Santos has concluded negotiations with TIMOR GAP for the latter's entry into the Bayu-Undan joint venture.
The two parties have agreed on a sale and purchase deed that will transfer a 16% interest in the Bayu-Undan Upstream Project to TIMOR GAP, effective from July 1.
The execution of the SPD is expected to take place by mid-September.
Additionally, the production sharing contract for the Bayu-Undan Project has been extended for the seventh time, now set to expire on June 30, 2026.
The Bayu-Undan Project, which includes an offshore petroleum field and associated production and processing facilities, is located in Timor-Leste's waters, approximately 500km northwest of Darwin.
Since its inception in 2004, the project has exceeded expectations, significantly contributing to Timor-Leste's economy, generating over $25 billion in revenue to date.
Prior to TIMOR GAP's entry, the joint venture included Santos, SK E&S, INPEX, Eni, and Tokyo Timor Sea Resources.
Upon completion of the transaction, the working interests within the BUJV will be adjusted accordingly.
The project currently supports around 350 onshore and offshore jobs in Timor-Leste, with more than half of the offshore workforce being Timorese.
Notably, 100% of Santos' workforce in Timor-Leste consists of local hires. The Bayu-Undan field continues to supply gas to the Australian domestic market through a gas sales agreement with the Power and Water Corporation of the Northern Territory, along with producing valuable liquids.
Santos' Managing Director and CEO, Kevin Gallagher, expressed enthusiasm for the partnership, stating, "I have long wanted to see TIMOR GAP as a partner of Santos, and I welcome them as a participant in the Bayu-Undan joint venture."
Looking ahead, Santos remains committed to collaborating with Timor-Leste and the joint venture partners to transform Bayu-Undan into a large-scale, commercial carbon capture and storage project after petroleum production ends.
The initiative is expected to create new revenue streams, local jobs, and business opportunities for Timor-Leste by offering carbon management services to the Asian region.
At the time of reporting, Santos' share price was $7.26.