Shell Australia and the Government of Timor-Leste have entered into a Sales and Purchase Agreement (SPA) for the sale of Shell’s 26.56 per cent interest in the Greater Sunrise fields for a sale of $US 300 million.
The Sunrise and Troubadour gas and condensate fields, collectively known as the Greater Sunrise fields, are located approximately 150 kilometres south-east of Timor-Leste and 450 kilometres north-west of Darwin in the Northern Territory.
The fields were discovered in 1974 and hold gross (100 per cent) contingent resources of 5.13 trillion cubic feet of gas and 225.9 million barrels of condensate.
Previously, a joint venture (JV) between Woodside Energy (operator; 33.4 per cent interest), ConocoPhillips (30 per cent), Royal Dutch Shell (26.6 per cent) and Osaka Gas (10 per cent) held commercial rights over the Greater Sunrise project, however in early October ConocoPhillips announced it would be selling a 30 per cent stake to the Government for $350 million. Soon the Government of Timor-Leste will own a 56.56 per cent ownership of the asset.
Timor-Leste’s Special Representative Mr Xanana Gusmão said that Timor-Leste appreciates Shell’s willingness to sell the interests in the project.
During Mr Gusmão’s ‘World Energy Forum of the Atlantic Council’ address in Abu Dhabi in September, he stressed that multinational companies must assume their responsibilities towards small countries as part of their social licence to operate.
“Shell’s attitude throughout the negotiations shows that it is ready to consider not only its commercial interests but also the interests of small nations,” Mr Gusmão said.
The Special Representative further commended the open and honest discussions between the Parties’ delegations and clarified that Timor-Leste sees Shell as a good partner and friend and that this transaction reaffirms their commitment for the future.
EVP for Shell Australia, Zoe Yujnovich said the transaction will allow the Timor-Leste Government and JV partners to pursue their aspirations for the Greater Sunrise development.
“We respect the Timor-Leste Government’s determination to develop the Sunrise fields through an onshore LNG facility on its south coast,” Ms Yujnovich commented.
“Although we formed different views about the optimal development scenario, we understand the priorities of the Timor-Leste Government and wish it well in pursuing its aspirations to develop this important resource for the nation.”
It is important to note however that the purchase of Shell’s interest is conditional on funding approval from the Timor-Leste Council of Ministers and National Parliament, as well as regulatory approvals and partner pre-emption rights.
More information on the announcement can be found here.