Timor-Leste is considered a highly prospective area for petroleum, both on- and offshore. There are dozens of onshore oil and gas seeps. These oil seeps contain very light oil - actually light enough to be used as motor fuel directly. This is indicative of deeper lying oil pools, derived from a petroleum system very similar to those found in the Timor Sea today. All the exploration activity onshore took place before 1975, and is only being reactivated now. The region remains relatively under-explored, which is why the new government has given priority to developing a legal regime to underpin development.
Many of the known oil-bearing rock formations (sandstones) in the prospective part of the Timor Sea/Timor Gap are very similar to what is found in the North Sea. There are also indications of potentially large hydrocarbon resources in limestone reservoirs, similar to what is seen in the Middle East.
In late 2004 the Timor-Leste Government issued its first license for the acquisition of seismic data in offshore areas south of Timor-Leste. This area is defined by the southern coastline and the northern edge of the JPDA.
A number of competitive bids were received, and the first license was awarded to a joint venture between BGP (owned by PetroChina) and GGS (Geo Global Services, a Norwegian-based company). The survey commenced on 31 December 2004 and was completed in less than two months. It involved the shooting of 6,500 lines of data over an area of 30,000 square km.
The acquisition of data is part of a plan to invite tenders for Timor-Leste's first exploration license round in mid-2005, with licenses expected to be issued by the end of the year.
Timor-Leste is now in a position to hold a bid round for selected prospective onshore areas. Onshore areas already have proven petroleum systems and as such are low geological risk. Production could commence within months of license awards.