timor sea petroleum semina dili presentation 23 mar 2002 by gamckee
DESCRIPTION
A presentation delivered by petroleum engineer GAMcKee at the Timor Sea Petroleum Semina, held in Dili, East Timor, March 23, 2002, only three months before Independence Day on May 20, 2002. New and controversial information concerning maritime law, the value of Timor Sea resources, and onshore LNG possibilities, was donated to the people of East Timor by Oceanic Exploration Company and their Portuguese subsidiary PetroTimor Companhia de Petroleos S.A.R.L In 1974 Portugal awarded these companies a petroleum exploration concession covering the entire Timor Sea, down to the median line between East Timor and Australia. In response to this seminar the Australian government hastily executed its pre-planned "get out of jail" card. This was a unilateral withdrawal from voluntary maritime dispute resolution procedures of international law. See media report at http://www.smh.com.au/articles/2002/03/26/1017089535182.html. And see more of the presentations delivered at the semina at http://www.petrotimor.com/.TRANSCRIPT
East Timor’s petroleum revenue Impact of an Exclusive Economic Zone delimitation on
TIMOR SEA PETROLEUM SEMINAR Sponsored by Petrotimor
Dili, East Timor, March 23, 2002
EEZ
Presentation by Geoffrey McKee • G A McKee & Associates Pty Ltd • Oil & Gas Project Development Services • Sydney • Australia
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
2
• Brief history / background
• 5 July 2001 proposal versus EEZ delimitation - Sunrise - Laminaria / Corallina - Bayu-Undan
• Potential benefit to East Timor of an EEZ delimitation
Impact of an Exclusive Economic Zone (EEZ) delimitation on
East Timor’s Petroleum Revenue
US$40 billion** Additional revenue to East Timor, cumulative as-spent dollars of the day over life of all project scenarios 2000 to 2050 (assumes base oil price escalation of 2.5% in line with forecasted US inflation rate). The present (real, de-escalated) value of this future cash flow is approximately US$21 billion.
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
3
Fronteira Tasiokos nebeIndonesia ho Australiaakorda iha 1972
5 July 2001 Australia / East Timor‘Joint Petroleum Development Area’
90% East Timor / 10% Australia
A17
A16
Laminaria-Corallina
Bayu-Undan
Evans Shoal
Linha klaranFronteira be dalan nian nebe akorda iha 1997
*Source of potential lateral median line EEZ boundaries: UK Hydrographic Office, Law of the Sea Division
Minimum EEZ Entitlement*
Possible EEZ Entitlement*
GreaterSunrise
Zona nebe Timor Loro Sa’e ho Australia diskute hela
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Sunrise gas resource
A16A15
PossibleEEZ Entitlement
(100%)
MinimumEEZ Entitlement
(~80%)
Indonesia 1972 seabed boundary Australia
5 July 2001 JPDA Entitlement (90%)(20%) = 18%
Condensate: 300 million barrelsLNG: 177 million tonnes
2.0 billion barrels of oil equivalent (BOE)
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Sunrise gas resource
Condensate: 300 million barrelsLNG: 177 million tonnes
Energy 2.05 billionbarrels of oil equivalent (BOE)
370 million BOE 1680 million BOE
5-July-2001 proposal
Resources owned Possible resources lost
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Sunrise gas resource - Floating LNG prospect
Condensate: 300 million barrelsLNG: 177 million tonnes
0
50
100
150
200
Thousand BOE per
day
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Production
-1,000
0
1,000
2,000
3,000
US$millions
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Development Capital costs Operating cost (incl. LNG transport)
Combined product sales revenue
Project cash flow
Gross sales revenueUS$80 billion*
* cumulative as-spent dollars of the day over the life of this project scenario. The present (real, de-escalated) value of this future revenue flow is US42 billion.
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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0
400
800
1,200
US
$m
illi
on
s
2010 2020 2030 2040 2050
FTP Profit Oil Company tax
Sunrise FLNG project scenarioGovernment revenue split between East Timor and Australiabased on 5 July 2001 Arrangement (unratified)
As spent dollars-of-the day
0
400
800
1,200
2010 2020 2030 2040 2050
Company tax Resource Rent Tax
East TimorUS$ 8 billion*
Australia US$ 28 billion*
Total government take = $36 billion* The present (real, de-escalated) values of these future cash flows are US4.4 billion and US$15.6 billion respectively
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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0
10
20
30
40
50
US
$ b
illio
ns
5 July 2001 proposal Potential EEZ
Sunrise FLNG development scenarioIndicative government revenue Cumulative dollars-of-the day over project life
East TimorUS$ 8 billion
East TimorUS$ 44 billion
Potential additional revenue = $36 billion
AustraliaUS$ 28 billion
AustraliaNil
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Laminaria / Corralina oil field
July 2001 JPD
A
A17
A18
Minimum EEZ Entitlement
1972 Australia / Indonesiaseabed boundary
Potential resources
198 million BOE
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Laminaria / Corralina oil field
Potential resources
198 million barrels
0
20
40
60
80
100
120
140
160
Th
ou
san
ds
of
bar
rels
per
day
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
-500-300
-100100300500
700900
1,100U
S$
mill
ion
s
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Exploration & appraisal cost Drilling & facilities cost
Operating cost Gross product sales revenue
Production
Project cash flow
Gross sales revenueUS$4.1 billion*
* The present (real, de-escalated) value of this sales revenue is US$4.0 billion.
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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0
50
100
150
200
250
300
350
400
US
$mill
ion
s
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
East Timor FTP East Timor Profit Oil East Timor corporate tax
Laminaria / Corralina development Hypothetical East Timorese revenueif resources were inside East Timor’s EEZAs spent dollars-of-the dayEast Timor PSC fiscal scheme at 100% jurisdiction
US$ 2.0 billion*
* Present Value is US$ 1.9 billion.
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Bayu-Undan gas condensate field
Min
imu
m E
EZ
En
titlemen
t
July 2001 JPD
A
1981 FPSL / 1997 EEZ / Median Line
LPG: 175 million barrelsCondensate: 229 million barrels LNG: 66 million tonnes
Energy 1.05 billionbarrels of oil equivalent (BOE)
Current joint development proposal East Timor 90% / Australia 10%
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Bayu-Undan gas condensate fieldLPG: 175 million barrelsCondensate: 229 million barrels LNG: 66 million tonnes
Energy 1.05 billionbarrels of oil equivalent (BOE)
940 million BOE105 million BOE
5-July-2001 proposal
Resources owned90%
Potential resources lost10%
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Bayu-Undan gas condensate fieldLPG: 175 million barrelsCondensate: 229 million barrels
04080
120160
Thousands of BOE per
day
2000 2005 2010 2015 2020 2025 2030
-500
0
500
1,000
1,500
US
$ m
illi
on
s
2000 2005 2010 2015 2020 2025 2030
Capital cost Operating cost Gross product sales revenue
04080
120160
2000 2005 2010 2015 2020 2025 2030
-1,000
-500
0
500
1,000
1,500
2000 2005 2010 2015 2020 2025 2030
Capital cost Operating cost Gross product sales revenue
Production assumptionsLiquids project Offshore LNG prospect?
Gross sales revenueUS$9.5 billion
Gross sales revenueUS$28 billion
Gas (LNG): 66 million tonnes
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Bayu-Undan gas condensate field
Revenue to East Timor
Liquids projectOffshore LNG prospect?
US$3.6 billion* US$11.2 billion*
0
100
200
300
400
500
600
700
US
$m
illi
on
s
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
90% share of FTP 90% share of Profit Oil East Timor corporate tax
0
100
200
300
400
500
600
700
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
First Tranche Petroleum Profit Oil East Timor corporate tax
US$4.1 billion US$12.4 billion
With EEZ With EEZ
* The present (real, de-escalated) values of these future cash flows are US2.8 billion and US$7.7 billion respectively
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Bayu-Undan gas condensate field
Revenue to East Timor
Liquids project
US$3.6 billion
US$4.1 billion
With EEZ
2345678
US$ billions
US$22/barrel US$25/barrel US$30/barrel
Current arrangement Potential EEZ
Impact of base crude oil price
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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Spot Crude oil prices 1973 - 2002
0
20
40
1970 1975 1980 1985 1990 1995 2000 2005
Iranian revolutionGulf war
US
$ p
er b
arre
l
Arab oil embargo
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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SummaryEast Timor’s indicative petroleum resourcesMillions of barrels of oil equivalent
0
500
1000
1500
2000
2500
LaminariaCorallina
B-U liquids &offshore LNG
Sunrise FLNG
Potential additional entitlements through EEZ delimitation
Resource entitlements based on 5 July 2001 proposal
1,310
1,980
All 4 projects
Timor Sea Petroelum Seminar - Dili, East Timor, March 23, 2002
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SummaryEast Timor’s indicative petroleum revenueUS$ billionsAs spent dollars of the day over life of projects
0
10
20
30
40
50
LaminariaCorallina
B-U liquids &offshore LNG
Sunrise FLNG
Potential additional revenue through EEZ delimitation
Revenue based 5 July 2001 proposal
19.1
38.9
All 4 projects