Italy's Eni is into the closing stages of the first offshore exploration well to be drilled in years in Timor-Leste, and there have been encouraging signs of hydrocarbons.

Sources said completion of the Kanase-1 well is imminent and, even though it is a tight hole, with no information being released, gas was recently flared from the well — which would ordinarily be a positive sign during exploration drilling.

The well was spudded in March using the semi-submersible drilling rig Maersk Deliverer, and had a two-month estimated duration.

The importance of the well is that it is drilling into a deeper Triassic reservoir than the usual Jurassic reservoirs in the immediate vicinity.

If Eni has success in the deeper zone, it could provoke renewed interest in Timor-Leste’s offshore play, a government official said recently.

“If they discover the deeper interval then it will open up a new offshore play, it’s an interval below the Bayu-Undan field and other fields. Everyone is watching this well," said the official.

In addition, there are at least two operators with neighbouring acreage taking a very keen interest in Kanase-1.

Carnarvon Petroleum, the Australian offshore exploration company, owns neighbouring Block WA-523-P, and said recently that the most significant exploration prospects in the permit are located in the Triassic interval “which is relatively untested in this area”.

Carnarvon owns 20% of the recent world-class Dorado oil discovery, which is a Triassic play.

Northern Oil & Gas Australia, the owner of the nearby producing Laminaria-Corallina oilfields, is also evaluating a lower Jurassic and Triassic play it calls Laminaria Deep.

The company said recently that there is “ large upside potential” in the lower reservoir of over 400 million barrels of oil, with “greater clarity" to follow Eni’s Kanase well.

Northern Oil & Gas Australia said Eni believes Kanase is a Triassic oil prospect “with multiple follow-up prospects” and that success would de-risk the Laminaria Deep play.

The Kanase well is located in Block 11-106, which is the relinquished area of the former exploration block that contains Eni’s Kitan oilfield. Kitan was shut down prematurely in December 2015 because of low oil prices.

The Block 11-106 owners are operator Eni on 40.53%, Inpex on 35.47% and the national oil company Timor GAP on 24%.

The licence contains existing oil discoveries including Kuda-Tasi and Jahal, Squilla and Krill.

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