Oilex (ASX:OEX, LON:OEX) has confirmed it intends to terminate contracts for an exploration project in the Timor sea.
The AIM junior is the operator of the project, which strategically is considered non-core, and it has a 10% stake in the joint venture alongside five other companies.
The termination was described as being mutual, and it comes amid concerns over the security of the production sharing contract’s (PSC) tenure, which are outside the control of the companies; issues such as formal arbitration between the government of Australia and the Timor Leste government.
Oilex said the PSC is currently suspended until July 15, but it remains in good standing.
Timor-Leste’s Autoridade Nacional do Petróleo (ANP) – the National Petroleum Authority – has rejected the company’s request to terminate though it advised its intention to terminate under the terms of the PSC.
No such notice has yet been received, though Oilex said the joint venture partners will consider ANP’s response and ascertain the most appropriate way forward.
