5.000
%
Positive
67
mm boe
0
%
Timor-Leste's growth has been closely tied to the O&G sector, but Bayu-Undan has ceased production and the petroleum fund is being drawn down rapidly. ASEAN membership is a positive, but the dispute with Woodside over where Greater Sunrise gas will be processed remains unresolved. Outlook amended from Positive because the end of production and the Greater Sunrise impasse have removed the near-term upside. Outlook: Neutral. Risk premia unchanged at 5%.
October 7, 2026
Asia - Pacific
mm bbl
bcf
Southeastern Asia, the eastern half of the island of Timor in the Lesser Sunda Islands, at the eastern end of the Indonesian archipelago, northwest of Australia.
PSC/PSA
The latest model Production Sharing Contract ("PSC") was introduced in 2005, and is relatively straight-forward. The State has the right to take an equity interest of up to 20% in any commercial discovery. The royalty rate, cost recovery ceiling and profit oil splits are all fixed; there is an additional profits tax (called Supplemental Profits Tax) levied at 22.5% on net receipts after a project achieves a 16.5% rate of return post-corporation tax. There is also a domestic market obligation whereby a contractor must sell up to 25% of its profit oil to the domestic market at a price equivalent to the FOB price at the field export point.
Timor-Leste joined ASEAN in October 2025, but its economy depends on a petroleum fund being drawn down rapidly after Bayu-Undan ceased production. US and UK guidance cite a small market, weak capacity and land-title uncertainty. The EIA notes that the future of the Greater Sunrise gas field depends on resolving whether gas is processed in Timor-Leste or Australia, a dispute with Woodside that has persisted for years.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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