A regulatory notice over a missed drilling deadline has placed a production sharing contract (PSC) for a gas asset under threat unless SundaGas Banda Unipessoal, a wholly owned subsidiary of the UK-based and AIM-listed Sunda Energy, shows proof that a rig has been booked to undertake the appraisal program next year off the coast of the Democratic Republic of Timor-Leste, Southeast Asia.
Two months after Sunda announced a letter of intent (LOI) with Finder to work together to secure a drilling rig for the pair’s drilling campaigns offshore Timor-Leste, the AIM-quoted company revealed the receipt of a notice from the country’s upstream regulator, Autoridade Nacional do Petróleo (ANP), to terminate the TL-SO-19-16 PSC, which the firm operates in partnership with its government-owned joint venture partner, Timor Gap Chuditch Unipessoal.
This PSC contains the Chuditch gas field , where SundaGas has been preparing to drill the Chuditch-2 appraisal well. The regulatory notice states that the operator is in breach of the PSC because it has failed to fulfil its minimum exploration work requirements for contract year three of the PSC, covering the drilling of Chuditch-2 by June 18, 2026.
As a result, the firm is allowed to submit written representations to ANP concerning the breach within 120 days of the notice, until October 16, 2026, before the regulator makes a final decision on termination at its sole discretion.
The notice also sets out that ANP may consider granting an extension for the fulfilment of the minimum exploration work requirements for contract year three of the PSC, provided SundaGas provides evidence of a binding signed contract for a rig to drill Chuditch-2 in 2027.
Commenting on this, the operator emphasized: “The board of directors of Sunda disputes the basis of, and background to, the notice and the company is consulting with its regulatory and legal advisers with respect to the matters therein.
“SundaGas has also requested an urgent meeting with ANP for clarifications regarding the contents of the notice. The company reserves its rights with respect to these matters.”