About the Joint Petroleum Development Area and Greater Sunrise gas fields
The Joint Petroleum Development Area (JPDA) and the Greater Sunrise fields are areas of Timor Sea in which Australia and Timor-Leste work together to facilitate development of resources.
Joint Petroleum Development Area (JPDA)
The JPDA is situated in the Timor Sea between Australia and Timor-Leste.
It was established by the 2003 Timor Sea Treaty (TST), which provides the framework for all petroleum exploration and development within the JPDA. The TST is an interim agreement that is without prejudice to the position of either country on their maritime boundary claims.
The TST provides that upstream taxation revenue from petroleum production in the JPDA is split between Timor-Leste and Australia on a 90:10 basis.
The TST creates the Joint Commission to establish policies and regulations for petroleum activities in the JPDA, and oversee the work of the Designated Authority. The Joint Commission is comprised of a minimum of one Australian representative, and two Timorese representatives.
Day-to-day regulation of the JPDA is managed by the Designated Authority, which is currently the Timor-Leste offshore regulator, the Autoridade Nacional do Petróleo (ANP). The ANP regulates operations in the JPDA on behalf of both countries.
There are currently two operating fields in the JPDA. Bayu-Undan is estimated to contain 3.4 trillion cubic feet (TCF) of LNG and 110,000 barrels of condensate. ConocoPhillips operates the Bayu-Undan field in a joint venture together with Eni (11 per cent), Santos (11 per cent), INPEX (11 per cent), and Tokyo Timor Sea Resources Pty (9 per cent).
The Kitan Field commenced production on 10 October 2011. It is estimated that up to 34.6 million barrels of oil will be recoverable from the Kitan oil field. The Kitan field is operated by Eni (40 per cent) and Joint Venture partners INPEX Timor Sea Ltd (35 per cent) and Talisman Resources Pty Ltd (25 per cent).
Further information on developments within the JPDA, including revenue received by both Timor-Leste and Australia, is available from the Autoridade Nacional do Petróleo website.
Greater Sunrise gas fields
The Greater Sunrise (GS) gas and condensate fields overlap a combined area of exclusive Australian jurisdiction (79.9 per cent of the fields) and the JPDA (20.1 per cent of the fields).
It is estimated that the fields contain 5.1 trillion cubic feet of liquefied natural gas (LNG) and 226 million barrels of condensate. Under Article 9 of the TST, Timor-Leste and Australia agreed that any deposit that extends beyond the boundary of the JPDA would be developed as a single entity for management and development purposes, ensuring that neither country can develop overlapping fields unilaterally.
In addition to the TST, two further agreements between Australia and Timor-Leste govern development of the GS fields:
- International Unitisation Agreement—The International Unitisation Agreement (IUA) between Timor-Leste and Australia which entered into force on 23 February 2007, gives effect to Article 9 of the TST. The IUA established:
- a Sunrise Commission to provide strategic direction and facilitate the approvals processes of the Australian and JPDA regulators
- the arrangements relating to day-to-day administration of GS
- criteria for approval of a Field Development Plan
- dispute resolution processes.
The IUA stipulates that GS will be developed by a commercial Joint Venture. The Joint Venture is required to submit a Field Development Plan to the Regulatory Authorities before GS may be developed. In Australia, the Regulatory Authority is the Department of Resources, Energy and Tourism, which regulates 79.9 per cent of the fields on behalf of Australia, with the ANP regulating the 20.1 per cent of the fields which is within the JPDA on behalf of both Australia and Timor-Leste. Both regulators must approve any proposed Field Development Plan. Neither country can unilaterally develop the field.
The Treaty on Certain Maritime Arrangements in the Timor Sea—the The Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) entered into force on 23 February 2007, and provides that all upstream petroleum revenues from the GS fields will be shared equally between the two countries.
The commercial Joint Venture for GS is led by Woodside Petroleum Limited (operator and 33.44 per cent shareholder), and includes Royal Dutch Shell (26.56 per cent), ConocoPhillips (3 per cent) and Osaka Gas (10 per cent). The Joint Venture holds two Retention Leases for the Australian portion of the fields, and two Production Sharing Contracts for the JPDA portion of the fields, giving the Joint Venture exclusive rights to develop the GS fields.
On 29 April 2010, Woodside announced its preference to develop GS using a floating LNG (FLNG) processing plant. This would be the second FLNG development in the world after the Shell-owned and operated Prelude FLNG development in the Browse Basin off the Northwest coast of Western Australia, which is scheduled to begin production in 2016.