TIMOR GAP and Timor Resources have signed an agreement to resolve their dispute over expenditures for the exploration of two onshore blocks in Timor Leste. Significantly, the agreement allows the joint venture to push forward with appraisal drilling to test oil discoveries in onshore Block A.
Media reports in March 2023 noted that TIMOR GAP, a 50% partner in the consortium, had failed to make its contractual financial contribution for the drilling projects since 2022. Arrears payment of US$11 million was reported then, and Timor Resources announced it would pursue legal action against the Timorese national oil company.
Timor Resources also announced in March 2023 that TIMOR GAP CEO Antonio DeSousa had taken to publicly criticising Timor Resources in the national media. He reportedly said, "If you (Timor Resources) came to me now, I would say you are not welcome, you have no experience, and no money."
Timor Resources said in a statement on 15 March 2023 that sovereign risk for the foreign company had been escalating and that the government allowed DeSousa, as CEO of a state-owned enterprise, to antagonise Timor Resources and other potential investors in Timor Leste, also known as East Timor. The company added that it had provided all the US$67 million in exploration costs for three wells drilled since it started exploring in 2017. All three wells had oil and gas shows, claims Timor Resources.
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Dispute Resolved
On 2 May 2024, both companies met in Dili and signed amendments to their joint venture agreement, which marked a pivotal moment in collaboration efforts towards exploration and development activities, announced Timor Resources.
"Moving forward, both TIMOR GAP & Timor Resource have come to resolve their differences in commercial interpretations. On the 13th of March 2024, the 9th Constitutional Government through the Council of Minister approved a resolution related to the proposal presented by TIMOR GAP to solve the commercial dispute with its JV partner and hence allowing TIMOR GAP to sign the legal documents for setting the path forward. After a series of discussions, both parties have finally aligned and with the singing of today's Settlement Agreement and the amended JOA, both parties will work together to continue the work commitments in the PSCs, which will include the appraisal drillings in Onshore Block A to determine commercial discovery of the wells," according to a statement released ahead of the signing ceremony.
TIMOR GAP with Timor Resource signed the Production Sharing Contract (PSC) with ANP in 2017 for both onshore blocks, PSC TL-OT-17-08 and PSC TL-OT-17-09 & became 50:50 joint venture partner with Timor Resource as operator. Upon signing, the Joint Venture Partner undertook work commitments in the PSC by completing the 2D seismic acquisition in Onshore Block A (Covalima Municipality) in 2018, and Onshore Block C (Manufahi & Ainaro Municipalities) in 2019. The JV Partner then continued to undertake exploration drilling in Onshore Block A and completed three exploration wells between 2021 and 2022, namely Karau & Kumbili wells (late 2021), & Lafaek well (September 2022). The results of these three explorations drilling showed hydrocarbon discovery with the fluid type of as oil and gas or condensate. In
November 2023, Autoridade Nacional do Petróleo (ANP) announced the results of the three wells as "technical discovery".
