu-Undan, Greater Sunrise and Chuditch gas fields. With Bayu-Undan now depleted, the focus turns to the planned development of the Greater Sunrise fields and the appraisal of Chuditch, operated by Sunda Energy.

Timor-Leste offers a favourable, safe business environment, in a highly collaborative partnership with government. The country is an active participant member of the Extractive Industries Transparency Imitative (EITI), ensuring high standards of compliance and integrity.

Timor-Leste offers attractive terms in its offshore Petroleum Sharing Contracts, as outlined below

• 5% Royalty
• 100% cost recovery, no annual limits
  • Exploration and Appraisal costs
  • Capital development costs
  • Operating costs (including decommissioning pool)
  • Uplift at (11% + LTBR)
• 60% Contractor : 40% State Profit Split
• 30% Corporate Taxes
• Straight line depreciation
• Supplementary Petroleum Tax (SPT) of 22.5% over 16.5% IRR