The Timor-Leste government is demanding a stake in Santos' Bayu Undan gas project, threatening to let the production-sharing contracts expire if an agreement isn't reached by August 30th.
Timor-Leste seeks a significant stake (over 10%) in the project without financial compensation. Their objections include the requirement to seek approval from Australia's Foreign Investment Review Board.
The Bayu Undan gas field, located in Timor-Leste waters, is nearing depletion. The 500km pipeline to the Darwin LNG plant lies primarily within Australian jurisdiction. Exports have ceased, with only limited domestic sales in the Northern Territory.
If the contracts expire, Santos and its partners face decommissioning Bayu Undan's infrastructure at a cost exceeding $US1 billion ($1.5 billion). This underscores the urgency for a swift resolution between the two parties.