The location for drilling the exciting Chuditch-2 appraisal well offshore Timor Leste will be shifted following a site survey. Crucially, Baron Oil and TIMOR GAP are making progress with preparations for drilling this key well, which could eventually lead to new liquefied natural gas (LNG) development options for the country, also known as East Timor.

Detailed investigation of the location initially chosen for the Chuditch-2 well revealed an irregular seabed that would be unsuitable for placement of a jack-up drilling rig. As a result, a new, more appropriate location has been chosen, which lies 286m to the east-northeast of the initial location. This new proposed location was satisfactorily verified through geotechnical studies in the second phase of the site survey and is now considered final, noted Baron Oil in an investor update.

The well will now be situated 5.1km from the site of the original Chuditch-1 discovery well in a water depth of 68m. Based on 3D seismic mapping and the results of Chuditch-1, the planned vertical appraisal well drilled at this new location is expected to encounter gas-charged reservoirs 16m shallower than at the initial location and, as a result, Baron subsidiary SundaGas, which holds the rights to the block, now predicts a taller 149m gas column in the reservoir target versus 133m predicted at the initial location.

Timor Leste national oil company TIMOR GAP said in January that it would boost its stake in the Chuditch PSC in an US$8.5 million deal with Baron Oil.  Significantly, London-listed Baron is preparing to drill the Chuditch-2 appraisal well – expected to cost US$32 million - in a neighborhood that recently attracted Italy's Eni.

In 2022, Italy's Eni was awarded offshore Block P, which is close to the Woodside-operated Greater Sunrise and Baron Oil's Chuditch fields in Timor Leste's maritime area. Eni signed the contract in late 2023, as Energy News Bulletin reported.

Block P is immediately adjacent to the north of Baron's Chuditch Block, on the gas migration route from Chuditch towards the Greater Sunrise field. That fairway remains very interesting. Indeed, a successful explorer like Eni doesn't enter a new block for a small resource, they will be looking for something of size. The fairway has an enormous amount of gas within it, noted Baron Oil previously. The explorer sees Eni's arrival as a validation, reporting it is great to have such a big name as a neighbour.

After using modern techniques to reprocess old seismic data from Shell's 1998 Chuditch gas discovery offshore Timor Leste, the current operator Baron Oil, is expecting a much bigger gas field than previously anticipated, as Energy News Bulletin reported last November following an interview with Baron Oil. 

As a result, the mean contingent resource is now estimated at 1.16 trillion cubic feet (cf) of gas for Chuditch, up from around 700 billion cf, which was previously talked about. By contrast, Woodside's Greater Sunrise field contains an estimated contingent resource of 5.3 trillion cubic feet of dry gas and 226 million barrels of condensate.

Chuditch drilling planning preparations advancing

In parallel to the recent site survey operations, drilling planning has continued at a good pace. SundaGas' experienced in-house drill team has further refined the well design, enabling the process of tendering for essential materials that have long procurement times, such as well casing, to have commenced. Design work on a Chuditch-2 well test (DST) is ongoing, led by SundaGas' well test engineer, said the company.

SundaGas is in discussions with drilling rig contractors and other third-party service providers in support of well construction plans. The company is also liaising closely with other operators in the region that are expected to drill wells in locations relatively nearby.

Detailed workshops are being held on a regular basis with joint venture partner TIMOR GAP and Timor Leste government regulator ANP, whose input to operational and logistical planning is continuing to prove invaluable, said Baron.

SundaGas and its joint venture partner TIMOR GAP are working on resources to successfully deliver the upcoming Chuditch-2 appraisal drilling campaign. Discussions with a number of potential funding partners are ongoing and further announcements will be made at the appropriate time, said the company.

"The successful completion of the site survey, leading to the selection of an improved drilling target location with optimal seabed conditions, is another key milestone towards drilling the Chuditch-2 appraisal well. We look forward to providing further announcements on the Chuditch project, including with respect to well planning, execution and drill funding, at the appropriate times," said Baron Oil CEO Andy Butler. 

Significantly, the exciting opportunity is thought to have attracted interest from LNG investors. Baron Oil is seeking investors to back the relatively low-risk appraisal drilling campaign at the Chuditch gas field offshore East Timor. Possible suitors include Eni, Inpex, Santos, Petronas, and even Chinese national oil companies (NOCs), for the potential LNG project, as ENB reported last November. 

LNG development options

If the appraisal well is successful, Chuditch could start producing by the end of this decade. Significantly, multiple development options are open to Baron Oil for Chuditch and the cluster of features nearby.

These include tiebacks to other emerging infrastructure, such as the planned development of the Woodside Energy-operated Greater Sunrise field. Baron is also looking at standalone developments. In some ways, these are probably the most likely to work out. These standalone options, which include a floating LNG (FLNG) or fixed platform-based LNG facilities, or some hybrid combination of both, are very interesting, given the shallow 60 metre water depth.

Standalone solutions such as FLNG are probably simplest. They take away third-party issues, as well as the need for long pipelines.

The Timorese aspire to develop the Greater Sunrise field, to the north of Chuditch, via a greenfield LNG export facility onshore East Timor. However, there are some complexities around that, in terms of getting the gas to the island of Timor due to the deepwater between the fields and the coastline. There are also challenges developing greenfield LNG projects in a remote location. But this represents just one pathway for Chuditch.

To the south of Chuditch, there is the Darwin LNG (DLNG) terminal in northern Australia and Santos' Barossa field that is currently being developed to backfill DLNG. There are various ways for Chuditch to fit into that picture. It has third-party challenges, but it offers a more definable timeline and a definable set of challenges. Although the complexity is cross-border arrangements.