Dili, East Timor, 01 Feb – The exploration of oil in East Timor has entered its final stages and by mid March the proposals for 11 exploration areas tendered by the government are due to be handed in, officials have said.

At the beginning of 2005 the seismic study of the 30,000 kilometer area to be put up for tender, which was carried out by a Norwegian-Chinese joint venture (GGC – BGP Petro China), showed that there were more than 20 offshore exploration points in the sea off Timor, between the country’s coast and the Joint Petroleum Development Area (JPDA) with Australia.

The Timor authorities said they considered the results “a great success,” and the report said that there was “strong” proof that the area had an active oil system.

The potential of the offshore area is the cause of much hope in East Timor, but the available data is limited, and in the last 30 years there has been practically no oil exploration off the Timor coast.

At the end of 2005, the Timor authorities presented the tender four times overseas, in Singapore, London, Calgary and Houston in September and in November they held a workshop for potential investors in Dili.

The deadline for handing in pre-qualification documents is mid-February and signing of exploration contracts with winners should take place from May onwards, two months after the proposals are presented, the Timorese authorities have said.

Only proposals from companies with capitalization of over US$20 million will be considered for the tender, and candidates should present separate proposals for each of the exploration areas.

The 11 concession areas are next to the JPDA, which includes two international-level discoveries – Bayu-Undan, which is already in production, and Greater Sunrise/Troubadour, which is still in the project phase.

The oil and gas reserves in these two areas are valued at US$30 billion (25 billion euros), and exploration revenues will be split between East Timor and Australia.

With exploration in the JPDA, and if the Greater Sunrise platform begins production by 2016, East Timor, the world’s newest nation, is expected to net around US$18.7 billion , according to the agreement signed with Australia on January 12.

Oil revenues will go to an Oil Fund created to control public spending and inflation, and reduce the impact of price changes on East Timor’s economy.

IN October 2005, the value fo the fund stood at US$330 million, and it is expected to grow at a rate of around US$2 million epr day over the next few years. (macauhub)