Santos concludes talks for Timor Gap’s entry into the Bayu-Undan JV

Australian energy company Santos on September 2 announced that the Bayu-Undan joint venture has agreed to a sale and purchase deed (SPD) to transfer a 16% interest in the Bayu-Undan upstream project to Timor-Leste's state-owned Timor Gap.

The deed has an economic date of July 1, 2024, with the transaction expected to be executed in mid-September. Additionally, a seventh extension of the production sharing contract to June 2026 has been confirmed.

The Bayu-Undan upstream project includes an offshore petroleum field, along with offshore production and processing facilities located in Timor-Leste. Prior to Timor Gap’s entry into the joint venture, the participants were Santos, SK E&S, Inpex, Eni, and Tokyo Timor Sea Resources.

As a result of this transaction, Santos, the operator of the project, will reduce its stake from 43.4% to 36.5%. The other partners will also see their stakes reduced: SK E&S will hold 21%, Inpex 9.6%, Eni 9.2%, and Tokyo Timor Sea Resources 7.6%.

Located approximately 500 km northwest of Darwin in Timor-Leste's offshore waters, the Bayu-Undan field has been operational since 2004. The project has generated over $25bn in revenue for Timor-Leste and currently supports about 350 onshore and offshore jobs, with more than half of the offshore workforce being Timorese, Santos said.

Bayu-Undan continues to produce gas for the Australian domestic market under a gas sales agreement with the Northern Territory’s Power and Water Corporation, alongside the production of valuable liquids.

"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 Santos CEO Kevin Gallagher.