PRESS RELEASE
Dili, Timor-Leste – June 13, 2025
The Autoridade Nacional do Petróleo I.P. (ANP) formally received a notification on June 4, 2025, from the Contract Operator of Bayu-Undan, representing the Bayu-Undan Joint Venture (BUJV), regarding the cessation of production at the Bayu-Undan field. The BUJV decision to cease production is mainly driven by the limited gas market in the Australian Northern Territory and high operational costs due to aging facilities. The Bayu-Undan field ceased production permanently on June 4, 2025, at 10:52 Dili time.
Following this cessation, and in accordance with Section 2.6 of the Production Sharing Contracts PSC-TL-SO-T 19-12 and PSC-TL-SO-T 19-13 (‘the PSCs’), the PSCs have now been terminated. Consequently, the Decommissioning Agreement, signed on November 29, 2023, became effective on June 4, 2025, in accordance with Clause 3.1 of the Agreement.
The Bayu-Undan gas condensate field was initially discovered by the Bayu-1 exploration well in March 1995, and subsequently appraised through ten (10) additional exploration and appraisal wells between 1995 and 1998. The first phase of development drilling involved 10 wells and was conducted in 2003, leading to the commencement of hydrocarbon liquids production in 2004. The Bayu-Undan Field Development Plan, initially approved in 2000, was amended in 2003 to allow for gas export sales to Darwin LNG, which began in 2006. In November 2023, as per information provided by the operator, the circumstances arose at that time that contributed to the Bayu-Undan gas production reaching the minimum gas feed rate (the safe operating limit) at DLNG at 72 MMscf/d. To ensure the cessation of gas supply to DLNG is undertaken in good legal administrative order and to maximise economic recovery of the remaining hydrocarbon from the Bayu-Undan field, ANP and BUJV engaged in discussion on the legal administrative process in terms of completion of Feed Gas Sale and Purchase Agreement (FGSPA) and the alternative market. With ANP’s approval, BUJV entered into an agreement, namely a Gas Sale Agreement (GSA) with Power and Water Corporation (PWC) Darwin to supply Bayu-Undan gas to the Australian domestic market until production was officially ceased on June 4, 2025.
According to the latest assessment, the Bayu-Undan field gas recycle project has estimated GIIP of 7.7 Tscf raw gas. To date, the field has produced 5.99 Tscf raw gas which includes ⁓5.5 Tscf lean gas and ⁓400MMstb liquids. The remaining ⁓3 Tscf recoverable raw gas is subject to further technical and economic feasibility assessment.
From 2004 to 2025, the Bayu-Undan field achieved several major operational milestones, including three successful development phases that resulted in a total of 34 wells. Additional efforts such as well interventions and other technical optimizations aimed at extending production has contributed to the multiple extension of the term of PSCs, with the latest term extended until 30th June 2026. Furthermore, the Bayu-Undan production operation has served as a benchmark for excellence in safely operating the Bayu Undan production facilities in accordance with Health, Safety, and Environment (HSE) standard, recording zero fatalities and no environmental incidents throughout its operational life.
Since 2008, ANP has acted as the regulatory authority for the petroleum sector in the Former Joint Petroleum Development Area (JPDA). When the Maritime Boundaries Treaty (MBT) entered into force on 30 August 2019, the Former Joint Petroleum Development Area (JPDA), including the Bayu-Undan field, transitioned into full Jurisdiction of Timor-Leste under the supervision of ANP, the regulatory authority for the petroleum sector in Timor-Leste. ANP wishes to acknowledge the strong and productive collaboration with BUJV over the years and extends sincere appreciation to all past and present Contract Operator and its Joint Ventures.
Looking ahead, ANP will continue to work collaboratively with the Contract Operator acting on behalf of BUJV, to ensure full compliance with Decommissioning Agreement, the applicable decommissioning regulatory framework and commitment to the approved decommissioning plan. In parallel, the Ministry of Petroleum and Mineral Resources has initiated, and will continue, discussions with BUJV to explore future utilization options for the existing offshore Bayu-Undan production assets that may benefit the State and other relevant stakeholders.
*End*
