ANP approves Kitan development plan

The Kitan oil field, in the Joint Petroleum Development Area, is the first new oil find since Timor-Leste restored its independence in 2002. In June 2006, the Timor Sea Designated Authority signed production-sharing contract JPDA 06-105 with Woodside (40%), Inpex (35%) and Talisman (25%). Woodside sold their share to the Italian company Eni in September 2007, and Eni took over operation of the project. Test wells found oil in March 2008, and Eni submitted a development plan to the Timor-Leste National Petroleum Authority (ANP) in 2009, which was approved on 22 April 2010.

Earlier this week, La'o Hamutuk made a submission on the Kitan Environmental Impact Statement. We were not able to analyze the 200-page plan in detail, but highlighted poor access to information, flaring associated gas, and the underestimates of the probability and consequences of a serious spill.

Although the National Directorate on Environment had told La'o Hamutuk we could make our submission up to 22 April, apparently the ANP decided not to wait for the public consultation before approving Eni's Field Development Plan.

La'o Hamutuk has created a web page with information on the Kitan project, including revenue estimates, production-sharing contracts, history, press releases and other documents.

The press release below was issued yesterday by the National Petroleum Authority; Eni also issued a release.

National Petroleum Authority, Timor-Leste
MEDIA RELEASE
Thursday, 22nd April 2010

KITAN FIELD DEVELOPMENT APPROVED
A new development within the Joint Petroleum Development Area

Field Name : Kitan
Location : Joint Petroleum Development Area (JPDA) – Timor Sea
PSC : JPDA 06-105
PSC Operator :Eni JPDA 06-105 (40%)
PSC Partners : INPEX (35%), Talisman (25%)
Status : Development plan approved

The Autoridade Nacional do Petróleo (ANP) announces to the public that after its assessment and subsequent to discussions, clarifications and additional documentation provided, and with consent from the Joint Commission representing the Government of Timor Leste and Australia, the Kitan Field Development Plan (FDP) has been approved on this day, the 22nd of April 2010.

On the 11th of April 2008 the operator, Eni JPDA 06-105, declared Kitan field as a commercial discovery and ANP then declared the Kitan development area, on 18th May 2008. In accordance with the PSC requirement for JPDA 06-105 the operator submitted the Kitan FDP one year after the declaration of the development area.

Kitan field is located at a water depth of 305m to 335m, North West of the existing Gas Condensate field, Bayu Undan. The field has an oil density of 590 API and the reservoir is at depth of 3,300 metres subsea. Using the Mid Case scenario (Most Likely Scenario), the Kitan field contains 68.8MM Stock Tank Barrels of Oil Initially In Place (STTOIP), with a calculated recovery factor of 50%, which indicates that the ultimate recovery from the field may be up to 34.6MMstb.

The hydrocarbons in the field are to be produced, processed and stored using a standalone Floating Production and Storage Offloading vessel (FPSO). Three subsea production wells will produce hydrocarbons; Kitan-3, Kitan-4 and Kitan 2-ST1 (an existing appraisal well which will be re-entered and side-tracked) and these production wells will be tied back to the FPSO. Three horizontal subsea ‘Christmas trees’ will be used to control the production of the three wells. Topside elements of the control system will provide hydraulic pressure, electrical power and control signals to subsea control modules installed on the ‘Christmas trees’.

Health Safety and Environmental requirements set forth under the existing regulations and guidelines have been addressed and accepted.

Approximate Kitan total project cost is about USD 1 billion.

With due regard to OHSE requirements, Kitan field opens a new opportunity for employment and training for nationals or permanent residents of Timor Leste.

Eni JPDA 06-105 continues to engage in exploring the prospectivity of the block by firming up the understanding of already identified prospects. Two further exploration wells will be drilled in PSC JPDA 06-105 within 2010.

For further enquiries on the content of this media release, please contact Mr. José Gonçalves, Director for Joint Petroleum Development Area (JPDA) at jose.goncalves@anp-tl.org telephone number +670 3324098.