Timor-Leste Extends Chuditch Gas Block Contract by 12 Months

en.Wedoany.com Reported - On October 19, UK-based Sunda Energy announced that its wholly-owned subsidiary SundaGas has received approval from Timor-Leste's National Petroleum Authority to extend the current phase of the TL-SO-19-16 Production Sharing Contract covering the Chuditch gas block by 12 months. The contract covers the Chuditch gas field offshore Timor-Leste and is held jointly by SundaGas and Timor-Leste's state-owned energy company TIMOR GAP. The two parties will continue to negotiate arrangements for drilling the Chuditch-2 appraisal well, with plans to complete the signing of relevant binding agreements and obtain regulatory approval by the end of 2026.

Prior to this extension, Timor-Leste's National Petroleum Authority issued a notice of intended termination to the contract parties on June 18, citing the failure to complete drilling of the Chuditch-2 appraisal well by June 18, which constituted non-fulfillment of the minimum exploration work obligation for the third contract year. The regulator granted the contract parties 120 days to submit written representations. Since then, SundaGas and TIMOR GAP have been in continuous consultation regarding the drilling implementation, project operations, and funding arrangements for the appraisal well.

The two parties are discussing increasing TIMOR GAP's working interest percentage in the Production Sharing Contract through assignment of interest, while transferring block operatorship to TIMOR GAP. Under the terms of this extension, the uplift accrual to the Production Sharing Contract cost recovery account is suspended from June 19, 2024 until the actual spudding of the Chuditch-2 well.

New progress has also been made regarding rig arrangements for the Chuditch-2 appraisal well. On October 15, Finder Energy signed a contract with a drilling contractor to deploy the "White Dragon 5" semi-submersible drilling rig for development drilling operations at the Kuda Tasi and Jahal fields offshore Timor-Leste, with the contract including two optional well slots available for use by other operators. Sunda Energy is continuing to coordinate a rig-sharing arrangement between the Chuditch-2 appraisal well and the aforementioned field development drilling program, in accordance with the letter of intent signed by both parties on April 8.