A Shift to LNG in East Timorese Waters

In a landmark deal, ConocoPhillips has agreed to sell its 30% stake in the Greater Sunrise natural gas and condensate fields in the East Timor Sea to the government of East Timor for US$350 million. For the first major company to enter the fledgling nation back in 2006, ConocoPhillips has spearheaded much of the upstream developments in Timor-Leste, as the country is also known, which still form the backbone of its economy. With the great prizes waiting in Greater Sunrise, why this sale and why now?

Because the tectonic plates powering Timorese upstream has shifted. After years of disagreements – including a spying scandal that was taken to the international court – Timor-Leste and Australia signed a historic treaty this year in March. The deal settled the dispute over the maritime boundary between the two countries, delineating the sea and the position of the Greater Sunrise fields officially for the first time. Estimates suggest that up to US$65 billion in potential reserves lie within Greater Sunrise, and for East Timor, developing this is necessary to replace its maturing Bayu Undan condensate field. Though the issue of whether the gas should be piped to East Timor or Australia for processing remains yet resolved, the sale by ConocoPhillips can be seen as a move to bolster the position of the government in the development of the field.

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