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Geology and Production in Timor-Leste

 

Introduction

Timor Leste is a small country with Australia to the south of its maritime boundaries and Indonesian Province of East Nusa Tenggara to its western land border (Figure 1). The offshore region to the south in the Timor Sea has been demonstrated to have a working petroleum system. Sizeable oil and gas volumes have been produced from this region, including from the Bayu Undan Field, the main contributor to the country’s Petroleum Fund. Petroleum prospectivity has also been demonstrated onshore with exploration wells slated to be drilled next year. This article discusses the petroleum geology of Timor Leste and its hydrocarbon potential.

Map

Figure 1: Location of Timor Leste. Source: Encyclopaedia Britannica

Tectonic Setting

Timor Leste occupies the eastern half of Timor Island, a part of the Southeast Asian Archipelago, in the Banda Arc collision zone. This zone marks the complex convergence of the Eurasian, Australian, and Pacific tectonic plates, resulting in intense deformation, subduction, and orogeny. Figure 2 illustrates the tectonic setting of the Banda Arc where Timor Island is located. The collision between the northwest continental margin of Australia and the Eurasian plate began during the early Neogene around 12 million years ago (Charlton, 2002). Sedimentary rocks deposited in the Australian continental margin were uplifted to form Timor Island (Fainstein, 2020).

Map

Figure 2: Tectonic setting of the Banda Arc. Source: Charlton, 2012

Petroleum System

The stratigraphy of Timor is summarised in Figure 3. The key elements in the Timor Petroleum System occur within the Late Triassic and Jurassic section, although onshore plays are described in the Eocene and the Plio-Pleistocene.

Figure 3:  Comparative stratigraphy between onshore and offshore Timor Leste. Source: Fainstein, 2020

Offshore in the deep-water province, the Early Jurassic section forms the main petroleum system. It includes the Plover Formation and the Elang Formation. The Plover Formation was deposited during the Early to Middle Jurassic, prior to the breakup of Gondwana. It comprises prograding fluviodeltaic sediments, including sandstones, shales, and coals. The Elang Formation represents the algal-marine source rocks deposited during the Middle to Late Jurassic (Young, 1995).

Numerous oil and gas seeps have also been observed throughout the Timor Island as illustrated in Figure 4. Across the territory, oils have been described as greenish and brown to black, sweet with sulphur contents of 0.06-1.36%, with gravities ranging from 14.5 – 44.6 (deg) API (Charlton, 2018).

 

Graph

Figure 4: Oil and gas seeps in Timor Island. Source: La’o Hamutuk

In December 2015, Timor Gap, the national oil company of Timor Leste, was awarded exclusive hydrocarbon exploration rights to the onshore block as seen in Figure 5. Timor Resources is an Australian company incorporated in 2016 for the sole purpose of exploring the onshore potential of Timor Leste. In 2017, Timor Gap partnered with Timor Resources in a PSC to explore Blocks A and C (Charlton, 2018). Timor Resources completed 310 km of 2D seismic in 2018 and early 2019, and had planned to drill five exploration wells on Timor-Leste’s south coast this year (source: Rigzone), delayed to 2021 due to COVID-19 (source: Upstream Online).

Block A has three play types: a) the Pliocene-Pleistocene age Viqueque Formation, syn-orogenic basin, b) Lower Allochthon (Permian-Eocene) Lolotoi Complex, and c) The Triassic-Jurassic age Babulu/Aitutu and Wailuli Formations beneath a regional metamorphic overthrust (source: Timor Resources via La’o Hamutuk).

Graph

Figure 5: Timor Leste current PSC license areas. Oil fields are in green, gas fields in red. Timor Gap was awarded exploration rights onshore on blocks A, B, and C. Source: Charlton, 2018

Hydrocarbon Production in Offshore Timor Leste

Hydrocarbon exploration in the Timor Sea started in the 1960s. This early phase led to the successful gas discoveries in the Sunrise and Troubadour Fields in 1974. However, political uncertainties and international maritime boundary issues in the region hindered exploration. In 2003, Timor Leste signed the Timor Sea treaty with Australia, which provided for a Joint Petroleum Development Area (JPDA) (Figure 6). Timor Leste and Australia were granted 90% and 10% of the revenue from the JPDA respectively. This is incorporated into the Timor Leste Production Sharing Contract (PSC) scheme by assigning Australia a 10% revenue share of the First Tranche Petroleum and the Profit Petroleum.

Figure 6: Map of the Joint Petroleum Development Area within the Timor Sea. Source: Australian Department of Foreign Affairs and Trade via ABC

 

Several oil and gas developments have been completed in the JPDA. All the known producing hydrocarbon reservoirs of the offshore are Jurassic sands (Fainstein, 2020).  Some notable oil and gas fields in the JPDA area are summarised below:

 

  • Buffalo Field: Buffalo is an oil and gas field is located in the WA-523-P exploration permit in the JPDA. It was initially operated by BHP, which commenced production in 1999 from Jurassic reservoir sands. It produced 20.5 MMstb of under-saturated oil from four production wells, before being decommissioned in 2004 (source: Offshore Energy). It is currently estimated to hold 2C contingent resources of 31 million barrels of oil equivalent (source: Carnarvon). Carnarvon Petroleum acquired 100% the WA-523-P permit in 2016 and is currently redeveloping the field (source: Carnarvon).

 

  • Kitan Field: Kitan Field is located in the JPDA, 170 km southeast of Timor Leste at water depth of 350 m. The field was discovered in 2008. Eni was the operator with 40% interest, while its joint venture partners Inpex had 35% and Repsol subsidiary Talisman Resources had 25% interest. The field’s reserves were estimated to be in the range of 30-40 million barrels of oil (source: Reuters). First oil from the field flowed in October 2011 (source: Eni). The field achieved its peak oil production rate of 45,000 bpd in 2012 (source: Offshore Technology). The field was only produced for four years between 2011 and 2015 before being abandoned. Total production was approximately 60 MMboe (source: S&P Global).

 

  • Bayu Undan Field: The Bayu Undan Field is located in 250 km south of Timor Leste at a water depth of 80 m. The field complex was discovered in 1995. Commercial production of the field began in April 2004, delivering 115,000 bpd of condensates and LPG. Bayu Undan’s total recoverable field reserves is between 250 and 400 MMbbl of hydrocarbon liquids and 3.4 Tscf of gas (source: Offshore Technology).

     

    The gas-condensate field is operated by ConocoPhillips, which has 57.2% stake. It has long been the country’s key production asset. The Bayu Undan project includes an offshore facility, pipeline, and LNG plant. The co-ventures are Santos (11.5%), INPEX (11.3%), Eni (11%), Tokyo Electric Power Company and Tokyo Gas (9.2%). In October 2019, Santos sold 25% interest in the Bayu Undan field to SK E&S (source: Offshore Engineer Digital). Santos plans to drill infill wells to extend oil production in Bayu Undan, so the cessation of production date is uncertain (source: Santos).

 

  • Greater Sunrise Field: The maritime border settlement in 2018 allowed for the development of the Sunrise and Troubadour gas and condensate fields, collectively known as the Greater Sunrise fields. The fields were discovered in 1974 in 100 to 600 m water depth, and hold gross contingent resources of 5.1 Tcf of gas and 225.9 million barrels of condensate (source: Woodside).   The fields are located approximately 150 km southeast of Timor Leste and 450 km northwest of Darwin, Northern Territory, Australia. The Greater Sunrise fields are operated by Woodside Petroleum. After acquiring Shell and ConocoPhillips’s equity for a total of US$650 million in April 2019, Timor Leste holds a 56.56% majority share in Sunrise (source: Energy Voice).

    Woodside’s plan for Greater Sunrise is to develop a Floating LNG (FLNG) plant or tie-back via pipeline to Australia. Discussion for this plan is still ongoing as the Timor Leste government reassesses its economic feasibility (source: Energy Voice).  

Conclusion

Timor Leste, which is situated in the eastern half of Timor Island, and has unique geology with magnificent crustal structures and stratigraphy. The island also has numerous oil and gas seeps. Hydrocarbon exploration onshore has hinted at various petroleum plays from Permian to Pleistocene age. Offshore in the Timor Sea, the geology is an extension of the well-established Australian Northwest Shelf hydrocarbon province. Commercial volumes of hydrocarbons have been discovered within the Jurassic section, for example the Bayu Undan and Greater Sunrise fields. Current oil and gas production is only from the Bayu Undan field in the JPDA, but future developments may include a possible restart of Buffalo Field and the Greater Sunrise project.