SINOPEC Oil and Gas Australia has surrendered its exploration permit AC/P22 – one of two that make up the Puffin Oilfield in the Southern Timor Sea, off the coast of north west Western Australia.
Grant Thornton, the administrators of Puffin Oilfield joint venture partner AED Oil, said in an announcement to the Australian Securities Exchange that Sinopec had completed an extensive evaluation of the permit area.
“(Sinopec has) recommended to AED Oil and its administrators that in the absence of identifiable robust exploration targets likely to produce economic outcomes, that AC/P22 be surrendered,” the statement said.
“The key work commitment that will not be undertaken as a result of this relinquishment is the drilling of a well, which would need to have been drilled prior to the end of the license term, 8 May 2015.”
The decision will also be bad news for Norwest Energy, which held a 1.25% overriding royalty interest in the permit and any production derived from the AC/P22 permit, located in the Territory of Ashmore and Cartier Islands Offshore Petroleum Joint Authority area.
Discussions with regulators concerning the future of Puffin oilfield production permit AC/L 6 are ongoing with talks concerning both the ongoing status of the permit and a future work program.
Oil production from the Puffin Oilfield ceased in May 2009 and as such a review of the status of the license is required within 5 years of this event.
The surrender of the AC/P22 permit area will take effect on the day which a notice of the surrender is published in the Australian Government Gazette.