Carnarvon Petroleum has agreed in principle to fundamental terms of a production sharing contract (PSC) with the Timor-Leste government agency ANPM regarding its Buffalo offshore project.
Carnarvon said on Monday that the aim was to complete the PSC and prepare it for signing upon the ratification of the Maritime Boundary Treaty between the Australian and Timor-Leste Governments.
The company is the operator and 100% owner of the WA-523-P permit, which contains the Buffalo oil field, set in the Bonaparte Basin.
After the Australian and Timor-Leste Governments signed the treaty establishing their maritime boundaries in the Timor Sea, the WA-523-P permit was affected by the boundary with the Buffalo oil field falling into Timor-Leste’s exclusive jurisdiction, while a portion of the permit remained within Australia’s exclusive jurisdiction.
The ratification of the treaty will provide security that title and legal rights currently held by Carnarvon will be preserved through conditions equivalent to those already in place under Australian domestic law. Special legislation will also be enacted by Timor-Leste to ensure the Buffalo oil field redevelopment will proceed under equivalent fiscal terms to those in place under Australian domestic law.
At the same time, the PSC will assure that Carnarvon may proceed with operation and preparatory activities for redeveloping the field before the ratification of the treaty.
Carnarvon said it was working with the governments of both countries to enable drilling of a well in the Timor-Leste jurisdiction during 2019.
Carnarvon seeking farm-in partner
“Towards the end of 2018, Carnarvon commenced a process to introduce a partner to the Buffalo project. Acquiring a suitable partner will assist with financing the project which will be vital as Carnarvon works towards bringing both the Dorado and Buffalo fields into production,” the company said.
During the past financial quarter which ended on December 31, 2018, Carnarvon submitted the environmental plan for the drilling of up to three wells in the field. The company stated that finalizing the environmental plan in the coming months would be an important step towards redeveloping the oil field.
Carnarvon also completed a field surveillance program in the area of the Buffalo Field Redevelopment Area. The survey indicated there were no impediments to locating the wells in the surface locations that were ideal for targeting the identified attic of oil.
The Buffalo field was originally developed using four wells drilled from a small, unmanned wellhead platform installed in 25 meters water depth, tied back to an FPSO.
Production had started in December 1999 at production rates up to approximately 50,000stb/d and terminated in November 2004 after the production of 20.5MMstb of highly-undersaturated, light oil (53°API) from the Jurassic-age Elang Formation.
All existing facilities and wells were decommissioned and removed prior to Carnarvon being awarded the block. Carnarvon secured the exploration permit in 2016.
At this time, per Carnarvon, scoping studies show that the oil field redevelopment is clearly economic on a range of field development options. As a field redevelopment, the project is considered low risk which gives Carnarvon the confidence to advance the project, the company said.
Offshore Energy Today Staff