Carnarvon Petroleum Limited Provides Buffalo Project Update
Wednesday 7 March 2018
Carnarvon Petroleum Limited provided the following update regarding the status of the UNCLOS Compulsory Conciliation Proceeding between Australia and The Democratic Republic of Timor-Leste.
The Australian and Timor-Leste Governments signed the treaty establishing their maritime boundaries in the Timor Sea (“Maritime Boundary Treaty”). The Treaty will enter into force when Australia and Timor-Leste have notified each other in writing that the requirements for entry into force have been fulfilled. For Australia, this requires the Treaty together with relevant and associated legislation to be presented to its parliament for approval. For Timor-Leste, this requires ratification of the Treaty by the National Parliament, and subsequently the President of the Republic’s Order for the treaty to be published in the official gazette.
Carnarvon’s 100% owned WA-523-P permit (Buffalo project) is affected by the boundary, most notably the Buffalo oil field will now fall within Timor-Leste’s exclusive jurisdiction. A portion of WA-523-P will remain within Australia’s exclusive jurisdiction.
The Treaty provides that security of 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.
Carnarvon looks forward to continuing to work with the Autoridade Nacional do Petróleo e Minerais (ANPM) and other relevant authorities in Timor-Leste on the Buffalo project. Their objective is to have the required production sharing contract (“PSC”) in place once the Treaty is ratified by Australia and Timor-Leste. In addition to this, Carnarvon has been assured that it may proceed with operation and preparatory activities for redeveloping the field prior to the ratification of the Treaty.
The discussions held so far with officials from Timor-Leste make it clear Carnarvon and Timor-Leste are equally agreed to achieve first oil as soon as possible. Carnarvon believes there to be a number of benefits in developing the field within the Timor-Leste framework and therefore, the near-term priorities are to enter into a PSC and finalise the preferred options for developing this valuable resource.