Santos agrees to divest its part stake in Timor Leste project
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The news: A joint venture led by oil and gas producer Santos has agreed to divest a part stake in the Bayu Undan upstream project in favour of Timor Leste’s state energy company.
The numbers: Under the agreement, the Bayu Undan JV — comprising oil and gas majors Santos, SK E&S, Inpex, ENI, and Tokyo Timor Sea Resources — will divest a 16% stake in favour of Timor GAP.
As a result, Santos, which is the operator for the project, will bring down its stake to 36.5% from 43.4%.
Santos shares were down 0.3% to $7.20 in early trading on the ASX.
The context: Santos said the new deal will come into effect by mid-September. The Bayu Undan upstream project comprises the offshore petroleum field, as well as offshore production and processing facilities in Timor Leste.
The project supplies gas to the Darwin LNG plant through a 500km pipeline. Santos said a production sharing contract extension up to 30 June, 2027, has also been confirmed.
The deal comes after long drawn negotiations, with the Timor Leste government warning Santos it could lose control of the project if it did not agree to part with a share.
The source: ASX announcement
