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THE AUTHORITY ON ENERGY
 
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TIMOR LESTE
October 2011
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www.petroleum-economist.com
 
1Reprinted from PETROLEUM ECONOMISTwww.petroleum-economist.com/ October, 2100.
The great game of Greater Sunrise.
22 September, 2011
A solution to the impasse over the Greater Sunrise gas development is at hand, but requirescompromise and transparency from Timore Leste and Woodside. Damon Evans reports from Dili.
A HUGE hydrocarbon bonanza, known as Greater Sunrise, sits off the south coast of fledgling countryTimor Leste. The resource, discovered in 1974 and estimated to hold 5.12 trillion cubic feet (cf) of natural gas, as well as 226 million barrels of condensate, has the potential to provide a better futurefor the impoverished nation.But a bitter battle between the government of Timor Leste and the Woodside-led Sunrise jointventure – the project operator – has halted development, jeopardising the future of the project andTimor Leste. This small Southeast Asian country, highly dependent on its oil and gas resources to fuelits small, developing economy, has been locked in a dispute with the consortium over how oil andgas from the Sunrise and Troubadour fields, which straddle Australian and Timor Leste waters, is tobe processed.For the 1.1 million Timorese – of which more than 40% live below the poverty line – it’s crucial asolution to the impasse is found. The Greater Sunrise development has the potential to help theTimorese escape from poverty, and achieve energy independence and security.Not forgetting the shareholders in the Sunrise joint venture – Woodside (33.4%), ConocoPhillips(30%), Shell (26.6%) and Osaka Gas (10%) – which have spent vast amounts of time and moneystudying development options and deserve a return on their investments.
 
2Under a governing treaty – the Treaty on CertainMaritime Areas in the Timor Sea (CMATS) – betweenAustralia, Timor Leste and the Sunrise partners,Woodside is required to develop the gasfield to thebest commercial advantage. But in recent times, talksbetween the Australian operator and the governmentin Dili have virtually collapsed. Both parties holdopposing views on the most commercial developmentroute, as well as rights to downstream processing –worth billions of dollars in revenues.Timor Leste’s leaders and spokesmen on the Sunrisedevelopment have been in a technically demandingand politically challenging position since the fall of thecountry’s first government in 2007. They have scanttechnical and commercial resources compared withthose available to Woodside and its partners. And theAustralian government has remained largely absentfrom the debate, perhaps because of a conflict of interest. Consequently, Timor Leste has been isolatedand left to deal with Woodside alone.The Greater Sunrise resource is jointly administered byTimor Leste and Australia, and requires the approval of both governments before development can proceed.Australian minister for resources and energy MartinFerguson told
Petroleum Economist 
that his governmenthas no preference for any particular developmentconcept, other than to ensure that it occurs in accordancewith CMATS obligations.Woodside is pushing for a floating liquefied natural gas(FLNG) option; while Timor Leste – which as co-resourceowner has a right of veto – is determined to pipe the gasacross the technically challenging deep-water TimorTrough to a proposed LNG-export plant on its soil. It saysthis option will bring numerous economic benefits for itspeople, as well as forming part of Timor Leste’s bold visionto make its south coast a petroleum province.Having invested about A$30 million ($31 million) and300,000 man-hours studying the various developmentconcepts, Woodside concluded that FLNG is the bestcommercial option – gas would be liquefied offshore,using new ship-based technology, for direct export tointernational markets. But Timor Leste refuses to acceptthe results.
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