Hope fueled East Timor ashore as driller hits oil
Brave explorer Timor Resources has encountered ‘significant hydrocarbon shows’ while drilling its second onshore well in East Timor as the company considers an initial public offering (IPO) to raise more funds in its quest to free up the country’s oil potential. Significantly, there are no definitive numbers for the hydrocarbon shows yet, but a lot of hope.
The latest news of an oil discovery has raised hopes of a potential oil bonanza in the country which is heavily dependent on dwindling oil and gas reserves for its revenue. However, analysts warn that there is a long way to go before a commercial discovery is proven, if ever.
The private Australian oil and gas company last October dug the first onshore well, Karau-1, in more than 50 years in the Southeast Asian nation, also known as Timor Leste, as part of a a consecutive exploration drilling campaign. .
The second well, Kumbilli-1, was drilled in PSC TL-OT-17-08, also known as Block A.
However, it is too early to tell if the oil discovery is commercial. “The pay zone is fractured and analysis of the fracture is critical to establishing volumes. Third party technical experts are currently undertaking this scope of work. A full drill pipe test will confirm. This is exciting for the business. ashore in Timor-Leste,” said Suellen Osborne, managing director of Timor Resources.
“IMF data is currently being interpreted, oil samples and tank samples have been flown to labs in Australia. We will have a fixed idea of the volumes which we look forward to sharing with you when we will have all the facts. A full suite of DST test equipment is being shipped to Timor-Leste to perform extensive production testing so that we can confirm the volume,” she told Energy Voice. today.
“Logging shows extensive natural fracturing, an important production feature for a calcareous and Triassic clastic reservoir of this type and which could lead to an upgrade in the net compensation estimate as reservoir characteristics will be better understood,” Timor Resources said in a statement.
“The high pressures encountered in the hole suggest that the reservoir is properly charged to allow oil recovery,” added the explorer.
The results of the first two wells drilled onshore in East Timor, by contractor Eastern Drilling and subcontractor Schlumberger, are very encouraging, said the company, which is committed to unlocking the country’s onshore resource potential.
Timor Resources’ strategy is to advance field development in its vast onshore oil acreage in East Timor with additional exploration wells, production wells, as well as oil storage and export infrastructure. To achieve its objectives, the company intends to partner with strategic financial investors to raise additional capital. Timor Resources also said it is implementing a systematic process to access this additional capital. This can result in a timely IPO of the company.
Timor Resources has an extensive inventory of exploration prospects. Prior to initial drilling, Timor Resources said it had seven defined seismic prospects, with a P50 of 520 million barrels, in its inventory.
Mark Moszkowski, an industry expert who has worked in East Timor and studied its oil sector for more than a decade, remains skeptical. “Half a billion barrels, seriously? One and a half times the oil at Bayu Undan and more than double at Sunrise. At today’s price level, (worth) US$50 billion,” he told Energy Voice.
He added “it would have been very surprising if no oil had been discovered, as there has always been oil in the area as evidenced by the existing wells and seeps”.
Following the drilling at Karau-1 and Kumbilli-1, the company said, “it will secure additional capital to undertake a drilling campaign focused on the five remaining highly prospective earthquake-identified drill targets.”
Any major oil discoveries would be a welcome boon for East Timor, which is heavily dependent on oil and gas revenues. However, production from its sole production field Bayu Undan is in decline and operator Santos plans to close the field within a few years.
recommended for you