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Table of Contents:
Part I : Executive Summary

1.1
Background
1.2
Scope of Study
1.3
Framework of the Study
1.4
Initial Observations and Management Guidance
1.5
Technical Team Study Results
1.6
Commercial Team Study Results
1.7
Conclusions
Acknowledgements
I-2
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I-7
I-9
I-10
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I-21
Part II : Technical Study

2.1
2.2
2.3
2.4
2.5
2.6
2.7
Introduction
Observations at Site
Sea and Seabed conditions
Master Plan in Phases
2.4.1. Design Principles
2.4.2. Supply Base Layout
2.4.3 EPC Phase 1 Schedule (Summary)
List of Facilities
2.5.1 Phase 1 Suai Supply Base for Oil and Gas Industry
2.5.1.1 Land Facilities
2.5.1.2 Marine Facilities
2.5.2 Phase 2 Suai Supply Base for Energy and
Resources Industry
2.5.3 Phase 3 Suai Supply Base for Energy, Resources
and General Cargo
EPC Capex Cost
Maintenance Cost Estimate
2.7.1 Maintenance of Infrastructure
2.7.2 Maintenance of Operating Assets
Suai Supply Base Feasibility Study and Front End

Engineering Design (FEED) Table of Contents
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2.8
Utilities in the Suai Area

2.8.1 Electricity
2.8.2 Water Supply
2.8.3 Telecommunications
II-33
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II-34
II-34
Part III : Commercial Study

3.1
3.2
Introduction
User Survey and Infrastructure Review
3.2.1 User Survey (Oil and Gas)
3.2.1.1 Approach to Interview Sessions
3.2.1.2 Current Activity (from user surveys)
3.2.1.3 Forecast of O&G Programs from User Survey
3.2.1.4 Feedback from PSCs
3.2.1.5 Service Companies
3.2.2 Survey for Potential Non Oil and Gas Cargo
3.2.2.1 Movement of goods and supplies
3.2.2.2 Liquid Cargo
3.2.2.3 Local Industries
3.2.2.4 Southern Petrochemical Corridor
(Suai-Betano-Beaco)
3.2.2.5 Increased Industrial Activity and
Manufacturing
3.2.3 Facilities / Services required
3.2.3.1 Role of Supply Base
3.2.3.2 Facilities and Services
3.2.3.3 Port Configuration and Capacity
3.2.4 Recommendation of Infrastructure Improvements
3.2.4.1 Observations
3.2.4.1.1 Road Network
3.2.4.1.2 Airfield
3.2.4.1.3 General Commercial Port
3.2.4.1.4 Industrial Estate
3.2.4.1.5 Medical Facilities
3.2.4.1.6 Electricity / Power and Utilities
3.2.4.1.7 Telecommunications Voice / Date
3.2.4.1.8 Bulk Fuel Storage

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TOC - 2
3.3.
3.4
3.5
3.2.4.2 Recommendations from Infrastructure

Survey
3.2.4.2.1 Road Network
3.2.4.2.2 Airfield
3.2.4.2.3 Helipad
3.2.4.2.4 General Commercial Port
3.2.4.2.5 Industrial Estate
3.2.4.2.6 Intermodal Connectivity
3.2.4.2.7 Medical Facilities
3.2.4.2.8 Utilities
3.2.4.2.9 Telecommunication
3.2.4.2.10 Bulk Fuel Storage
3.2.5 Conclusions from User Survey and
Infrastructure Review
General Taxation Regime
3.3.1 During EPC Construction
3.3.2 During Operations
3.3.3 Industrial Estate (Zone C)
Labour Report for Suai Supply Base
3.4.1 Introduction
3.4.2 Organisation Chart
3.4.3 Labour Report
3.4.4 Skills Development Plan
3.4.4.1 Survey in Timor-Leste
3.4.4.2 Government Programs
3.4.4.3 Suai Supply Base Needs
3.4.4.4 Strategy for Human Capital Development
Financial Report for Suai Supply Base
3.5.1 Introduction
3.5.2 Capital Expenditure
3.5.3 Operating Expenditure
3.5.4 Government Support
3.5.5 Revenue Assumptions
3.5.6 The Revenue Model (Offshore Oil and Gas Activities)
3.5.7 Profit and Loss (Offshore Oil and Gas revenue)

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TOC - 3
3.5.8
3.5.9
3.5.10
3.5.11
3.5.12
3.5.13
Profit and Loss (All Oil and Gas revenue,

Offshore + Onshore)
Profit and Loss (Additional Revenue Sources)
Net Present Value and Internal Rate of Return
Industrial Estate Land Value
Conclusion for Financial Analysis of the SSB Project
Recommendations
III-68
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III-84
III-85
Part IV : Social Impact Study

4.1
4.2
4.3
4.4
4.5
Background
Main Activities
Social Programs
4.3.1 Create a Community Office (in Suai)
4.3.2 Establish a regular Liner Service
4.3.3 Fuel Supply
4.3.4 Create a Timor-Leste East Java Business Forum
4.3.5 Encourage a Suai Darwin Line
Socioeconomic Impact
4.4.1 Population, Skills Development and Employment
4.4.1.1 Employment Summary
4.4.1.2 Human Capital Development
4.4.2 Economic Contribution
4.4.2.1 Direct Expenditure
4.4.2.2 Value Creation
4.4.3 Business Opportunities
4.4.3.1 Construction Industry
4.4.3.2 Hospitality and Food & Beverage,
General Trading and Supplies
4.4.3.3 Foreign Investment
4.4.4 Social Conditions
4.4.4.1 During Construction
4.4.4.2 During Operations
4.4.4.3 Transmigration of workers
4.4.5 Environment
Recommendations

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Part V : Appendices
A.
B.
C.
General
1)
Study Team Organisation Chart
2)
Interim Reports and Memos
a.
Timor-Leste Kickoff Presentation (15 September 2010)
b.
Memo 1 Recommendation to include alternative site
into study
c.
Memo 2 Role of Service Companies (21 October 2010)
d.
Memo 3 Recommend postponement of introduction
event
e.
Interim Report Presentation to SERN 9 February 2011
3)
List of Source Documents from SERN
Technical
1)
Technical Site Survey Report
2)
Breakwater Design Study (ITS)
3)
FEED Drawings (In Separate Book)
4)
EPC Schedule Phase 1
Commercial
1)
Report on Shorebase Orientation Course
2)
List of Typical Facilities and Services (Powerpoint Slides)
3)
From Seismic to Well Shutdown (Powerpoint Slides)
4)
Report on Darwin Marine Supply Base

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List of Figures
Figure I 1 : Study Methodology
I-6
Figure I 2 : Photos at Lamongan Shorebase orientation and training program I-10
Figure I 3 : Photos during the Shore Base Orientation Course at Lamongan
Shorebase
I-22
Figure II 1 : Suai Supply Base Site
II-3
Figure II 2 : Photos of Suai Supply Base Site Vegetation and Site Condition II-4
Figure II 3 : Riverbed at river Karau-ulun
II-5
Figure II 4 : Chart of historical cyclone tracks
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Figure II 5 : Suai Supply Base Land Allocation
II-8
Figure II 6 : Layout for Main Office block and Main Post Block
II-9
Figure II 7 : Suai Supply Base Master Plan Layout Phase 1
II-10
Figure II 8 : Suai Supply Base Master Plan Layout Phase 1 and Phase 2
II-11
Figure II 9 : Suai Supply Base Master Plan Layout Phase 1, Phase 2 and
Phase 3
II-12
Figure III - 1 : TLEA and JPDA Acreage
III-5
Figure III - 2 : Suai Supply Base Site Allocation
III-12
Figure III - 3 : Multipurpose Jetty Configuration
III-18
Figure III - 4 : Photos of Road Condition with potholes (Dili to Suai)
III-20
Figure III - 5 : Photos of road water damage(Dili to Suai)
III-21
Figure III - 6 : Photos of abandoned Suai Airport (cattle and children in
background)
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Figure III - 7 : Photos of abandoned Suai Airport (nearby buildings) and
Helipad
III-23
Figure III - 8 : Clinics in Suai area
III-24
Figure III - 9 : Suai Hospital and facilities
III-25
Figure III - 10 : Fuel Tanker and fuel stop enroute to Suai
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Figure III - 11 : Suai Supply Base Organisation Structure
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Figure III 12 : Suai Supply Base Operations Team
III-41
Figure III 13 : Suai Supply Base Support Teams
III-41
Figure III 14 : Suai Supply Base Business Support Services Team
III-42
Figure III 15 : Suai Supply Base Sales, Finance and Admin teams
III-43
Figure III - 16 : Photos of Vocational Training Institute
III-54
Figure III 17 : Suai Supply Base Land Allocation
III-83
Figure IV 1 : Suai Supply Base Site Allocation
IV-14

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List of Tables and Charts

Table I 1 : Summary of Estimated EPC Cost
I-10
Table I 2 : Summary of NPV and IRR results for the different scenarios
I-14
Table I 3 : EBITDA Forecast 2013 to 2022 (US$)
I-16
Table II 1 : EPC Phase 1 Schedule (Summary)
II-13
Table II 3 : EPC Cost Estimate (International Domestic Cost)
II-28
Table II 4 : EPC Cost Estimate (Domestic Cost)
II-29
Table III 1 : Summary of Current Activity from User Surveys
III-5
Table III 2 : Breakdown of Suai Supply Base employees by Department and
Grade Level
III-44
Table III 3 : Infrastructure Capex International / Domestic Pricing
III-58
Table III - 4 : Infrastructure Capex - Domestic Only
III-59
Table III - 5 : Operating Assets Capex
III-60
Table III - 6 : Operating Expenses
III-61
Table III 7 : Revenue Estimates for MiniShorebase
III-64
Table III 8 : Revenue Estimates for Production Boat Calls
III-64
Table III 9 : Revenue Estimates for Drilling Boat Calls
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Table III 10 : Revenue from oil and gas activities in Kitan, Bayu Udan and
Sunrise
III-65
Table III 11 : Revenue from oil and gas offshore activities
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Table III 12 : Revenue Estimates for Onshore Drilling Boat Calls
III-68
Table III 13 : Revenue Estimates for Onshore Production Boat Calls
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Table III 14 : Revenue Estimates for Onshore PSC Minishorebase
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Table III 15 : Summary of revenue from oil and gas activities (offshore
and onshore)
III-69
Table III 16 : Revenue from liquid storage activities
III-70
Table III 17 : Revenue Estimates for Commercial Dry Bulk Customer
III-71
Table III 18 : Summary of revenue from oil and gas + liquid storage activities III-72
Table III 19 : Summary of revenue from all available cargo Supply Base Plus III-72
Table III 20 : Revenue Forecast from all available cargo Supply Base Plus III-73
Table III 21 : EBITDA Forecast (2013 to 2022)
III-74
Table III 22 : Summary of NPV and IRR for the different scenarios
III-84
Chart IV - 1 : Direct Employment Opportunities for Timor-Leste Nationals
IV-11
Chart IV - 2 : Project Capital Expenditure in Timor-Leste during Construction IV-13

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Part I
Executive Summary

Engineering Design (FEED) Executive Summary
I-1
EXECUTIVE SUMMARY
This report has been prepared pursuant to a Memorandum of Understanding dated
12 August 2010 between the Government of the Democratic Republic of Timor-Leste
and Eastlog Holding Pte Ltd, and a subsequent Agreement between the same parties
dated the 17 December 2010. Pursuant to these documents a joint study team
consisting of representatives of Eastlog and SERN was constituted.
1.1.
Background
The Government of Timor-Leste intends to build and operate a logistics supply base
to support all offshore oil and gas activities in the Timor-Leste Exclusive Area (TLEA)
and Joint Petroleum Development Area (JPDA). To this end, they have designated an
area south of Suai city for this purpose (919'S, 12515'E).
The Northern Territories Government in Australia has similarly initiated the process
to build and operate a new Marine Supply Base to supplement their general
commercial port which currently substantially supports all offshore oil and gas
activity in Australian Sovereign waters, the JPDA and TLEA. The new Darwin MSB is
scheduled to come online in mid 2014. There is therefore a high level of urgency
required in this Suai Supply Base in order to be operational before the Darwin MSB
as it would be difficult if not impossible to move PSCs if they have already setup their
operations at the new Darwin MSB.
A supply base built on Timor-Leste shores to support the oil and gas industry will
generate much value both to the oil and gas activities in Timor-Leste as well as its
supporting industries. This can be seen in the following areas:
- Establish an oil and gas industry in Timor-Leste itself and build the
necessary skillsets to sustain these activities in the long term. This will
allow the PSCs to use Timor-Leste as a base for all future oil and gas
activities in the TLEA and JPDA.
- Stimulate the use of Timor-Leste as a base for pipeline operations for
projects such as Greater Sunrise (in the future) and Kitan (scheduled
production in 2011)

I-2
- Creation of jobs and business opportunities during the construction,

operation and maintenance of the supply base. These can be both direct
(i.e. construction, fabrication, inspection services, equipment maintenance,
catering, security, etc) or indirect (i.e. hotels, entertainment,
transportation, supply of sundry goods and services, etc)
- Support and accelerate the infrastructure projects (i.e. power, road,
telecommunications, waste management, utilities, airport, medical
services, etc)
- As a catalyst for the development of the Southern region. The supply base
will provide a springboard for the growth of general industry around the
Suai area that will form the future Small and Medium Enterprises (SMEs)
of Timor-Leste.
As it now stands, Suai is yet to be developed and has very limited infrastructure
support and hence is a challenge to develop. The Government of Timor-Leste,
working with the industry players, would like to put in place a strategic action plan to
achieve this development. As a key component to this, the Government of TimorLeste entered into this agreement with EastLog Holding Pte Ltd to carry out a
technical and commercial feasibility study on the Suai Supply Base. This study has
been prepared with the intention to identify practical and commercially viable
solutions to building a supply base at Suai. It draws on the extensive experience of
Eastlog Holding Pte Ltd as a supply base owner and operator and applies this
experience in real world pragmatic scenarios in an effort to provide the Government
of Timor-Leste with a realistic and practical roadmap.
1.2.
Scope of the Study
At the onset of the project, the joint study team agreed on the following objectives
during the kick-off meeting:
- Determine the scope of facilities and services to be developed
- Recommend a masterplan layout
- Provide a framework for EPC award, including estimate construction
schedule
- Determine Commercial Feasibility

I-3
- Provide Recommendations to create a Skills Development Program

- Identify a list of infrastructure improvements that are necessary to support
the Suai Supply Base project
- Feedback to the Government of Timor-Leste any concerns that logistics
decision makers have
- Indentify any threats or obstacles to the success of the project
To achieve the objectives above, two sub-teams were established, namely the
Technical Team and the Commercial Team.
The structure of the study and the team members can be found in appendix A1.
Scope of Technical Team
- Conduct a full site survey of the site designated by the Government of
Timor-Leste to determine its suitability for development of a multi-user
integrated supply base.
- Recommend the most optimal design of the berths
- Develop a site layout for the development of the Suai Supply Base in 2
phases, with Phase 1 being the development of the berths, yards,
warehouse facilities, offices and support buildings, accommodation and
recreation buildings and all other support structures.
- Identify and assess the availability of local construction material and
equipment
- Identify and assess the availability of local construction contractors and
labour
- Develop the budget for the EPC for the construction of the Suai Supply
Base
- Provide an estimate of annual maintenance costs
- Develop the EPC design documents for phase 1

I-4
Scope of Commercial Team

- Identify potential users of Suai Supply Base and assess their needs over a
10 year period
- Identify the facilities and services required by the users and the dates of
intended use such that if required, the base can be built in 2 phases
- Recommend a selling price for each item of service for the purpose of our
own forecasting as well as for the Government of Timor-Leste to negotiate
and agree with the users on a commitment for domestic expenditure
- Provide a manning chart - to include a report on availability of local hires
and to identify and propose a skills development programme
- Provide an estimate of operating expenses for the purpose of financial
modeling
- Identify the source of funding and cost of funding
- Identify and recommend fiscal issues ranging from handling of bonded or
duty free exemptions for project equipment and for PSCs during
operations
- Identify and recommend suitable tax and fiscal exemptions to improve
returns
- Identify and recommend required improvements to infrastructure (e.g.
airport, hotel, roads, etc)
- Monitor and report on progress of Darwin Supply Base
1.3.
Framework of the Study
The Team was given a period of six months to conduct the study and to report its
findings. Material used to guide the team include technical material in the
possession of Secreataria de Estado dos Recursos Naturais (SERN), survey data
gathered over a 3 week site visit, interviews with Autoridade Nacional do Petroleo
(ANP), oil companies and service companies, as well as with local vendors and
contractors. Various consultants were appointed by Eastlog, including PMC Oilfield
Services Pte Ltd, Cybermax Pte Ltd and Institut Teknologi Sepuluh Nopember,
Indonesia (ITS).

I-5
Throughout the duration of the study, the State Secretary of Natural Resources, His
Excellency Alfredo Pires, provided guidance to the team and we gratefully
acknowledge this guidance.
The team utilised a systematic information tracking system to give accountability to
source of information developed, and created a web based project management tool
to guide the team. (http://www.suaisupplybase.com/)
The following methodology was used to ensure the team stayed on track with
proper management guidance.
Figure I 1 : Study Methodology

I-6
1.4.
Initial Observations and Management Guidance
At the start of the Study, several key factors became apparent:

1. The site is exposed to the open sea and faces waves of 1m to 3.5m. It will
require a breakwater to give users of the port facilities assurance that the
berths can operate 365/24.
2. Any marine construction on the site must be done within a window of 9
months (July to March) or face damage when the season changes
3. The site is completely green field and does not have any significant source of
construction material or equipment, all of which must come by sea and be
landed by a newly constructed LCT ramp.
4. There has not been any large scale civil or infrastructure development in
Timor-Leste since its independence and there is a lack of large scale local
contractors able to undertake this development.
5. The survey of rates available was based on rates offered for contracts in and
around Dili. There were no significant quotes from Suai.
6. All quotes from Dili when compared with quotes from Surabaya were
significantly higher. Material prices came in on the average 1.5 times higher
and equipment rental at least 2 times higher. This is probably due to the high
logistic cost, as well as the low utilization of available equipment in Dili. In
addition, the margins have the element of risk factored into them.
7. All previous and current oil and gas supply base activities are supported by
Darwin (with the exception of a single exploration well drilled recently by
Reliance Industries Limited)
8. There is however a high degree of commitment by the oil companies and
confidence that, if built and managed to International oilfield standards, with
complete integrated facilities available, both existing production fields
(namely Bayu Udan and Kitan) will use the Suai Supply Base.
9. To meet the requirement of these two production customers and also the
potential future business to be generated by the development of Sunrise and
to facilitate easy exploration of the open acreage, complete integrated
facilities will have to be built in Phase 1 and only capacity expansion such as
additional jetties, additional warehouses, etc will be built in Phase 2 as and
when required.

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10. Darwin is in the process of developing a dedicated multi-user integrated

supply base, which will be operational by mid 2014. This facility aims to
support all offshore activity in the JPDA as well as Timor-Leste Exclusive Area
(TLEA).
These factors all indicate the development of the project:a. will be costly,
b. will contain a high degree of risk.
c. must be started and completed such as to operate before the new Darwin
facility is completed.
During the course of the site and user surveys, Eastlog prepared the following
interim memos, a copy of which can be found in the appendices:1.
Memo on Alternative Site (appendix A2b)
2.
Memo on Role of Service Companies (appendix A2c)
In light of these factors, Eastlog CEO then directed the team to carry out the
following:
1. Technical Team
a. Develop a masterplan within the breakwater basin to encompass all possible
port activities for the next 50 years.
b. Propose a multi purpose jetty for the first phase, able to accommodate the
oil and gas industry and be used for other general port activities.
c. Notwithstanding the lack of local large scale contractors, to develop two EPC
costs and time estimates, namely:i.
Based on quotes from Timor-Leste contractors (Domestic

Price, and Domestic Schedule)
ii.
Based on appointing a non-Timor-Leste Main Contractor

experienced in oil and gas construction standards, using a
number of Indonesian sub-contractors with direction to utilize

I-8
suitable Timor-Leste contractors (International-Domestic

Price, and International-Domestic Schedule).
2. Commercial Team
a. Using the same multi-purpose jetty developed for the oil and gas industry,
and with no additional capital expenditure:i. Consider business prospects from Indonesian fields, namely Inpex
Masela and ENI West Timor
ii. Identify for the Government of Timor-Leste other potential port
activities that could be developed in the near term
iii. Model the commercial viability based on these additional activities
1.5.
Technical Team Study Results
The technical team conducted 2 site visits and technical site surveys during the
course of the project. A full report can be found in the appendix B1.
From the Eastlog CEO directions, the technical team reported as follows:
1.
Recommended a 150m x 50m berth configuration, with 2 LCT ramps and

a barge berth as being able to accommodate all identified oil and gas
activities as well as provide support for non oil and gas activity, and
building of liquid storage tanks to support oil and gas as well as general
commercial purposes.
2.
Reported that Domestic Price estimate is US$346,962,500 and Domestic

Schedule is three years with low confidence of being on time and budget.
3.
Reported that International-Domestic Price estimate is US$273,162,500

and International-Domestic Schedule is 18 months to first operation
provided commencement is June 2011, and US$318,000,000 and 30
months if commencement is later than June 2011.

I-9
Domestic
Price
International
Domestic Price
International
Domestic Price
Note:
Commencement Completion
June 2011
June 2014
EPC
US$346,962,500
June 2011
US$273,162,500
December
2012
September 2011 December
2013
US$318,000,000
1) Price does not include any taxes or duties.

2) Price is for Master Plan Phase 1 only
Table I 1 : Summary of Estimated EPC Cost

Based on these results, the technical team has recommended awarding the
EPC contract to an international EPC contractor with large scale project
experience to commence by June 2011 in order to be operational by
December 2012.
1.6.
Commercial Team Study Results
As a platform to promote awareness of the project as well as provide a deeper

understanding of logistics supply base operations to the key stakeholders, Eastlog
sponsored a ShoreBase orientation and training program that was conducted at
Lamongan ShoreBase. The report for this session as well as the key presentation
materials prepared by PMC Oilfield Pte Ltd can be found in appendices C1 and C3.
Figure I 2 : Photos at Lamongan Shorebase orientation and training program

In addition to the orientation program, Eastlog together with Cybermax Pte Ltd
initiated a marketing program for the Suai Supply Base. A logo was selected for the
Suai Supply Base, a website was setup and finally marketing collaterals have been
created.

I - 10
The commercial team made 3 visits to Dili and Suai. During the course of these visit,
they conducted surveys with ANP, the PSC holders, service companies and other
vendors. They also did a survey of infrastructure conditions and economic activity in
and around the Suai area.
The commercial team also did a social impact study, to have a better understanding
of the socioeconomic consequences of building the Suai Supply Base. This study
should form one of the key components to planning and decision making for policy
makers and agency planners in the Government of Timor-Leste with respect to the
Suai Supply Base project. A full report can be found in the Part IV of this report.
From Eastlog CEO directions, the commercial team reported as follows:
1.
Considered the following potential additional activities:a. onshore oil and gas development;
b. import of clean petroleum products ( diesel, gasolene, and aviation
gas);
c. dry bulk cargo-both import and export ( eg import of cement, export
of mineral ore);
d. general palletised or break bulk cargo;
e. container cargo;
f. heavy lifts, and tracked vehicles;
g. lifestock;
h. fishery activities.
Inpex Masela in Indonesian waters requires a supply base to support the
proposed floating LNG development. At the present time, ENI (the operator
of Kitan field) is conducting seismic activities in West Timor, and has a
commitment to the Government of Indonesia to drill 1 exploration well. The
executive agency in Indonesia to manage and control the Production Sharing
Contracts for upstream oil and gas industry is BPMIGAS. The Eastlog CEO
approached BPMIGAS in an effort to explore the possibility of these 2
activities using Suai as its supply base. The response from BPMIGAS was that
this was against the Government of Indonesias policy.

I - 11
In developing these potential additional activities, the team did survey visits
in the Suai district and found that there was potential demand for trade and
direct importation of goods between Surabaya and the Suai / southern region
provided there is a regular liner service vessel sailing between these two
districts to facilitate trade
As a result, the commercial team recommended:
i.
During construction, whilst operating a regular LCT service, allowing

up to 10% of the LCT capacity per trip to be utilized for non
construction cargo in order to promote trade.
ii. During operation, continue to run a liner service LCT from Lamongan
to Suai to facilitate what the team anticipates to be growing trade.
The Commercial team highlighted that anticipated cargo will be initially one
way, that is, the importation of goods into the Suai area. It will take some
time to develop export cargo from the Southern region. It is important to
commence development of an industrial estate adjacent to the Suai Supply
Base early to stimulate economic growth and two way commercial cargo and
take advantage of the benefits of the port facilities.
2.
Prepared four revenue assumptions over a 10 year period, on the basis of a

gradual growth of the non oil and gas port activities using only the Phase 1
multi purpose berths. These revenue assumptions are as follows:
a.
Offshore oil and gas;
b.
Offshore oil and gas and onshore oil and gas activities;
c.
Offshore oil and gas, onshore oil and gas, and liquid storage terminal;
d.
Offshore oil and gas, onshore oil and gas, liquid storage terminal and
general port cargo.

I - 12
3.
4.
The Commercial team highlighted that it is very much within the ability of the
Government of Timor-Leste to generate port activities for the Project by
carrying out the following:a.
Conclude negotiations on the development of Sunrise as

development activities will commence after 2012.
b.
Release new acreage by Q4 of 2011 with sufficient attractive terms,

coupled with a requirement for the participants to use the Suai
Supply Base.
c.
Promote on shore oil and gas exploration such that activities

commence by January 2013.
d.
Promote industrial development in and around Suai area. Build an

industrial estate adjacent to the Suai Supply Base.
e.
Promote the mining sector.
f.
Implement the recommended infrastructure improvements from

this report by December 2012, in particular intermodal connectivity
of air, sea and land for goods and passengers.
g.
Authorise the recommended LCT liner services during operations.
The team recommended three capital amortisation scenarios:a.
Full Capex model - Full EPC Capital expenditure to be borne by the

Project.
b.
Build, Own and Operate model - Government of Timor-Leste to

bear costs of breakwater, and earthworks improvements to site,
and the Project bears the capital costs of Marine and Land
Structures as well as the Operating Capital Assets.
c.
Terminal Operatorship model - Government of Timor-Leste bears

costs of breakwater, and earthworks improvements to site. The
Government of Timor-Leste then enters into a revenue sharing
agreement with the supply base operator for 20% of total revenue
off the topline.
The first scenario is provided to demonstrate the negative effect of the cost
of the breakwater and land improvements on the project viability. It is not
common for commercial projects to bear the cost of breakwaters.

I - 13
The second and third scenarios would be more commonly used in a publicsector / private sector partnership.
The second scenario is envisaged because this location requires the
construction of a breakwater to make the site a viable site. Under such cases,
it is normal for the Government in question to undertake the necessary
works to make the location viable. An example of this can be seen in the
12.9Ha dredging to provide access to the channel that will be undertaken by
the Australian government in the Darwin Marine Supply Base project.
The last scenario is called terminal operatorship. One example of this is
Tanjong Priok in Indonesia. The Government builds the terminal and retains
ownership and control of the facilities as a strategic national asset. The
operator brings the operating capital assets and manages the facilities, with a
revenue sharing model.
5.
Based on these revenue and Capex assumptions, the Commercial team

reported the following:
Project feasibility analysis on NPV and IRR

Capex
(US$)
NPV
(US$)
Revenue: Oil & Gas (offshore and onshore)

Full Capex Model
286,017,500
18,111,937
Build, Own and
Operate Model
81,530,000
18,111,937
Terminal
Operatorship Model
12,855,000
(1,316,068)
Revenue: Supply Base Plus All Available Cargo
Full Capex Model
286,017,500
80,364,981
Build, Own and
Operate Model
81,530,000
80,364,981
Terminal
Operatorship Model
12,855,000
48,486,367
IRR
Remarks
NA
Not viable. NPV falls far short of

Capex. Negative IRR.
Not viable. NPV falls short of
Unable to cover site lease. Project
loses money, negative NPV.
-4.1%

NA
-7.4%
7.8%
28.1%
Project breaks even over 20 years.

Healthy NPV and robust IRR.
Project commercially viable.
Table I 2 : Summary of NPV and IRR results for the different scenarios
A terminal operatorship model is the only one that demonstrates a

commercial viability for the Suai Supply Base as a business venture.

I - 14
6.
Additionally, the project should be viewed holistically as a multi-user

integrated supply base, a port infrastructure and an industrial estate. The
revenue from 250Ha industrial land sales will be able to cover breakwater,
earthworks and marine structures capital expenditure costs.
o Raw land cost at US$5 /m2
o Infrastructure development capital costs at US$20 /m2
o Gross land to nett saleable land at a ratio of 0.8
o Sale of industrial land at US$150/m2 (experience at Lamongan
Shorebase shows a 100 appreciation in land value after port
development)
Revenue from sale of industrial land: 250X10,000X0.8XUS$150 = US$300Mil
Cost of sales: (US$5 + US$20) X 250 X 10,000 = US$62.5Mil
Profit before tax: US$237.5Mil

I - 15
Table I 3 : EBITDA Forecast 2013 to 2022 (US$)
O&G (Offshore)
O&G (Total)
O&G (Total) + Liquid Storage
Supply Base Plus - All Available Cargo
2013
(1,795,634)
(1,795,634)
(1,306,754)
(1,306,754)

2014
1,475,206
1,475,206
2,290,006
6,014,806
2015
2,484,394
2,484,394
3,543,634
7,501,234
2016
4,604,814
5,906,166
6,965,406
11,039,406
2017
3,282,510
4,583,862
5,643,102
10,337,902
2018
841,602
1,743,120
2,802,360
9,359,560
2019
841,602
1,743,120
2,802,360
9,359,560
2020
462,914
1,364,432
2,423,672
8,980,872
2021
462,914
1,364,432
2,423,672
8,980,872
I - 16
2022
1,432,914
2,334,432
3,393,672
9,950,872
1.7.
Conclusions
The key findings and recommendations of the team are set out in summary herein :
Findings
1.
The Proposed Site, with the breakwater and land improvements, is

technically suitable for development of a multi user integrated supply
base.
2.
The Suai Supply Base will require a breakwater, which will be

constructed from locally sourced material.
3.
Due to the uncertainty of confirmed volume of activity from the oil

companies, the project forecast was made on certain assumptions
based on a high probability of occurrence, but there can be no
assurance that such forecast will be achieved.
4.
The Project will not be able to seek commercial sources of project

financing and will require Government funding.
5.
Phase 1, which is essentially oil and gas supply base with multi
purpose berths will require at least 18-24 months, provided the
Project starts breakwater construction by June 2011. We will be able
to have limited berth operations by December 2012 if we start in June
2011.
6.
The Darwin Marine Supply Base new development will be completed

by mid 2014. More details can be found in appendix C4.
7.
It is extremely critical to the success of the Project that the

Government of Timor-Leste carry out the recommended
infrastructure improvements and have these improvements
completed by December 2012. The findings in this report hinge on the
successful implementation of the recommended improvements.
8.
All port requirements for the Southern regions of Timor-Leste over the
next 50 years of sustained development can be accommodated within
the extended breakwater basin. This can be developed in 3 or more
phases as demand justifies.

I - 17
9.
The proposed Phase 1 development will certainly act as a catalyst for

the development of the Southern regions and the impact will be
immediately felt on commencement of construction.
10.
The development of an industrial estate adjacent to the Suai Supply

Base is necessary to generate two way cargo flows. This industrial
estate will benefit from access to the port facilities. The sale of
industrial real estate from this development will cover the capital
investment for the Suai Supply Base.
11.
In addition to the immediate economic contribution from the

construction activities, the operation of the construction LCT between
Lamongan Shorebase and Suai site will prompt intermodal
connectivity and commencement of trade as well as give the southern
region access to bulk fuel import capabilities.
12.
The oil and gas companies operate to high international standards and
hold their contractors to the same standards. They have stringent
requirements in the areas of HSE and require high track records of
safety. They require that management has at least 5 to 10 years
experience in the oil and gas industry. In contrast, the available
skillsets in Timor-Leste for the management and vocational positions
is not currently available.
Recommendations:
1. Due to the high cost of breakwater construction, we recommend that all
future port activities be developed within the breakwater basin.
2. Develop the Suai Supply Base and leverage the port facilities as the de facto
port in the south. This will allow the Suai Supply Base to generate revenue
that is stable. Moreover, this will cater for the port needs of the southern
region for at least 50 years.

I - 18
3. Acquire the land required (all phases including future expansion) up front and
before any construction commences. The land value will appreciate
significantly with the presence of the port facilities. The subsequent industrial
development and real estate sales will finance the cost of building the port
infrastructure.
4. To promote intermodal connectivity and to encourage development of
economic activity in the Southern Region, authorize the operation of a
monthly liner service LCT between Lamongan Shorebase and Suai Supply
Base commencing during construction. This will continue after
commencement of operations.
5. Plan and build offices in and around the Suai City. Build an industrial estate
adjacent to the Suai Supply Base to benefit from port access and
infrastructure upgrades. This industrial estate will then provide two way
commercial cargo. Promote industrial activity in the zone to build the future
SMEs that will eventually be the pillars of economic growth as the
infrastructure projects and petrochemical development move ahead over the
next 10 to 15 years.
6. Allow the Suai Supply Base operator to establish bonded zones within the
supply base as the need arises to facilitate construction and subsequently
operations with the oil and gas activities. Setup a Customs, Immigrations and
Quarantine office at the Suai Supply Base.
7. Provide tax incentives and duty exemptions for the Project as well as for
external contractors who setup at the Suai Supply Base and the adjacent
industrial complex.
8. Mandate the use of the Suai Supply Base for all oil and gas activities in the
JPDA and TLEA.
9. Consider whether it is in the interest of the Republic of Timor-Leste to initiate
discussions on a Government to Government basis to request that the
Republic of Indonesia authorizes the use of Suai Supply Base for oil and gas
activities so that Inpex Masela and ENI West Timor will contribute
significantly to the revenue of the Suai Supply Base.

I - 19
10. Appoint a suitable Company with experience running a multi user integrated
supply base and an operating template that is similar to the intended Suai
Supply Base to develop and deliver a complete skills development program so
as to meet international certifications and operating standards from day one.
11. Appoint a suitable Company with experience running a multi user integrated
supply base and established in the oil and gas industry to provide ongoing
management guidance, audits, reviews and consulting support to the Suai
Supply Base. The presence of this management support would allow the oil
and gas industry players to accept the Suai Supply Base from the onset of
operations.
12. Award the EPC contract to an international EPC contractor with experience in
the oil and gas industry.
13. If the Government of Timor-Leste wishes to have a Public-sector / Privatesector partnership, it should be based on the terminal operatorship model.
The Government will retain ownership and control of this strategic asset and
all its future expansion whilst still having the full benefit of a professional port
operator.
14. It is very important for projects of this nature to have demonstrable strong
Government support. Both for the success of the project itself and to be able
to attract other foreign investment and business.
o In Government communications
o Committed skills development program
o Infrastructure support (power, roads, etc)
o Policies and laws to facilitate and attract foreign investment
o Tax and duty incentives

I - 20
Acknowledgements:
We gratefully acknowledge the presence and inspiration of his Excellency Kay Rala Xanana
Gusmao at Lamongan Shorebase during the Shorebase Orientation Course.
His Excellency Kay Rala Xanana Gusmao was accompanied by:
His Excellency Pedro Lay da Costa, Minister for Infrastructure

His Excellency Manuel Serrano, Ambassador to the Republic of Indonesia
Francisco da Costa Monteiro, Petroleum Executive Advisor to the Secretary
of State for Natural Resources
We gratefully acknowledge the guidance provided by His Excellency Alfredo Pires, State
Secretary for Natural Resources.
We like to also acknowledge the following persons for their assistance and time during the
period of this study:
The SERN team:
Francisco da Costa Monteiro

Elga Pereira
Vicente Lacerda
Joao Camara
Francisco Ferreira
Josefa Nuning da Silva
Joaquim Amaral
Johny Leite
Luis Martins
Vicente Pinto
Helder Freitas
Domingos Lequisiga Maria
Tomas Talo Freitas
Leonel Hornai
Farid Alkatiri

Engineering Design (FEED) - Acknowledgements
I - 21
Autoridade Nacional do Petroleo:
Gualdino da Silva, President

Jose Goncalves, Director-JPDA
Rui Soares, Director - Development & Production
The oil companies operating in Timor-Leste:
ENI Timor-Leste, Tony Heynen, Country Representative

Conocophillips Timor-Leste, Peter R Smith, Country Manager
Oilex, Rajesh Padmagiresan, JPDA Project Manager
Reliance, Arabinda C Pati, Base Manager
We would like to congratulate the following for having completed the Shorebase Orientation
course and obtaining international certification for Oilfield Sea Survival.
Vicente Lacerda
Joao Camara
Francisco Ferreira
Joaquim Amaral
Johny Leite
Helder Freitas
Bambang Gunawan
Figure I 3 : Photos during the Shore Base Orientation Course at Lamongan Shorebase

I - 22
Part II
Technical Study

Engineering Design (FEED) Technical Study
II - 1
2.1.
Introduction
The Government of Timor-Leste has the intention to build a world class Logistics
Supply Base for offshore Oil and Gas activities on the southern coast of Timor-Leste
around the Suai area. When the Project team first studied the southern coast around
Suai, a site at Suai Loro with a preliminary natural breakwater was identified and
recommended to the Government of Timor-Leste for the construction of the Suai
Supply Base. However, we were given the direction to continue the study at the
allocated site as the Suai Loro location has been reserved for a commercial port
project.
At the start of the study, we were allocated a primary site of 395 Ha for the Suai
Supply Base, with a secondary site of 250 Ha that can be secured for future
expansion.
Primary Site: (Perimeter 8.24km, 395.4 Ha)
C1 (91915.5689 S, 1251809.5170 E)
C2 (91823.6756 S, 1251747.3084 E)
C3 (91741.4466 S, 1251848.6465 E)
C4 (91832.6071 S, 1251916.6662 E)
Additional Land to be secured for Future Expansion [if necessary]
(Perimeter 7.76km, 250.6 Ha)
D1 (91741.4026 S, 1251927.2402 E)
D2 (91743.8446 S, 1252028.6256 E)
D3 (91745.7733 S, 1252034.6811 E)
D4 (91752.4747 S, 1252022.6516 E)
D5 (91801.5272 S, 1252014.4735 E)
D6 (91803.5107 S, 1252001.7970 E)
D7 (91813.4372 S, 1251943.6232 E)
C4 (91832.6071 S, 1251916.6662 E)
C3 (91741.4466 S, 1251848.6465 E)

II - 2
Figure II 1 : Suai Supply Base Site

The project team made several site visits over the course of November, December
2010 and January 2011. The primary area was deemed sufficient for our current
needs and most of the survey activities were focused in this area. The team had the
following objectives during their visits:
To study overall site conditions,
To acquire seabed depth data from coastline to -3.00 mLWS which was
not included in the existing bathymetric data,
To get some of sedimentation behavior,
Existing site data was provided by the SERN team and used as a baseline to focus the
activities during the visits. As some of the data provided was old and no longer
accurate, the team conducted the following additional surveys on site:
Topographic Survey,
Bathymetric Survey,
Sedimentation Survey,
Note: A copy of the report for these technical surveys can be found in Appendix B1.

II - 3
2.2.
Observations at the Site
The primary site is level, with a gentle slope towards the sea. Vegetation is thick and
forested. Drainage is good and there is no ponding of water. The current usage
appears to be cattle pasture and small agricultural plots of cornfield. There are
clusters of housing just outside the north boundary, along both sides of the road.
Figure II 2 : Photos of Suai Supply Base Site Vegetation and Site Condition

II - 4
The river Karau Ulun runs along the western boundary of proposed site. This river is
shallow and wide, and will require flood control improvement before we can use the
Site. We have identified this river as source of breakwater material. At the same
time, this will also have the purpose of flood control improvement by deepening the
river bed.
Figure II 3 : Riverbed at river Karau-ulun

The site will require soil improvement to raise the level by 2m in general to cater for
wave protection along the southern boundaries (towards the sea).

II - 5
2.3.
Sea and Seabed conditions
The site consists of gradual sloping land towards a sandy beach. The seabed consists
of fine sand, with gradual sloping of 500m to achieve -5 LAT. (borelog sample data).
Based on three borelog samples provided to us by SERN, we can conclude that the
seabed consists of a mixture of fine sand, silt, sandy gravel, clay and shell sediment.
The deepest borelog reaching to 60m from the seabed disclosed no hard bedrock.
Most persistent sea swells at the site will arrive from the southwest with typical
heights of between 1m and 2m.
Tropical cyclones in the Timor Sea can developed between November and April
resulting in short lived, sever storm events often with strong but variable winds. The
figure below shows the tropical cyclone tracks logged over a 36 year period off the
southern coast of Timor-Leste.
Figure II 4 : Chart of historical cyclone tracks

II - 6
Eastlog retained the services of Institut Teknologi Sepuluh Nopember, Indonesia (ITS)
to conduct a study on the sea and sea swell at the proposed Suai Supply Base
location and recommend an orientation for the breakwater. A copy of the report can
be found in Appendix B2.
2.4.
Master Plan in Phases
2.4.1. Design Principles

Having assessed the general site condition and with input from the commercial team
after their user and site surveys, we determined that it was logical to complete the
supply base in the 1st phase to support the Oil and Gas industry with room to expand
in subsequent phases for dry bulk and other non oil and gas cargo. The development
was done along the following principles:
1) Breakwater required for 365/24 capability
2) Establish access to the main road from the Jetty and Supply Base facilities
and
3) West to East development, following the breakwater alignment to
maximise utilisation of the breakwater.
4) Full facilities and services as defined by the commercial team in Phase 1
5) Concentrate recreation and housing facilities near the main road access
to create community interaction with the surrounding inhabitants.
6) Large open areas for future expansion from the road to the sea.
7) Meet the port needs of the Southern region for the short term (10 years)
in phase 1 with provisions in subsequent phases for growth to handle
other cargo and passengers.
8) The diagram below shows the site allocated for the Suai Supply Base.
Zone A is slated for the Phase 1 activities. Zone B will be reserved for
future expansion. Zone C should be developed by the government into
an industrial complex.

II - 7
Zone C
Zone B
Zone A
Figure II 5 : Suai Supply Base Land Allocation

2.4.2. Supply Base Layout
With the above principles in mind, we have developed an overall master plan in 3
phases.
Phase 1
Phase 1 will encompass the full capability to support the Oil and Gas industry based
on current estimated demand. These same facilities also provide the capability to
export/import commercial dry bulk (<200,000MT per month) and general cargo.
Based on current estimated demand, phase 1 facilities will be able to support the
Suai and southern regions for the next 10 years.
- Western Breakwater and jetty with 4 Shorebase berths, 2 LCT ramps and
1 Barge berth. With these facilities, the base can support up to 4 PSCs in
residence at any one time or 2 PSCs and other potential customers
(mining, general cargo, dry bulk, onshore drilling, etc)

II - 8
Land based construction to support the activities for up to 4 PSCs in

residence. This includes Yards, Warehouses, Office space, general
accommodation, medical centre, liquid storage facilities, etc.
Figure II 6 : Layout for Main Office block and Main Post Block

II - 9
Figure II 7 : Suai Supply Base Master Plan Layout Phase 1

II - 10
Phase 2:
-
Extension of western breakwater, additional 4 shorebase berths facilities

and addition of bulk jetty
Land based construction to support the bulk jetty (dry bulk terminal, open
yard stockpile, closed warehouse stockpile).
Figure II 8 : Suai Supply Base Master Plan Layout Phase 1 and Phase 2

II - 11
Phase 3:
-
Eastern breakwater, fishery terminal complex, container terminal,

container yard, passenger terminal, passenger jetty
Figure II 9 : Suai Supply Base Master Plan Layout Phase 1, Phase 2 and Phase 3

II - 12
2.4.3. EPC Phase 1 Schedule (Summary)

Start of Detailed
EPC SCHEDULE (SUMMARY) - PHASE 1
Start of Preparatories
Engineering
Start of Construction
REV.1-20 MAR. 2011
No.
Description
10
11
12
13
14
15
16
17
18
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Remarks
SSB Phase 1
Preliminary Works
1
1.3
1.4
1.4.1
Construction
Package 1-Earthworks
1.4.2
Package 1a - Blasting and Rock Supply
1.4.3
Package 2a - Breakwater Phase 1a
1.4.4
Package 3a - Jetty Phase 1
1.4.5
Package 4a - Civil Works
1.4.6
Package 5a - Warehouse and Building Phase

1
1.4.7
Package 6a - Electrical
1.4.8
Package 6b - Mechanical Works
1.4.9
1.4.9.1
Package 7a - Fuel Tanks Phase 1

3000 KL Tank
1.4.9.2
500 Kl Fuel Tank
1.4.10
1.6
1.6.1
1.6.2
Temp. Facilities, Eqpt. and Services

RO Water Plant
Preliminaries
RO Water Plant
1.7
Security
1.9
Project Management Phase 1
1.10
Start of Operation
thru Jun 13
Start of Operations
Table II 1 : EPC Phase 1 Schedule (Summary)

The EPC Phase 1 Schedule with a breakdown of tasks required for each Package can be found in Appendix B4.

II - 13
2.5.
List of Facilities
2.5.1.
Phase 1 Suai Supply Base for Oil and Gas Industry

The Suai Supply Base Phase 1 will be a complete facility that will support
development of oil and gas in the South Timor Sea for the next 10 years.
The nature of Oil and Gas offshore activities makes it very unpredictable.
Many factors beyond our control or the PSCs control can result in urgent
unscheduled activity. Having to support more than 1 PSC means the Suai
Supply Base may not be able to deconflict both schedules. As a result, we
have designed the Suai Supply Base to cater for the worst case scenario in oil
and gas operation in terms of vessel timing, berthing time and emergency
response time. This scenario would occur not more than 10% of the time,
however cannot be neglected because of the complexity and sensitivity of oil
and gas operations.
For the remaining 90% of the time, during typical operations which are more
predictable, the Suai Supply Base will be able to fill the additional capacity
with general commercial cargo like dry and liquid bulk materials. Dry bulk
includes exporting mineral ores, importation of coal, fertilizer and other bulk
products. Liquid bulk is importation of processed products such as diesel,
gasoline, avgas and exportation of crude oil and Residual Fuel Oil (RFO).
2.5.1.1.
Land Facilities
a. Office block
The office block is a 2-storey composite concrete and steel building
that will serve as base operations office. Inside the office block will be
the port operations office, several support department such as
Business Support Services (BSS), Security, Sales and Marketing, HR
and Admin, Purchasing and Finance, HSE, IT, Radio Room and General
Managers Office. The remaining offices shall be occupied by Customs,
Port Personnel, Shipping Agent, etc. Additional offices will be available
for rental to customers such as Service Companies, PSCs, and
transportation provider.

II - 14
The office will be equipped with telephone and fax facility, internet,
and computer local area network.
b. Crew Change Building
A one storey concrete building will be constructed and used as a crew
change building. The building will be equipped with air conditioning,
toilet, wash basin, refreshment counter and AV equipment. It will be
used as waiting and induction area for incoming and outgoing crew
from offshore production platforms, drilling rigs, FPSO and FSO.
c. Common Warehouses
Two common warehouses will be built, each will be divided into two,
forming 4 warehouses of distinct usage as follows;
1,800 m2 warehouse (General Cargo) with cool room,
1,800 m2 warehouse (Chemical and Dangerous Goods),
1,800 m2 maintenance workshop (with 5MT overhead crane)
1,800 m2 fabrication workshop and inspection area (with 10MT
overhead crane)
The above warehouses come complete with oil catchment area,
drainage, eye wash, emergency showers, smoke detectors, fire alarm
system and 2 way access (steel door, 8mwide 4m high). The floor is
capable of resisting 15MT/m2 forklift load.
d. 4 X Mini Shorebase (MSB)
Mini Shorebase is a compact facility that a single PSC would utilize for
their operations. The facility is composed of 20,000m2 open yard, a
500m2 office, a 1,000m2 closed warehouse and a mini staging and
parking area. The area is enclosed with chain link or BRC fencing
complete with perimeter lighting and street lighting. Internal drainage
is provided to connect to main drain on the main street.
e. Temporary Explosive Storage
The explosive store is a facility design to store explosive materials to
support oil and gas exploration. The facility is designed as a temporary
structure which is composed of 6X20 foot containers. Each container
will be provided with additional zinc roofing and will be installed with
earthing and lightning protection. The facility will be provided with 3

II - 15
meter high earth mound to separate different type of materials and

enclosed with interlink wire mesh fence topped with three (3) layers
of barbed wire. The facility will be properly lighted and secured by
military/security personnel as required by the rules and regulations of
Timor-Leste. A security post will be provided for the security
personnel who will guard the area with an elevated security tower to
enhance the security management. 24hr closed circuit camera will
provide added security.
Initially, the facility will be used to store explosive materials to be
used for blasting materials required in the construction of the
breakwater phase 1. After the completion of blasting, the facility will
be refurbished to cater for its original purpose.
f. Fuel Tank Farm
The facility is composed of 2X500kl and 2X3,000kl tanks intended for
storing fuel. The 3,000kl tanks will be utilized to store diesel fuel for
drilling operation while the two 500kl tanks will be used to store
gasoline and aviation fuel to support the helicopter and small craft
crew change.
The tanks will be provided with 3-meter high earth mound
containment bund complete with internal drainage, gravel paving,
turfing, ramp for equipment access and other utilities. The tanks will
also be provided with sprinkler and foam fire fighting system as well
as fire hydrant and water canon.
The facility will be provided with incoming pumping system located at
the jetty, bidirectional piping system from the jetty to the tank farm
and the fire fighting system along the way.
The area will be enclosed by security fencing and will be provided with
elevated security towers, closed circuit camera, security post, office
and a storage container for tools and equipment.
The facility will also be provided by truck loading bays for
dispensing/selling fuel to land consumers complete with dispensing
pump and meters.

II - 16
g. Open Yard
The open yard is an unpaved ground that will be used to store
tubulars. The yard will be compacted to 90% compaction and built to
15 tons/m2 load bearing capacity. The ground surface will be sloped
gently by 1% to ensure good drainage and to avoid water ponding.
The yard will be enclosed with interlink wire mesh or BRC fence and
will be provided with work lighting. Pipe sleepers or base blocks of 45
cm high and each 4 meters long will be provided to support the
tubulars and to avoid contact with the ground.
h. Transit and Staging area
The transit area is a one hectare open area in close proximity to the
main gate to accommodate equipment, cargo and passenger vehicles
while waiting for pass, security checks or jetty berth. The facility
includes security post, driver rest area and toilet facilities.
i. Reverse Osmosis Plant and Water Storage Tanks
The Reverse Osmosis (RO) plant will have a capacity to produce 15 kl
per hour and 2 X 400kl storage tanks. The source of raw water shall be
from the sea or from a deep well. The facility shall be connected with
6 diameter pipeline to the jetty berths. A pumping station will pump
the processed water from storage tanks with a discharge capacity of
120kl/hr (required for O&G supply ship). Each discharge point will be
fitted with water meter and clip lock connection.
j. Fire Fighting Systems
The fire fighting system will be composed of the following;
Fire hydrants spaced every 50m complete with fire hose
cabinet and 2 X 35m fire fighting hose and nozzle,
Electric fire pumps backed up by diesel fire pump with
operating pressure of 8 bars,
Jockey pump to maintain stand by pressure of 10 bars,
Sea water pump back up,
Foam systems,
Firewater pond with 2 hours of reserve capacity,
Deep well and well water tank.

II - 17
k. Substation
The substation is an 8mx25m concrete building to accommodate the
following:
Step down transformer,
Low voltage panels and cabinets,
3 X 500kVA generators ,
Fuel storage tank with capacity of 3kl.

The building will be enclosed with interlinked wire mesh or BRC
fencing topped with three layers barbed wire as required in the ISPS
code.
l. Power Building
Power building is a 5mx8m concrete building to be used to terminate
the incoming high voltage cabling from the power grid. It will also
house high voltage panel and other equipments.
The building will be enclosed with interlinked wire mesh or BRC
fencing topped with three layers barbed wire as required in the ISPS
code.
m. Security System
The security system is composed of the following;
Main and secondary guard post,
Control room (in main office),
6 X guard towers,
33 X CCTVs complete with video recording server and storage,
LCD monitor and UPS backup and wireless receiver and
transmitter,
guard ready room (main accommodation block),
Guard quarters (main accommodation block).
Security vehicles (patrol jeeps, motor cycles, etc)

II - 18
n. Telecommunications Facilities
The telecom system is composed of the following;
Telephone system capable of data and voice capabilities
including tele and video conferences,
High speed internet access capable of voice and data
transmission,
VHF communication systems,
And as backup, there will be satellite system in place
o. Oil Spill Response Equipment
The facility will be provided with oil spill response services and
equipment, (i.e. sufficient boom length, skimmers and dispersants,
together with ISO tanks) for lease when required. Special clothing for
handling oil spill will be provided for each of the team members.
Vessels however are not necessary as the feedback from the oil
companies is that they maintain sufficient vessel capacity for first
responder.
The slipway will be used for launching the spill boom using tug or
work boat with sufficient power to tow it.
p. Waste Management
There are two types of waste that need to be managed at the Suai
Supply Base, namely domestic and industrial waste. For the domestic
waste, a waste segregation area will be provided. Segregated waste
will be disposed of at the local waste dumping area. For industrial
waste (including storage of hazardous waste as well as location for
transfers of hazardous liquids), a Waste Management Company who
specializes in handling, processing and disposing industrial waste will
be employed to handle it. During the construction phase, we will
work with the nominated Waste Management company to design and
build a suitable facility.

II - 19
q. Central Kitchen and Reefer Container Area

A Central Kitchen will be provided in the Suai Supply Base. This will
cater to the food supply requirement of offshore facilities. Foods,
cooked and uncooked and available locally or imported will be
reprocessed, packed and sealed in reefer and dry goods container.
The Central Kitchen will process those food items, store them in
reefer containers on the yard for subsequent transport to offshore
facilities. As such, a reefer container yard with adequate power supply
will be provided. During the construction phase, we will work with the
nominated Waste Management company to design and build a
suitable facility.
r. Operations Canteen
Operation canteen shall be provided to cater for base personnel 3
meals a day and guests/visitors. The canteen will operate 24/7, 365
days a year. A 12mX12m building complete with kitchen, food
preparation area, seating area, toilet and shower will be provided.
There will also be a space big enough for one reefer, one chiller and
one dry goods container for storage of frozen and dry food supplies.
s. Accommodation
A two storey 46m X 14m concrete building with at least 25 rooms to
house senior executives to Oil and Gas standards, a mess hall, game
room and sitting room will be provided at the base. The building will
be provided with an open air terrace and an outdoor eating area and
a parking area. It will be provided with high speed internet, telephone,
fax and other communication services.
There is no provision for other personnel housing. The intention is to
allow the local community to develop rental accommodation.

II - 20
t. Recreation Centre
There will be a recreation centre built near the Supply Base entrance
for base personnel use as well as for the general community. Below
are the facilities to be constructed;
Football field with spectator facilities and night lighting,
Community centre with internet room, library, mini-mart,
Outdoor badminton / basketball courts
Training and conference facilities,
Parking spaces
u. Helipad
During construction, a helipad for visual landing only will be provided
to facilitate inspections and visits by VIPs, dignitaries, customers, etc.
A permanent helipad with navigation aids and fuel storage will not be
constructed if the SUAI airport provides for it.
v. Medical Clinic
The medical clinic will be housed in a 40 foot container and will be
located near the main office block. The facility will come complete
with an emergency room, a treatment room and examination table. It
will be stocked with first aid equipment and medicine. An ambulance
will be available on standby near the clinic for emergency cases that
need transfer to Suai hospital.
2.5.1.2.
Marine Facilities
a. Barging Jetty
The barging jetty will be constructed first and will be used to unload
materials such as concrete piles and pre-cast concrete to be used for
the construction of the main jetty. The jetty will also be used for
unloading construction materials such as steel structures, steel barges
and fuel tanks plates as well as to support operations using heavy lifts.
The operation requires that a barge to be berthed alongside while the
crane is on the land. After the construction phase, the barging jetty
could also be used as an alternative jetty for unloading fuel from a

II - 21
tanker barge or to support commercial dry bulk loading and unloading

activities.
The barging jetty will be constructed using concrete sheet piles as a
retaining wall while the main pile will be concrete spun piles. It will be
provided with rubber fenders and 50 ton bollards. A temporary
mooring buoy will also be provided to support the operation of
barging jetty. Lighting for night operations and fresh water supply will
also be provided at the jetty.
b. LCT Ramp
Two LCT ramps will be constructed to support the trucking in of
construction materials such as bulk cement tank and other bulk
materials. The jetty will also be used for loading and unloading of
construction materials such as core materials and boulders to be used
for the construction of breakwater, reclamation and earthworks. The
jetty will also be used for the launching of concrete transit mixer for
the concreting of the main jetty. It will also be used for loading and
unloading of construction equipment to be used at offshore sites.
During operation and construction, the LCT ramps will be used for
loading or unloading of over sized and overweight materials or
equipment using transporters such as Cometto transporters or low
bed trailer as well as mobilization or demobilization of heavy
equipment such as crawler or truck mounted crane.
The ramp shall be provided with 3 nos. 50 ton bollard. The front of the
slipway will be dredged to -4.0 m LAT to accommodate 5,000 DWT flat
top barges.
c. Jetty Phase 1
The main jetty will be capable of berthing 2X5,000 DWT at -7.0 M LAT
supply boat and 1X10,000 DWT at -9 M LAT cargo vessel to support
the Oil and Gas activities in the TLEA and JPDA areas.
The trestle will be 15 m wide and 100 meters long and will be
provided with 2 tug boat berths complete with bollards, rubber
fenders and trestle lighting.

II - 22
The main jetty will be 50 meter wide and 150 meter long and capable
of 4x75m and 1x50m berth. The main jetty is designed to be wide
enough to accommodate the installation of bulk plants in the middle
for mixing and loading cement, barite, bentonite and brine to support
drilling. The jetty is complete with 50 ton bollards and rubber fenders.
Each berth is provided with one RO water, well water, firewater and
fuel outlet each.
d. Navigation Aids
To support safe navigation of ships in and out of the channel and
harbour, navigation aids and equipment such channel marker buoys,
boundary buoys, pile leading beacons, vhf communications, radar
reflectors and mooring buoys will be installed.
e. Breakwater
To ensure a 365/24 operations of the Suai Supply Base, a breakwater
will be constructed on west, south and east of the harbour.
It will be constructed from local materials quarried from nearby rivers
and from the nearest hill where good quality rocks are available. The
initial length of the breakwater is 1,850 meters. This is the minimum
length designed to protect the phase 1 facilities from the waves
brought by south west monsoon. It will protect the barging jetty, the
LCT ramps and the main jetty from the south west waves.
As new facilities and structures are built, extension on the main
breakwater will be built. East breakwater will be built simultaneous
with the construction of future facilities eastside of the basin.
2.5.2.
Phase 2 Suai Supply Base for Energy and Resource Industry

The Suai Supply Base phase 2 has been designed to upgrade the Suai Supply
base when the demand from customers justifies it. The primary aim of this
phase is to increase capacity at the base. To this end, the main jetty will be
extended to double its capacity and a dedicated commercial dry bulk jetty
will be constructed with the necessary support facilities.

II - 23
a. Commercial Area
Commercial area is a compact facility designed to cater for oil and gas
service companies. The facility is composed of 1,400 m2 open yard, a
250-m2 commercial space, parking area and roads.
Each facility will be enclosed with interlink or BRC fencing, fence
lighting and drainage, oily water catchment facility and other
industrial waste management.
Telephone, fax, internet and other communication medium will be
provided in this facility.
b. Extension of Supply Base Jetty
The main jetty will be extended if there is a need for it. The proposed
expansion is 50m wide and 150 m long. The extension will be able to
berth 2x75 meter, 5,000 DWT supply boat on the shallow side and a
10,000 DWT drill ship on the deeper side or 2x10,000 DWT dry bulk
barge on the shallow side and 10,000 DWT general cargo ship on the
deeper side.
c. Breakwater
The main breakwater shall be extended to protect the Main Jetty
extension and the New Dry Bulk Terminal. The design is similar to the
Phase 1 Breakwater
d. Bulk Terminal
i. Bulk Port Jetty
The main dry bulk terminal is a 2x400m berth with draft of -9
M. LAT. The terminal will be provided with two conveyor
system that is capable of loading 2 x 20,000 ton per day of
mineral ore.
ii. Closed Dry Bulk Storage
Bulk closed storage is composed of steel structured warehouse
complete with a concrete floor and high enough to
accommodate heavy equipment such as shovel, backhoe and
dump trucks. The warehouse wall shall be reinforced concrete
and capable of retaining high pile of bulk materials. The roof
II - 24
trusses are designed to carry conveyor system for stockpiling

materials. A vertical conveyor system shall be provided to
transport materials from the dumping shaft outside the
building to the warehouse.
iii. Open Dry Bulk Storage
A 20 hectares dry bulk storage area will be provided to support
the dry bulk operation. The ground shall be compacted to 15
ton/m2 or 90% compaction. Drainage will be provided and the
rainwater will be collected in a confinement pond for
treatment.
iv. Conveyor System
Conveyor system will be provided to load and unload materials
from stockpile area and warehouse to jetty and vice versa.
Trucking will also be utilized for transporting materials from
jetty to warehouse and stockpile area and vice versa. Each
conveyor system has a capacity of 20,000 tons per day.
2.5.3. Phase 3 Suai Supply Base for Energy, Resources and General Cargo
Phase 3 of the Suai Supply Base essentially converts the Suai Supply Base port
facilities to support all the port needs for the southern regions. This phase
recognizes the demand has shifted from pure energy and resources to general
economic activity. While retaining the ability to support the oil and gas
industry together with commercial dry bulk, additional facilities are added to
cater for general commercial cargo, fishery and passenger traffic.
a. East Breakwater
East breakwater will be constructed to protect the eastern part of the
basin where the container, passenger and fishery terminals are
located. The design and materials to be used will be same as
breakwater Phase 1 and 2. The top of the breakwater will be utilized
as roads going to the container jetty.

II - 25
b. Container Port
The container port is a 4-berth port capable of berthing up to 500 TEU
container ship or a maximum capacity of 600,000 TEUs per year. This
port is supported by an 80 hectare container yard for the processing
of incoming and outgoing containers.
The jetty and container yard will be provided with container cranes
and other equipment required for processing of containers through
the port.
c. Passenger/Cargo Terminal
The passenger terminal is capable of berthing 2 LCT vessels and 2 fast
crafts at the same time. It is supported by a Terminal Building, a
parking area, a transit area for waiting passenger buses, cars and
cargo trucks. The facility will be provided with fuel and freshwater
bunkering facility.
d. Fishery Port and Complex
The fishery port is a 4-berth port capable of handling medium-sized
fishing vessels. The facility is supported with refrigerated fish storage,
a fish canning factory, a fish auction market, an ice making machine
and parking area for trucks and car. The complex will be provided by
fresh water and fuel bunkering facilities for fishing boat.
2.6.
EPC Capex Cost
On top of the site Topographical and Bathymetric surveys, the technical team also
conducted surveys of the vendors and contractors in Timor-Leste to understand the
availability and costs of material, labour and equipment for the construction of the
Suai Supply Base. The conclusions from the surveys (a detailed site survey report can
be found in Appendix B1) are as follows:
1) Not all required materials and equipment can be found in Timor-Leste
2) The prices for materials and equipment available in Timor-Leste are generally
very high as compared to Indonesia. Materials are on the average 1.5 times
higher and equipment rental is at least 2 times that in Surabaya, Indonesia.
3) Most of the vendors and contractors are in or around Dili. There is very
limited availability in the Suai area. This will add additional mobilisation and
demobilisation costs.

II - 26
4) The route from Dili to Suai is unreliable. This increases the risk if all the
materials and equipment were to come from Dili.
5) During construction, there will be a need to bring personnel, equipment,
supplies and fuel from Lamongan to Suai on a regular basis. This can be
achieved by using an LCT (2kMT DWT) and a Tug and Barge set (5kMT DWT)
to run back and forth from Lamongan to Suai.
The project team however is mindful of the fact that one of the objectives of this
project is initiate economic activity in the Suai and southern regions. As such, the
Government of Timor-Leste has the desire to use as much as possible materials,
equipment and contractors from the local industry. With this in mind, the project
team has developed 2 separate cost scenarios.
1) International Domestic cost (commencement April 2011). This scenario
takes the best available cost for all the materials and equipment based on the
landed cost at Suai.
2) Domestic cost (commencement April 2011). This scenario takes as much as
possible material and equipment from local Timor-Leste vendors. The cost is
similarly landed cost at Suai.
The tables below shows a summary of the two scenarios.
Scenario 1
No
Description
Cost (US$)
1
2
Breakwater
Earthworks
3
4
Royalties (for Timor-Leste quarried materials)

Jetty & Marine Structures
11,500,000
31,000,000
5
6
Landbased Structures
Consultants fee
36,000,000
6,662,500
TOTAL
176,000,000
12,000,000
273,162,500
Table II 2 : EPC Cost Estimate (International Domestic Cost)

II - 27
Scenario 2
No
Description
Cost (US$)
Breakwater
225,000,000
2
3
Earthworks
15,000,000
11,500,000
4
5

40,000,000
47,000,000
Consultants fee
TOTAL
8,462,500
346,962,500
Table II 3 : EPC Cost Estimate (Domestic Cost)

Note:
a. The cost estimates have been developed using unit rates against estimated
quantities to arrive at the EPC Capex estimate. Unit rates for the Domestic Price
were based on quotes given by Dili contractors where available and for Surabaya
prices plus logistics and handling costs where not available locally. Unit rates for
International-Domestic Price was based on Surabaya prices plus logistics and
handling costs and approximately 40% of contract works using Dili rates.
b. The logistics and handling costs were developed using time charter rates for the
vessels required, paying Indonesian published port charges in Indonesia and at
Suai.
c. Fuel costs are estimated at US$0.85 /litre FOB.
d. In addition to costs developed from the rates and quantities stated above,
certain sums were allocated for preliminaries, site expenses, logistics and
handling, site security and other costs required to execute a contract of this size,
in a Greenfield site.
e. A sum of US$11.5 Million has been included as royalty payments to the
Government of Timor-Leste for rock and sand to be quarried locally.
f. 15% has been added on top of all this as EPC contractor profit and attendance
(which includes 1% as engineering design fee) and 2.5% for Consultant to
Administer this EPC.
g. The costing assumes availability of materials and equipment according to the EPC
phase 1 schedule in section 4.3.
h. All imported material and equipment do not incur any import or excise duties in
Timor-Leste. All payments to foreign entities do not factor in withholding taxes. If

II - 28
there are withholding taxes, the EPC estimate will need to be grossed up to
factor this in.
i.
All prices are based on prices as of 15 February 2011. The actual EPC awarded
price may be affected by the general inflation in fuel prices and its knock-on
effect on other materials required for the construction of the Suai Supply Base.
j.
The cost estimate for International-Domestic assumes that the project

commences April 2011. Should this be delayed, and the project is unable to
complete the breakwater before the onset of poor weather conditions in April
2012, there would be an increase in cost as the project cannot recommence
breakwater construction until 4 months later. The sequence of build for the
breakwater, as well as the mix of materials used to prevent wash away would
change and finally, contractors which have mobilised would need to stay an
additional 6 months with scaled down activity. Under such conditions, the
completion of the project will be delayed by up to 12 months
k. For the Domestic pricing, because of the limited availability of material and
equipment in Timor-Leste, there will also be a significant impact to the schedule.
Local suppliers and vendors will need to mobilise or purchase materials and
assets from overseas in order to fulfil their commitments. It is estimated that the
schedule for this scenario will be delayed between 12 to 24 months.
2.7.
Maintenance Cost Estimate
To understand the type of maintenance costs required at the Suai Supply Base, the
team studied historical data from a similar facility, which is Lamongan Shorebase in
East Java.
2.7.1. Maintenance of Infrastructure
Based on the historical maintenance costs incurred in Lamongan Shorebase which
operates to a high standard of preventive maintenance, we recommend a provision
of 1% of the Infrastructure Capital Expenditure for the Marine and Land structures as
an annual budget for maintenance and repairs.
This provision of 1% is in line with industry practice for Marine based assets as these
assets are exposed to harsh operating environment. The harsh operating
environment caused by waves, salt water and strong winds requires constant and

II - 29
regular preventive maintenance and replacements to maintain a high level of

operational availability.
In addition, the Marine facilities are subjected to controlled collision type forces
when vessels berth or when berthed vessels are subject to the forces of waves,
current and wind, driving it onto the fender system.
This provision of 1% is intended to cover preventive maintenance, cost as well as
replacement of damaged structures.
The list below is a summary a typical preventive maintenance program based on a
monthly cycle:
1. Road, Drainage, Fencing and other Outdoor Maintenance
Maintenance of road pavement, shoulder and kerb
Maintenance of road marking
Maintenance of road and safety signage
Maintenance of fence and gate
Maintenance of drainage systems
2. Warehouse and other buildings
Repainting of steel structures
Repainting of roof and cladding
Electrical maintenance
Mechanical maintenance
3. Port Operation Office, Staff Accommodation, Staff Canteen and Kitchen, etc.
Maintenance of roofing, walls and flooring
Maintenance of heating and air conditioning units
Electrical and lighting maintenance
Mechanical, piping and sanitary maintenance
Outdoor maintenance such as landscaping, parking area and outdoor
lightings
4. Jetty
Maintenance of concrete deck, kerb and under jetty structures
Maintenance of fenders and bollards,

II - 30
5. Fuel Tank and Piping System

Maintenance of fuel tank, valves, access ladder and other appurtenances
Periodic testing of firefighting system which includes fire hydrant, foam
fire extinguishing units
Maintenance of incoming fuel piping, fuel pump, fuel dispensing system
oily water waste management
Maintenance of civil structures such as road, parking, drainage, fence
gate and security towers
Maintenance of containment bund, turfing, gravel paving, access stair
ramps
and
and
and
and
6. Gensets and Portable Lighting

Periodic and preventive maintenance of portable and stationary gensets,
lighting and engine welder genset
Emission test
Grounding test
Regular Overhaul
7. Explosive Bunker
Maintenance of containment bund, fence and gate
Maintenance of outdoor lighting, grounding and lightning protection
Maintenance of storage container and roofing
8. Electrical and Outdoor Lighting
Maintenance of street, jetty and parking area lightings
Maintenance of substation and power house building which includes main
and emergency generator sets, transformer, fuses and breakers, distribution
boards and control equipment
Maintenance of outdoor distribution panels and housing structures
9. Mechanical, Fire Fighting and other Piping Systems
Maintenance of the diesel engine, motor and pumps
Periodic test of fire hydrant motors, hydrant and hoses, fire monitor, etc.,
De-rusting and repainting of firefighting, well water, RO and oily water piping
system,

II - 31
10. Navigation Channel and Equipment

Maintenance of pile leading beacons
Maintenance of channel marker, navigation and special buoy which includes
buoy chains, counterweight, buoy, solar panel, battery and signages and
radar reflector
Maintenance of mooring buoys
Maintenance of VHF tower and VHF communication equipment
11. Water Meter, Fuel Meter
Maintenance of other equipment such as fuel and water meter
Calibration and periodic certification
2.7.2. Maintenance of Operating Assets
Based on the historical maintenance costs incurred in Lamongan Shorebase which
operates to a high standard of preventive maintenance, we recommend a provision
of 5% of the Operating assets Capital Expenditure for maintenance and repairs.
This provision of 5% is in line with industry practice for assets operating in the Oil
and Gas industry as these assets need to be certified periodically to high standards.
The harsh operating environment caused by salt water spray and strong winds
requires constant and regular preventive maintenance and replacements to maintain
this high level of operational availability. The vessel and vehicle assets consume
lubricants and other consumables (tyres, filters, etc) to maintain their operational
availability.
This provision of 5% is intended to cover preventive maintenance, corrective
maintenance, consumables and certifications and inspections for these operating
assets.
The list below is a summary a typical preventive maintenance program based on a
monthly cycle:
1. Heavy Equipment
Periodic and preventive maintenance of heavy equipment such as crane,
trailer, forklift, etc
Tire maintenance

II - 32
Recertification such as load test and other test on lifting gear such as boom
limiter switch, emergency cut off switch, overload switch etc
Lifting gear certification such as sling wire, shackles, etc
Emission test
2. Service and Security Vehicles

Periodic and Preventive of service vehicles such as pick up truck, water truck,
rubbish truck, etc
Tire maintenance
Emission test
3. Maintenance Equipment
Maintenance of other equipment such as welding machine, grinder, electric
and bench grinder, lathe machine, etc
Maintenance of chain block and other tools
4. Tugboat and Passenger Boat
Preventive and periodic maintenance of tugboat and passenger boat
2.8.
Utilities in the Suai Area
2.8.1. Electricity
The electrical grid in the Suai area is still being developed. The current power
capacity inSuai city is 1MW. This comes from diesel generators. The power project to
establish a power plant in Betano, capacity 120MW, is scheduled to go online by 3Q
2012. It is unclear when the power grid will link to Suai, however the project caters
for a sub-station at the Suai area with 10MW.
As there will be a need for power at the Suai Supply Base site from the onset of
construction, the EPC contractor should be self sufficient and provide for its own
power generators and fuel supply. The timeframe for completion of the power grid
to Suai city is too near the planned commissioning date of the Suai Supply Base and
any delay in that project will have grave impact to the Suai Supply Base operational
capability. Moreover, it is unclear if provision of power to the Suai Supply Base has
been catered for in the power grid project. As such, we recommend that the
generators used for construction be taken over by the Suai Supply Base during
operations. When power from the grid is connected to the Suai Supply Base, these

II - 33
generators will then transition over to be the backup power supply. As such, the EPC
should provision for power generation of at least 2 X 500KW generators or similar
configuration.
2.8.2. Water Supply
Water in the Suai area comes from mountain sources and the river. Limited water
piping is available and the condition of the water is inconsistent. Technical reports
provided by SERN also indicate that water supply from the existing sources are of
inconsistent quality. It is unclear when the Government of Timor-Leste has
scheduled to pipe fresh water supply to the Suai Supply Base site or even if this
project has been provisioned for.
As such, the Supply Base will provide for a reverse osmosis system that will provide a
stable and good supply of fresh water. This reverse osmosis system coupled with 2 X
400MT storage tanks will be able to provide the fresh water needs of the Suai Supply
Base. This system can also serve as emergency fresh water system for the district.
2.8.3. Telecommunications
The telecommunication infrastructure available in Suai is limited to land lines.
Mobile network is available with a Timor Telecoms tower in place in Suai city. There
is very limited connectivity for internet connections and when available, stability and
bandwidth are issues. It is unclear when telephone lines will be pulled into the Suai
Supply Base site.
We have explored the possibility of broadband satellite connection for voice and
data. Although expensive, this option is available in Timor-Leste and will be setup to
support the base in the event that such national infrastructure is not completed
before the commissioning of the Suai Supply Base.

II - 34
Part III
Commercial Study

Engineering Design (FEED) Commercial Study
III - 1
3.1. Introduction
The commercial study has the following objectives:
1. Identify the potential users of Suai Shorebase, and assess their needs over a
10 year period.
2. Identify the facilities and services required by the users, and the dates of
intended use.
3. Recommend a selling price for each item of service for the purposes of our
own forecasting, as well as for Government of Timor-Leste to negotiate and
agree with the users, a commitment for domestic expenditure.
4. Provide Manning Chart and a skills development programme.
5. Provide an estimate of operating expenses for purposes of financial modeling.
6. Identify the Source of funding and cost of funding.
7. Identify and/recommend fiscal issues ranging from handling of bonded or
duty free exemptions for project equipment, and for PSCs during operations.
8. Identify and recommend suitable tax and fiscal exemptions to improve
returns.
9. Identify and recommend required improvements to infrastructure (eg airport,
hotel, roads etc).
At the kick-off meeting, the following approach to the study was agreed:
1. Identify each PSC and obtain summary of their commitment (seismic,
exploration), and whether they are at exploration, development or
production stage
2. Prepare a Detailed Questionnaire as the basis to focus discussion.
3. Conduct a Presentation and discuss the questionnaire to all PSCs and Service
Companies Major Event , need to fix date in advance and to send out
invitations and to ensure attendance. Government of Timor-Leste Ministers
to attend.
4. Send out and obtain reply to Questionnaire to PSC and Service Companies.
5. Follow Up one to one interviews with Logistics decision maker of PSC.

III - 2
6. Analysis of Findings, draft of report of facilities required.

7. Financial Modelling based on input from Technical Team.
8. Final Report.
After initial surveys with the PSCs, the feedback from them was that they were
looking for firm commitment from the Government on the Suai Supply Base project,
as such the Major Event proposed in item 3 was postponed in favour of individual
face to face presentations and discussions with the PSCs. The project team should reengage the industry players once more concrete progress on the Supply Base has
taken place.
The team made several trips to both Dili and Suai in December and January. During
these trips, the team evaluated the readiness of both Dili and Suai to sustain the
activity required at the Suai Supply Base and was able to identify gaps and
opportunities for the project moving forward.
During the course of the study, the commercial team has decided to sub-divide the
commercial study into 3 sections.
1)
2)
3)
4)
User Surveys and Infrastructure Review Objectives 1, 2, and 9

General Taxation Regime Objective 7
Labour Section Objective 4
Financial Section Objectives 3, 5, 6 and 8
3.2. User Survey and Infrastructure Review

This section is broken down into:
1. User surveys (oil and gas),
2. Survey for potential non-oil and gas cargo
3. Facilities and Services required primarily for oil and gas but able to
accommodate other commercial cargo
4. Recommendations on Infrastructure Improvements and Developments

III - 3
3.2.1. User Survey (Oil and Gas)

3.2.1.1.
Approach to Interview Sessions
With the user interviews, the team set out with the following objectives:
1) Establish a forecast of drilling activities in the next 5-10 years.
2) Validate the size and range of facilities and services at the Suai Supply base.
3) Gather general feedback on their views on the Suai Supply Base/
The team had an interview session with ANP and there was very strong level of
support and open sharing of information. The team also interviewed the following
PSCs to gather their feedback on the range of facilities and services required at the
base as well as other general feedback if they were to use the Suai Supply Base:
- Reliance
- ENI
- Conoco Phillips
- Oilex
During the interview, the team carried out the following:
-
Briefed the PSCs that the Government of Timor-Leste had appointed EastLog
Holdings Pte Ltd to conduct a technical and commercial feasibility study on
the establishment of a Supply Base at Suai.
Introduced EastLogs construction and operation credentials.
Presented proposed scope of facilities and services at Suai Supply Base. (refer
to Project kick-off presentation) and engaged each PSC in an in depth
discussion on the technical aspects.
Asked each PSC their plan of activities from 2011 through 2015.
Asked each PSC for their views on using the Suai Supply Base.
Over and above discussions with the PSCs, and for completeness of scope, the
project team also engaged the potential service companies in discussion to solicit
their requirements as well as the level of support for the project.

III - 4
3.2.1.2.
Current Activity (from user surveys)
Figure III-1 : TLEA and JPDA Acreage

Lot
TLEA A, B & H
Contractor
ENI
TLEA C
TLEA K
JPDA 06-101A
(Chuditch)
JPDA 06-102
ENI
Reliance
Minza
JPDA 06-103
JPDA 06-105 (Kitan)
Oilex
ENI
JPDA 03-12 and 03-13

(Bayu Udan)
JPDA 03-19 & 03-20
(Sunrise)
Conoco
Philips
Woodside
Petronas
Activities
Initial work program indicates 1 well to be drilled in each
towards the end of the exploration license.
2 wells back to back to be drilled in 1Q 2011
1 well, Dec 2010 to Jan 2011
Plan to drill in 2011
Contractor to exit and return block to Government of
Timor-Leste.
2 well drilling program. 1st well in 1Q 2011
Preparation for production in 3Q 2011. Currently 4
development wells. Preparations for 4 more exploration
wells in the south side, to start mid 2011.
No new drilling program planned. Currently 11 wells in
production.
Pending agreement on gas processing approach
Table III 1 : Summary of Current Activity from User Surveys

III - 5
3.2.1.3.
Forecast of O&G Programs from User Survey
None of the parties currently operating in Timor-Leste waters are able to provide any
reliable information on drilling activities beyond 2012. As a result the commercial
team has had to develop their own projections based assumptions of a certain level
of activity.
Due to uncertain nature of exploratory drilling, these projections are purely
estimates based on the best information available at the time of this report. As with
all projections, there is no assurance that the activities forecasted will be at that
level or at all.
However, several key conclusions can be drawn from the discussions with the
current PSCs:
1) Only 50% of acreage has been tendered out. No new exploratory drilling
expected before 2015.
Only 6 out of 11 lots for TLEA have been tendered out previously. More than
50% of the JPDA remains open acreage. The Government of Timor-Leste will
likely conduct a round of acreage release in 4Q 2011. If we assume 12 months
for additional seismic activites together with 12 18 months subsequently
for planning, submission and approval, that means no new exploratory
drilling expected before 2014.
2) As at 2011, only 2 fields will be in production, notably Kitan and Bayu-Udan.
ENI has plans to bring Kitan into production in 3Q 2011 but potentially has a
life cycle of only 8 10 years. Bayu-Udan is in production with 11 wells and
no plans for any additional drilling.
3) The current exploration drilling programs for Reliance and ENI have
completed with no success and no further activities planned.

III - 6
4) The development of Sunrise field has been delayed.

Differences of opinion on the approach for exploitation of the Sunrise gas
fields have delayed the program. Ideally, these issues should be resolved to
allow activities to recommence by 2014, with the Suai Supply Base fully
operational and able to support the production drilling, project development
and long term production. The development and operation of this field is
critical to the success of the Supply Base as this is the large discovery of gas
that will be developed once differences of opinion on its development are
resolved. The only issue is one of timing. We understand there are 2 possible
scenarios on developing the gas: either by landing the gas to Timor-Leste and
an onshore LNG plant or by a floating LNG. Both these scenarios bring
benefit to the Shorebase.
a. The gas is piped to an LNG plant to be developed in Timor-Leste
during the pipe construction phase (approximately 2 years), the
Suai Supply Base can see much larger revenue from the piping
cargo passing through. However, in production, the activity level
volume of business will be less than the 2nd scenario.
b. A floating LNG plant is used. In this scenario, the production
support activities will be higher, approximately double that of the
first scenario.
3.2.1.4.
Feedback from PSCs
The following is a summary of the feedback received:

1) PSCs were previously skeptical about the Governments plan to setup a
Supply Base at Suai, as this has been publicized for quite a while, with no
concrete steps taken.
2) The PSCs are happy that the Government has appointed EastLog to conduct
the technical and commercial feasibility.
3) The PSCs would like to know whether the Government will actually proceed
with the development of the Suai Supply Base.
4) All the PSCs queried whether our design would incorporate a breakwater and
give the base 365/24 capability.

III - 7
5) The PSCs generally accept our proposed list of facilities and services. They
reviewed the proposed design and standards from EastLog and were satisfied.
6) The PSCs stressed that the facilities and services must be complete for them
to use the Suai Supply Base and not have to rely on Darwin for some services.
7) None of the PSCs were able to provide any forecast of activities beyond 2012.
8) The PSCs requirements for using the Suai Supply Base:
a. Must be built to international Oil and Gas standards.
b. Should be completed before the new Darwin offshore supply base is
scheduled to be completed, as they do not wish to move twice (from
existing Darwin to New Darwin Offshore Supply Base and then Suai
Supply Base).
c. Must offer full range of facilities and services they do not want to
have to use both Suai and Darwin.
d. Operator must have a proven track record of managing a multi-user
integrated supply base.
e. The project must demonstrate high level of HSE awareness and
compliance, from the onset of design, construction and through to
operations.
f. There must be skilled workforce available in Suai.
9) The PSCs expressed interest in the skills development program as this would
also establish a pool of skilled resources that they eventually can tap on. The
Government of Timor-Leste is already moving forward in this area with a
request to EastLog for a comprehensive program to train at all levels and
during the construction phase in preparation for operations.
10) The PSCs were concerned about the general state of the surrounding
infrastructure in Suai (i.e. road transport, telecommunications, small industry,
airport and helipad, etc)

III - 8
The project team recommends that several steps be taken to keep the industry
engaged and updated as well as build confidence in the Suai Supply Base project.
a. Regular project status communication to the general industry with
invitations to visit the project site.
b. Use only contractors that have experience working for the Oil and Gas
industry and understand their high standards.
c. High standard of project management and execution rigour throughout
the project timeline.
d. A focus on HSE at all levels. The eyes of our future customers are on us
and monitoring our commitment to HSE, starting at the construction
phase.
3.2.1.5.
Service Companies
It is envisioned that some of the services provided at the Suai Supply Base will be
provided by external service providers.
-
Cementing/Fluid/Formation Evaluation/Wireline
Logistics Provider/Forwarder
Waste Management
Catering
OCTG/Casing/Premium Connections/Pipe Threading
Oil Spill
Explosives
Medical
Drilling Company
Inspection and Certification Company
General Fabricator
CCU/Skips and Baskets
General Stockist
Rigging and Mooring/Marine Offshore

III - 9
The project team canvassed the different service providers and has the following
conclusions:
- Service companies will go where there is a business need and the facilities are
available.
- Decision on permanent presence or ad-hoc mob and demob will be purely
based on the level of activity anticipated. With current projections, the
activity at Suai is unlikely to attract permanent presence of these service
providers. This might change if onshore development takes place.
- They are generally happy with the base masterplan and have confidence in
EastLogs ability to provide them with the necessary support and
infrastructure as well as retain the Oil and Gas customers. They have an
existing relationship with EastLog and most have a hub in or around
Lamongan.
- General concerns:
o Availability of infrastructure and facilities (power, water, warehouse,
yard, heavy equipment, etc) and if there are safety standards.
o Availability of skilled labour.
o Commercial pricing of facilities. (Note: Pricing structure can be
tailored for service companies if necessary and a 2 tiered pricing
structure established.)
o Will the base operator understand their needs?
3.2.2. Survey for Potential Non Oil and Gas Cargo

The primary economic activity in the Southern region currently consists of
agriculture. Access to the region is difficult and the supply and movement of goods is
tedious. The power, water, waste management and telecommunications
infrastructure is only just being developed. There are however several industries that
have the potential to grow in the short term and thus bring investment and
economic activity into the region.

III - 10
3.2.2.1.
Movement of goods and supplies
Once the Suai Supply Base is operational, the same facilities built for the Oil and Gas
industry now becomes available to use as a springboard for many other industries.
The port facilities will open the south to direct shipping of goods and supplies. All
manner of goods, from basic food and supplies, to electronics and home appliances
and even bulk cargo and livestock can now find their way easily to the Suai area and
on to the rest of the South.
The immediate trade links with Lamongan in East Java and Darwin in Australia will
open up import of general supplies and foodstuff. The multi purpose jetty as well as
the LCT ramp will allow break bulk, containerized cargo, tracked vehicles, etc and
open up many opportunities for the local industries. This will also be the point of
entry for construction equipment and materials for Government infrastructure
projects.
3.2.2.2.
Liquid Cargo
The port will also allow the importation of diesel, gasoline and aviation fuel directly
to the south without having to go through Dili and the overland route over the
mountains.
3.2.2.3.
Local Industries
The waters to the south of Timor-Leste are generally considered to be attractive for
commercial fishing activities. The existence of a sheltered port will enable the
Government of Timor-Leste to develop the commercial fishing and seafood
processing activities.
Lumber and agriculture industries will also be benefit from access to port facilities
for export.
The port facilities will also open up the channel for export of minerals. This will allow
the Government of Timor-Leste to commence development of the mining industry.

III - 11
3.2.2.4.
Southern Petrochemical Corridor (Suai-Betano-Beaco)
The petroleum sector brings with it tremendous opportunities for upstream

(fabrication, logistics support, tourism and entertainment, etc) and downstream
industry (chemicals and petrochemical, fertilizer, etc). The general economic
development in the southern region will also help develop local small industries to
support this growth.
3.2.2.5.
Increased Industrial Activity and Manufacturing
Once the Port facilities are in place, the Airport is operational, road infrastructure
connecting Dili and Suai are available for container traffic as well as scheduled
passenger (bus) routes and the infrastructure around Suai is established, Suai then
becomes an important hub in the south for intermodal integration of transport both
goods and passenger. Using the Oil and Gas industry as an enabler, and with the
Suai Supply Base as a catalyst, the economic development of the southern regions
can be steady and sustainable.
The next step would then be to build an industrial estate adjacent to the Suai Supply
Base (Zone C). This industrial estate will be sowing the seeds of future local small and
medium enterprises that can flourish as the larger investments move into the Suai Betano Beaco corridor. With the improved infrastructure and access to
international port facilities for shipment of cargo, industries around Suai can blossom.
Zone C
Zone B
Zone A
Figure III-2 : Suai Supply Base Site Allocation

III - 12
This industrial estate will benefit from the port facilities and infrastructure upgrades
and will contribute to two way cargo volumes at the port. This industrial estate can
be built in phases as demand increases. It will serve as the platform for industrial
growth for the southern region. The industrial estate will also allow the Government
of Timor-Leste to recover some or all of its capital expenditure in building the port
facilities.
3.2.3. Facilities / Services required

3.2.3.1.
Role of Supply Base
The Suai Supply Base has for primary role the support of offshore oil and gas activity
in the Timor Sea and potentially onshore drilling activity in Timor-Leste. The current
logistics support for offshore oil and gas activity in this area is done out of Darwin,
with only Reliance managing this out of Dili. Reliance was able to do so because they
had a single drilling program where much of the supplies were loaded on the rig at
source and brought together with it.
To be able to justify the Oil and Gas customers using Suai as their supply base and to
retain this customer base, a full suite of the standard services and facilities need to
be made available at Suai. Moreover, these facilities and services need to meet
International standards for the Oil and Gas industry. The customers in the Oil and
Gas industry will not compromise on standards of quality and safety as any errors
can have potentially catastrophic effects. It will also not make economic sense for
them to have to use Suai for half their needs and another supply base for the
remaining services. Thus, Suai needs to be able to provide for all of their basic needs.
This multi-user integrated logistics supply base will be similar to the facility currently
managed by Eastern Logistics at Lamongan in East Java.

III - 13
3.2.3.2.
Facilities and Services
Core to the Suai base design is a next generation concept for Multi-User Integrated
Supply Base called MiniShoreBase (MSB). Each PSC in residence will be required to
lease 1 X MSB. Each MSB will come with a 2 Hectare open yard, 1,000 m2 Warehouse
(General Cargo), Office space. This allows the PSC to operate efficiently within the
shorebase as all his facilities will be in close proximity, within a single fenced area.
The MSB will also come with a yard and warehouse crew (trained and administered
by the Suai Supply Base team) to manage his facilities. For all PSCs, the Suai Base will
also make available 1 set of OilSpill equipment which can be leased on an ad-hoc
basis.
The commercial team used the proposed list of facilities and services presented at
the Project kick-off to engage the PSCs in discussions to finalise their requirements.
The following is the revised list based on their feedback. This has been furnished to
the technical team as input for their design of the base layout and buildings that
need to be available from the start of operations.
a. * Berths
4X75 and 1X50 multi purpose berths (150mX50m), able to
accommodate 2X75m berths (crew change) at 7m LAT and 2X75m
berths at 9m LAT and 1X50m berth at 7m LAT.
Berths have sufficient area for bulk tanks, as well as safe working
zone for handling OCTG
All weather 365 days capabilities, with lighting for 24 hours work.
Radar Navigation aids, channel markers, VHF communication
equipment, 4 X mooring buoys.
b. * RORO jetty with LCT Ramp
2 X ramp for LCT at 4m LAT are needed to support construction. These
will then subsequently be used in operations.
Ramp provided with 3 X 50MT bollard
c. Crew Change Building.
Small building with air conditioning, AV equipment, toilets and rest
area.
d. Port Operations Office (within main office building)
For port base operations, with a radio room.

III - 14
e. * 2 X Warehouses buildings
2 X 3,600 sq m each managed by Suai Supply Base team, complete
with oil catchment areas, proper drainage, eye wash, emergency
showers, smoke detectors, alarm system, 2 way access (steel door,
8mwide 4m high). Floor capacity of 15MT/m2. Each building will be
divided into 2 units to provide the following:
- Warehouse (General Cargo) of 1800 m2 with cool room
- Warehouse (Chemical and Dangerous Goods) of 1800m2
- Maintenance and Fleet Workshop (with 5MT overhead crane)
- Fabrication Workshop and Inspection area (with 10MT
overhead crane)
f. * 4 X Minishorebase (MSB)
Each MSB will come with a 2 Hectare open yard, 1,000 m2 Warehouse
(General Cargo) and a 500 m2 Office space.
g. Open Yards 10 ha.
Compacted or filled to allow 15MT per sq m of load, divided into 1 ha
plots, 100m x 100m fenced to 2 m high, with drainage. Ground will be
sloped to 1% for good drainage and reduce ponding. Provision of light
for night work, as well as provision of power to support a porta cabin
office.
h. ** Transit and Staging area
1 hectare open area in close proximity to the jetty for vehicle and
equipment staging. This area will also include driver rest area and
toilet facilities.
i.
** Operation Fuel Station

Intermediate fuel storage tanks (2 X 10kl ISO tanks) complete with
spill protection, fire fighting, lightning protection, lighting for night
use and fencing with 3 layer barbed wire.
j.
* Fuel Tank Farm

Fenced off area for liquid storage tanks.
- 3000kl X 2 for diesel
- 500kl for gasoline
- 500kl for aviation fuel
k. * Reverse Osmosis System and Water Storage area

RO system of 15kl per hour capacity and 2 X 400kl storage tank. Tank
discharge capacity will be 120kl/hr (required for O&G supply ship)

III - 15
l.
Fire Fighting Systems

Fire Hydrants every 50m complete with fire hose cabinet and 2 X 35m
fire fighting hose and nozzle, fire pumps with operating pressure of
8bar and back up including from sea, foam systems, firewater pond (2
hour reserve capacity) and deep well.
m. Sub Station
25mX8m building to accommodate the following:
Step down transformer
Low voltage panels
3 X 500kVA generators + storage tank (outside) 3,000l
n. Telecommunications Facilities
Connect to the existing Timor Telecom infrastructure for high speed
internet access, data and voice capabilities, VHF. As a backup, there
will be satellite system in place.
o. Security System
Main guard post, Control room (in main office), 6 X guard towers, 33 X
cctvs, guard ready room (main accom block), and guard quarters
(main accommodation block). Security vehicles (patrol jeeps, motor
cycles, etc)
p. Offices
2 storey building (13m X 50m) with Offices for rental as well as for use
by the Operator.
q. Oil Spill Response Equipment
Maintain common user oil spill response services and equipment, (ie
sufficient booms, skimmers and dispersants, together with ISO tanks)
for lease when required. Vessels however are not necessary as the
feedback from the oil companies is that they maintain sufficient vessel
capacity for first responder.
r. * Explosive Storage
There is no justification for a permanent explosive bunker. We will
build temporary porta cabins with earthworks/bundwall and
adequate Public Traffic Route (PTR) zone.
s. Waste Management Area (including storage of hazardous waste as
well as location for transfers of hazardous liquids)
To be designed in consultation with waste management specialist

III - 16
t. Central Kitchen and reefer container area

To be designed in consultation with established offshore catering
company.
u. ** Canteen
Catering facilities to cater to base personnel (3 meals a day)
12mX12m building with kitchen and food preparation area, seating
area, toilet and shower. 1 reefer container, 1 chiller container and 1
dry goods container for storage of food supplies.
v. Accommodation
46m X 14m double storey building with at least 20 rooms to house
senior executives to Oil and Gas standards and mess hall
No provision for personnel housing to enable local community to
provide accommodation
w. Recreation Facilities
- Football field with spectator facilities and night lighting
- Community centre with internet room, library, mini-mart,
games room
- Outdoor badminton / basketball courts
- Training and conference facilities
- Parking spaces
x. * Clinic
A container medical clinic for treatment of minor ailments or first line
stabilisation of more serious injuries prior to transfer to hospital.
There will also be an ambulance for transfer of patients to hospital as
necessary.
y. ** Power Building
8mX5m small building to accommodate connection with incoming
utilities.

III - 17
z. * Helipad
During construction, a Helipad for visual landing only will be provided
to facilitate inspections and visits by VIPs, dignitaries, customers, etc.
Will provide space for a permanent helipad with navigation aids and
fuel storage however, this will not be constructed if the SUAI airport
provides for it.
Footnotes for Facilities and Services
1) Refer to the technical section for more detailed description of each facility /
structure.
2) * indicates facilities that have changed from the kick-off meeting due to needs
of the base.
3) ** indicates new facilities not included in the kick-off meeting
3.2.3.3.
Port configuration and Capacity
Phase 1 of the masterplan from the technical study has been designed to support 2-4
PSCs in residence and 2 exploration drilling programs at any one time. The port and
berthing facilities have are multipurpose facilities designed for optimum flexibility.
a) 4 multipurpose berths (Shorebase berths).
This is the most flexible configuration. This is demonstrated in the diagram
below.
Figure III-3 : Multipurpose Jetty Configuration

This optimizes the use of the berthing for different sized vessels and varying
turnaround times. It ensures the base will be able to handle larger vessels
required to bring in bigger volumes of cargo (i.e. construction of undersea
piping, etc etc) while still keeping the flexibility to schedule supply boats and
especially in the event of unplanned and/or urgent boat calls (blowout or loss
of pressure, etc)

III - 18
The jetty will also contain bulk plant facilities to deliver cement and muds to
the supply vessels.
b) 2 X LCT ramps.
This is required during construction and is of fairly low cost. However, it will
continue to be operational for commercial use. It allows the import of
tracked and heavy vehicles as well as bulk and heavy cargo using comato
vehicles. It will continue to support the development of industry in and
around Suai and the southern regions.
With these facilities, the base has the flexibility to handle all PSC activity and
commercial cargo, dry bulk import and export and liquid storage cargo. The
theoretical maximum capacity for phase one is:
a) 3 PSCs (2 Production support and 1 Drilling support) in residence and
b) 200,000MT dry bulk cargo and
c) commercial and liquid storage cargo for all the Suai area.
3.2.4. Recommendation of Infrastructure Improvements

The project team set out to identify the following infrastructure in the southern
region:
-
Road Network
Airfield / Helipad
General Commercial Port
Industrial Estate
Medical facilities
Utilities
Telecommunications
Bulk Fuel Storage

III - 19
3.2.4.1. Observations
The project team made several visits to the Suai district, travelling by road from Dili
to Suai. The general observations are as follows:
3.2.4.1.1. Road Network
1. Dili to Suai
The road from Dili to Suai is hazardous and poorly maintained. The main types of
road available are asphalt, gravel and mud tracks, however the asphalt and gravel
roads are in bad condition with many potholes and uneven surfaces. The passage
through the mountainous regions is especially dangerous and many potential
impasses exist. The roads are barely wide enough for 2 way traffic. Bad weather and
landslides aggravate the situation. Along the plains and coastal regions the road
conditions improve, however, there are still many potholes and the roads are narrow.
The vehicles plying these routes are generally trucks (max 3-5MT) and 4X4 vehicles.
The road is unacceptable by Oil and Gas industry standards. It will not be used for
crew change.
Figure III-4 : Photos of Road Condition with potholes (Dili to Suai)

III - 20
Figure III-5 : Photos of road water damage(Dili to Suai)

2. From Suai Supply Base to Airfield, Suai city
The road connection from the Suai Supply Base site to the airfield and Suai city is
also poorly maintained. These are local roads, mainly gravel and mud paths with
some old asphalt roads. The nearer one goes to Suai city, the better the road
conditions are. However, potholes, uneven surfaces and water damage make these
roads still unacceptable by Oil and Gas standards. These connections are important
routes for crew transfer and helivac / medivac.
3. Suai Supply Base to Southern region
These roads are flatter in general as opposed to the road from Dili to Suai. However,
the condition is not much better than the Dili <-> Suai road. They are primarily
asphalt, gravel or mud tracks with many potholes and uneven surfaces. The roads
are narrow and can barely support 2 way traffic.

III - 21
3.2.4.1.2. Airfield
The team has surveyed the existing old airfield in the Suai area. The access to the site
is poor and the roads in bad condition. The airfield is not fenced off and no buildings
remain. In the immediate vicinity of the airfield there is some local habitation. The
airstrip is currently used as a playground for the children living around that area.
There is an old helipad within the airport.
We were unable to ascertain the strength of the runway and helipad or their ability
to support flight activities.
No other facilities were observed at the airfield.
The airport is currently not operational.
Figure III-6 : Photos of abandoned Suai Airport (cattle and children in background)

III - 22
Figure III-7 : Photos of abandoned Suai Airport (nearby buildings) and Helipad
3.2.4.1.3. General Commercial Port
There is currently no general commercial port available although the Government
has plans to develop one in the Suai Loro vicinity.
3.2.4.1.4. Industrial Estate
There is currently no industrial activities in or around Suai.
3.2.4.1.5. Medical Facilities
1. Clinics
The team has surveyed the medical facilities in and around the Suai area. There are
several clinics around the Suai area, either operated by the Ministry of Health or by
Private NGOs. These clinics generally do not have a doctor in attendance. They have
nurses and a dispensary and cater to minor ailments and injuries. The NGO operated

III - 23
clinics also offer immunization and anti-natal care. Ambulances are used to transfer
any patients that need a doctors attention to the hospital in Suai.
Figure III-8 : Clinics in Suai area

2. Hospital
The hospital in Suai is relatively new. It is less than 2 years old. It is clean and appears
well run. It has a staff strength of 74 (doctors, nurses, etc) not including several
Cuban doctors on attachment. The hospital operates an Accident and Emergency
room 24hrs and there is a doctor in attendance 24/7. Power is currently provided by
external generators but they expect to be connected to the power grid by 1Q 2011
and will keep the generators for backup / standby power. They are relatively self
sufficient, running their own laundry and kitchen services. Fuel and drugs are
supplied by the state and transported in from Dili. Industrial gas is provided by a
service provider in Dili. On top of the A&E facilities, the hospital has several
consultation rooms, an X-Ray room and an Operating Theatre. They have 24 beds
available for patients recovery. On the roster, they have several General
Practitioners and several specialists, including a Dermatologist. However, the
position for Surgeon is still open.

III - 24
Figure III-9 : Suai Hospital and facilities

3. Decompression Chamber
There is currently no decompression chamber available in Timor-Leste.

III - 25
3.2.4.1.6. Electricity / Power and Utilities

The electrical grid in the Suai area is still being developed. When the team was
surveying the Suai district, several areas were connected to the electrical grid, some
other areas had new electrical posts but the cables had yet to be installed, and some
areas did not appear to have access to electricity. The hospital at Suai is still in the
process of getting electricity from the power grid and this will be completed by 1Q
2011. The power project to establish a power plant in Betano, capacity 120MW, is
scheduled to go online by 3Q 2012. It is unclear when the power grid will link to Suai,
however the plan is caters for a sub-station at the Suai area with 10MW.
Water in the Suai area comes from mountain sources and the river. Limited water
piping is available and the condition of the water is inconsistent.
3.2.4.1.7. Telecommunications Voice / Data
The Suai City is connected with landlines for telephones with also Timor Telecom
infrastructure to support mobile phones. Internet access however is limited.
3.2.4.1.8. Bulk Fuel Storage
There is currently no facility in the Southern part of Timor-Leste to support bulk
importation and storage of diesel required by the Oil and Gas industry. Fuel is
transported from Dili on small tanker trucks (5,000 to 8,000 litres) over the
mountains. The route is hazardous and the trucks are driven at high speeds. Fuel
stations operated by a myriad of operators can be found scattered in the southern
area. The supply of fuel to these stations is not regular and as a result the stations
can find themselves empty and unable to sell fuel to customers. The fuel at these
stations is also of questionable quality, resulting in problems with newer fuel
injected engines. There are many small shops by the side of the road that sell fuel
out of plastic containers. There is no quality control nor are there any safety
procedures put in place.

III - 26
Figure III-10 : Fuel Tanker and fuel stop enroute to Suai
3.2.4.2. Recommendations from Infrastructure Survey

3.2.4.2.1. Road Network
A good road between Dili and Suai is absolutely critical to the success of the Suai
Supply Base project as well as the development program in the Southern regions.
This road will be the primary route for general commercial cargo that comes in
through Dili (both airfreight and seafreight). Personnel and expatriates coming in
through the international airport at Dili will also use this route. The road between
Dili and Suai needs to be all weather paved roads that allow prime movers with 20
trailers, bus and other passenger vehicles and passenger cars to ply this route with
relative ease.
Within the Suai area, the connections between the Supply Base, Suai city and the
Airport/Heliport need to be upgraded. This is the main local routes for crew change
and inter-modal connectivity for passenger and goods transport. This is also the main
route for medivac in the event of a medical emergency.
The southern regional roads for connection in the Suai Betano Beaco belt need to
be improved. To meet the needs of the Supply Base, most equipment and a large
amount of supplies will come in by ship. However, the ability to bring in heavy
equipment and supplies into the area is a great enabler to improving and developing
the infrastructure. As economic activity accelerates in the south, the road
infrastructure can then expand outwards from Suai.

III - 27
3.2.4.2.2. Airfield
For the Oil and Gas industry, the availability of air transportation is extremely vital
in maintaining the link between the remote drilling rig and their onshore base for
crew change and all emergency evacuation.
The airport needs to upgraded to Oil and Gas standards. There is a need for basic
airport management buildings and services. This includes 2 or 3 small hangars for
helicopters and any small aircraft that will stay overnight and a small airport terminal
for the administrative services. The airfield needs to be fenced up and contained to
prevent locals and livestock from wandering onto the tarmac. The necessary safety
distances for habitation from the runway need to be implemented and the villagers
relocated if necessary. The access road should be improved to connect to Suai town
and the Suai Supply base. Electrical substation and utilities need to be constructed
for the Air terminal. The necessary fire and safety facilities (water holding tank, fire
engine/station, etc) also need to be established.
The following are the basic requirements for an airport to support the Oil and Gas
industry. This would be able to service the Oil and Gas industry needs for crew
change. However, since the airfield is to be upgraded, it should be upgraded directly
to a regional airport, able to service regional destinations for commercial cargo and
passenger traffic.
i.
ii.
iii.
iv.
Aerodrome Reference
Code Number : 2 and Code Letter : C
Aircraft type
DHC 8-300, 50 seater with option to be upgraded
Runway
1.6km X 30m, CAN-PCN determination Code : R, to be extended in
future to 2,500m if required.
Runway Strip
75m left side and 75m right side from the centre line

III - 28
v.
vi.
vii.
Navigation System
Instrument landing system and precision approach path indicator as a
visual aid.
Night Landing
Runway and apron lights
Others
Fire fighting truck and facilities on site.
Once this airfield is available, it will be able to support the transfer of personnel to
and from the PSC facilities both at the Suai supply base and offshore. Crew change
will be by helicopter from the rig to the Suai airport, and then onwards to Dili or
Darwin by helicopter/plane/road.
The development of the airfield will also attract more investment opportunities into
the Southern regions of Timor-Leste. It will drastically reduce the commute time
between Dili and Suai, from 6-8 hours by vehicle down to 40 minutes by air transport.
The Oil and Gas industry will be the enabler, however all subsequent economic
activity will benefit. It will improve the accessibility of the south and open up this
area for more trade and tourism.
3.2.4.2.3. Helipad
It is a critical requirement for offshore drilling to have access to medivac facilities. To
this end, the helipad at the Suai airport also needs to be repaired. The main routes
for helicopter transport are from Dili to Suai and also from Suai to the offshore rigs.
This would likely be based out of the Suai airport.
There is an immediate need for a helipad at Suai. During construction, a helipad will
be built at the Suai supply base. This will be a helipad for visual landing and have day
capability only. There will be no facilities for maintenance or refueling. This helipad is
intended only to serve as air transport from Dili to Suai for officials, VIPs, customers
and management visits.

III - 29
3.2.4.2.4. General Commercial Port

There is currently no general commercial port in the southern region. The
Government has intention to build a general commercial port at the Suai Loro
vicinity. It is the opinion of this project team that there is no necessity for 2 port
facilities servicing Suai and the south of Timor-Leste. The projected volume of
commercial cargo does not justify the infrastructure costs of building a dedicated
commercial port that operate year round in this region.
The need for a Oil and Gas Logistics Supply Base at this point in time is more
apparent. There is offshore Oil and Gas activity in TLEA and JPDA. However, these
activities alone cannot justify the capital expenditure required to build a supply base.
Oil and Gas logistics activities are heavily dependent on the oil companies and the
volumes fluctuate at different stages of the field development life cycle. This makes
it an unreliable source of revenue to anchor any business feasibility. General
commercial cargo on the other hand tends to be consistent in volume and will show
growth over a period of time in line with economic activity stimulated by the port
itself. This is a more reliable source of revenue.
We strongly recommend that all port activities for the South of Timor-Leste be
centralized at the Suai Supply Base.
3.2.4.2.5. Industrial Estate
In order to stimulate cargo growth, the Government of Timor-Leste needs to develop
an industrial estate adjacent to the Suai Supply Base to enable entrepreneurs to
make investments in manufacturing. This will ensure two way cargo flow, i.e. import
of raw material and export of finished products. The Government should consider
whether to grant bonded status to this industrial estate.
All modern port developments are coupled with an industrial hinterland. The
development and sale of the industrial plots will allow the port developer to recover
the capital investment of the port infrastructure and will provide cargo volumes.

III - 30
3.2.4.2.6. Intermodal Connectivity

With the development of 1) the road transport system from Dili to Suai and from
Suai outwards, 2) the Suai airport and heliport and 3) the port facilities available at
Suai Supply Base, Suai city then becomes an important hub for inter-modal
integration for passenger and goods and supplies. The last remaining link is a
shipping lane from Suai to an international hub.
From the start of the construction of the Suai Supply Base, it is recommended that
the EastLog team operate an LCT service between Lamongan and Suai. This should
be a regular vessel call (2,000 DWT), once per month. This service will allow the
project team to bring in supplies, equipment and materials not readily available in
Timor-Leste. This will also allow the service providers who already have a hub in
Lamongan, to mobilise and demobilise at Suai. The current projected activity at Suai
will not entice the service companies to setup up a permanent base at Suai.
As an added benefit, this will provide any developing industry in the Suai area with
access to a regional and international supply route, both for import of supplies as
well as for export of products. The LCT can also be used to carry cement,
construction material, equipment, etc to support any projects in the south.
Gradually the industry and projects in and around Suai will get used to the idea of
having access to a global supply route by sea and benefit from it. The LCT will be
capable of running 5 trips in 2 months. Once we reach this level of activity, it would
be attractive enough for a shipping company to start running a line through Suai.
3.2.4.2.7. Medical facilities
The Suai hospital has the manpower and facilities to meet the needs of the
developing industries in the Suai area. However, it is recommended that the hospital
administration review their capabilities in terms of handling industrial accidents and
drilling related injuries (i.e. trauma, limb injuries, burns and chemical burns, etc) and
ensure that it has the skillsets necessary to meet the short to medium term
challenges facing the economic development in the Suai area. One possibility is to
work with a PSC to fund the development and maintenance of this capability on a
longterm basis in the Suai Hospital.

III - 31
The Suai supply base will thus only have a small clinic onsite for minor ailments and
patient stabilization in case of an emergency. This clinic can be manned by a Suai
supply base staff or by staff from the Suai hospital. It is recommended that the
hospital in Suai be able to provide the necessary manpower to staff the clinic at Suai.
This will be more efficient and economical as they are best able to find, train and
retain medical personnel.
Timor-Leste does not at the current moment have a decompression chamber at any
of its facilities. It is the opinion of this team that the purchase and installation of a
decompression chamber would be premature at this stage. It is best to review this
situation in 3 to 5 years.
3.2.4.2.8. Utilities
The Suai Supply Base as well as the Airstrip will need electrical substations to provide
their electrical supply. Both will also need backup power supply through generators
as they are required to have 24/7 availability. The electrical consumption for the
Supply Base is estimated at 120,000 kWh/mnth. During the construction of the Suai
Supply Base, generators will be brought in to provide the power required by the
project team and equipment. These generators will then transition into operations
and provide the electrical needs of the base when the base is commissioned. Once
power from the grid is made available to the Supply Base, the generators will then be
used as backup power supply. The current schedule for the power project in TimorLeste will provide for a 10MW sub-station in Suai to supply the Suai area.
In the short term there is no reliable source that can provide stable and good quality
fresh water to the Suai Supply Base. As such, the Supply Base will provide for a
reverse osmosis system that will provide a stable and good supply of fresh water.
The consumption of water at the Suai Supply Base is estimated at 100m3 per day.

III - 32
3.2.4.2.9. Telecommunications
A key component of modern day operational efficiency is the ability to communicate
both voice and data quickly and reliably. For the Suai supply base to be able to
operate and deliver a globally accepted standard of service and quality, the
telecommunications infrastructure must be available both for the base use as well as
for its customers. If at the time of commissioning of the base, the
telecommunications infrastructure from Timor telecoms is available, then this will be
used. If not, the Suai Supply Base will fall back on emmersat technology to provide
satellite broadband link for voice / data.
3.2.4.2.10. Bulk Fuel Storage
There is no existing bulk storage of fuels in Timor-Leste South. The Suai Supply Base
will need to provide for adequate storage to ensure self sufficiency of fuel for the
base as well as in support of its customers. The liquid storage facilities at the Suai
supply base can then also be used to support the southern region as the region
develops and grows. Fuel will no longer need to be trucked long distances over
hazardous routes. The ease of access to a stable supply of good quality fuel will
attract more businesses to establish reputable petrol distribution networks and also
facilitate the growth of industry in the area. The liquid storage at the Suai supply
base should also cater for aviation fuel. It will then also be able to support the
establishment of the airport and heliport. These services from the supply base
should be established as early as is possible to facilitate the development of the
region as well as any other projects in the area.
3.2.5. Conclusions from User Survey and Infrastructure Review

After conducting the user interviews, and general survey of Suai and Dili, the project
team has been able to gather feedback from the users on the Suai Supply Base to be
able to feed into the scope of the base as well as the revenue model. The visits have
provided insight into the readiness of the surrounding infrastructure as well as
general economy in the Suai area. The following are the main conclusions from the
commercial study:

III - 33
1) Oil and Gas logistics support activity forecast is limited to

a. Bayu Udan and Kitan production support
b. Sunrise development and production when this recommences
c. New acreage release in 2011
2) The PSCs will be willing to use Suai Supply Base if the following is available:
a. Full range of facilities and services are available.
b. The Oil and Gas standard for quality and HSE are strictly adhered to.
c. The base is operated by a credible entity with proven track record in
running multi-user integrated logistics supply base and certified /
approved by the global Oil and Gas players.
3) The service providers are unlikely to set up permanent base at Suai because
of the lack of critical mass and projected activity.
4) The facilities and services proposed at the kick-off meeting have been
validated by the results of this study, with minor changes. More details can
be found in paragraph 2.2 of this section.
5) The infrastructure in and around the Suai Supply Base site is in poor condition.
The following need urgent upgrading:
a. All weather paved road network a vital necessity for
i. SSB <-> Suai City <-> Suai Airport
ii. Suai City <-> Dili
iii. Suai City <-> Betano <-> Beaco
b. 24/7 Airport to Oil and Gas Standards
c. Skills and manpower availability in the Suai area (more details in the
Labour report) for the Suai Supply Base as well as PSCs and service
providers.
6) There is not enough commercial activity in and around Suai to justify 2 port
facilities. There is impetus from the Oil and Gas industry to build a Supply
Base to support their offshore drilling activities. All port activities should then
be consolidated within this Port facility for economy of scale. Integration with
local infrastructure (power, utilities, roads, telecommunications, etc) will also
be easier.

III - 34
7) Suai is poised to play a key role in the development of the Southern region of
Timor-Leste. It will be a key hub for intermodal connectivity of passenger and
goods transport. Key to this success is:
o Road connectivity to Dili
o Air connectivity to Dili and regional for passengers and goods.
o Sea connectivity to an international hub with a regular LCT run to
Lamongan in the short term.
8) The Government of Timor-Leste should develop an industrial estate adjacent
to the Suai Supply Base. Secure the land for the port expansion and industrial
estate early. The port facilities at the Suai Supply Base will attract business to
setup to take advantage of the benefits from the reduced logistics costs and
improved infrastructure. The industrial activity at the industrial estate will
generate increased cargo volumes for the Suai Supply Base.

III - 35
3.4. Labour Report for Suai Supply Base

3.4.1. Introduction
After conducting the technical survey and the commercial study for the proposed
Suai Supply Base location, the team came to the following conclusions:
1) It is technically feasible to build a Multi-User Integrated Supply Base at
the site allocated by the Timor-Leste government, provide that a
breakwater is constructed to shelter the port facilities from inclement
weather at certain times of the year.
2) The infrastructure in and around Suai need some improvement before it
is able to support the base, however, during the existence of the port
facilities at the Suai Supply Base would actually act as a catalyst to
stimulate and accelerate such infrastructure and economic development
for the south.
3) The Suai area is ideally suited to support drilling activity in the TLEA and
JPDA regions because of its proximity. Supply vessels using Suai will have
significant benefits in terms of turnaround time and fuel savings as
opposed to using Dili or Darwin. However, because of its remote location,
the base itself will need to be able to provide all the basic services
required by the PSCs if it is to retain them.
The study team then turned its attention to the manpower resources required in
light of the above conclusions. With this in mind, the team also did an initial study of
the skilled labour available in Timor-Leste.
3.4.2. Organisation Chart

The Suai Supply Base will be staffed with personnel to support the facilities and
services at the base. It is assumed that the base will support 2 full time PSCs in
residence. This structure will also allow it to support 2 3 exploration drilling
programs at the any one time and any potential container cargo, liquid cargo and dry
bulk.
The project team has based the structure and skills requirements on the operational
template from Lamongan Shorebase. As this is an operational multi user integrated
supply base, it is ideally suited for the Suai Supply Base. It will also facilitate preoperational training of the Suai Supply Base staff and on the job training and

III - 39
exchange programs between the two bases to enhance the operational readiness of
the newly setup Suai team. The Suai team will be staffed with a combination of
expatriates and locals. As far as possible, where the skills are available locally, the
positions will be filled with Timor-Leste locals. If adequate skill levels are not
available in Timor-Leste, then the positions will be filled with workers from Indonesia,
Philipines, Singapore or any ASEAN nation. If the right person cannot be found within
the ASEAN region, then it will be filled with an international expatriate.
Figure III-11 : Suai Supply Base Organisation Structure

The figure above shows the organization chart for the Suai Supply Base at a
department level.

III - 40
Figure III 12 : Suai Supply Base Operations Team

The operations team is the team that will ensure efficient running of both at the Port
/ Jetty as well as at the Yard and Warehouse buildings. Both these facilities will
operate 24/7. As such, the yard and jetty crews will operate with 3 gangs on rotation
(2 weeks day shift, 2 weeks night shift and 2 weeks off).
Figure III 13 : Suai Supply Base Support Teams

III - 41
The base will need several support functions to be filled to ensure its continuous
operational readiness. The QHSE team will be responsible for all Health, Safety and
Quality matters on the base. The maintenance team will keep the base and all
equipment serviceable and operational. Finally, the security team will provide base
security round the clock. Like the Port and Yard crews, these crews will also operate
24/7.
Figure III 14 : Suai Supply Base Business Support Services Team

The Business Support Services department is responsible for providing the necessary
business and administrative services to the PSCs in residence. This team will operate
only during office hours.

III - 42
Figure III 15 : Suai Supply Base Sales, Finance and Admin teams
The sales team is responsible for maintaining communications with the customer
and ensuring the base facilities and services are always one step ahead of the
customers needs. Finally, the base will need its Finance and HR departments. All
these 3 departments will operate during normal office hours.

III - 43
The HR structure provides for 6 grades for full time employees.

a) Grade 3 Manager. Responsible for a department and/or team. Graduate
with some experience or a Non-graduate with significant experience.
b) Grade 4 Assistant Manager / Executive. Graduate with some experience of
Non-graduate with significant experience.
c) Grade 5 Supervisor / Officer / Coordinator. 1) Responsible for a section /
crew or 2) Professional with technical skills or 3) Highly specific or niche
skillset. Graduate or Diploma holder with relevant skills for the appointment.
d) Grade 6 Assistant Supervisor / Administrator / Specialist. 1) Crew member
with leadership potential to cover in the absence of the Supervisor, 2)
Administrative personnel, 3) Position with specific vocational skills required.
Diploma holder, high school or vocational training.
e) Grade 7 General worker, High school or lower
f) Grade 8 General worker, Junior High school or lower
3
4
3
30
78
18
28
7
45
49
10 13 31
6
3
5
TOTAL 210
4
4
2
TOTAL
1
30
Grade 8
Grade 5
13
9
2
3
3
1
Grade 7
2
2
1
1
1
1
1
1
1
Grade 6
Management
Operations
Maintenance
Quality, Health, Safety and Environment
Security
Business Support Services
Finance
Human Resources
Sales
Grade 4
Department
Grade 3
The table below shows a breakdown by department and grade level for the staff at
the base.
Table III 2 : Breakdown of Suai Supply Base employees by Department and Grade
Level

III - 44
3.4.3. Labour Report

The table below lists the general requirements for each position in the organization
chart:
No
Position
Base General
Manager (BGM)
Requirements
Master degree or Bachelors Degree in Industrial Engineering (with
experiences) or Oil&Gas engineering (with experience) (experience in
either one)
At least 10 years experience in logistics, project explorationproduction and development (preferably in the oil and gas industry)
Offshore experience is mandatory
Good supervisory and interpersonal skills
Base Assistant
General Manager
Excellent command of both spoken & written English

Master degree or Bachelors Degree in Industrial Engineering (with
experiences) or Oil&Gas engineering (with experience)
At least 8 years experience in logistics, project explorationproduction and development (preferably in the oil and gas industry)
Offshore experience is mandatory
Excellent command of both spoken & written English
Able to speak Indonesian will be a plus
BGM secretary
Diploma degree
Advanced level knowledge of word processing office, electronic mail
& calendar software application
Considerable knowledge of office procedures & practice of correct
punctuation, spelling & grammatical usage
Experience in filing, indexing & cross referencing
Multi tasking & work process effectively under pressure with
frequent interruption
Establish and maintain cooperative and effective relationships with
other departments & those contacted in the course of work
Excellent command of both spoken and written English

III - 45
No
Position
Operation Manager
Requirements
Bachelors Degree in Industrial Engineering or Oil&Gas Engineering
Between 10 and 15 years experience in logistics, port activities,
project exploration-production and development (preferably in oil and
gas industry), Mining
Good command of both spoken and written English
Logistics supervisor
HSE diploma / awareness

Bachelors Degree in Engineering ( Industry, Mechanical or
Instrument ) or Oil&Gas industry
At least 5-8 years experience in logistics, project explorationproduction and development (preferably in oil and gas industry)
If no Bachelors degree, minimum of 12 years of experience in O&G
logistics operations, heavy liftings, rig move (on/offshore)
Good knowledge required in lifting gear and drilling Material
- Cranes, trucks and forklift knowledge
- Heavy lifting competences
- Drilling material and equipments knowledge
Yard Supervisor
Vocational certificate
5 years experience in transport handling / coordination related to
the shipping industry
On/Offshore experience is preferable
Computer basic knowledge (office suite : word/Excell/powerpoint)
Warehouse
assistant /
Fuel Storage
Technician
Senior High School or Diploma degree

Experience as a Material man / Store Keeper
English
Computer basic knowledge (office suite : word/Excell/powerpoint)
Strongly organized

III - 46
No
Position
Resources assistant
Requirements
Senior High School or Diploma degree
Good knowledge of heavy equipment and overall maintenance
Good knowledge of both spoken and written English
Good knowledge and operating computer (Microsoft Office)
Port master
10
Assistant Port
Master
Bachelors Degree in ANT-III /Deck officer class III

At least 7-10 years experience in logistics, project explorationproduction and development (preferably in oil and gas industry) /
Mining or jetty operation for supply/cargo vessel or multi purpose
barge
Good knowledge of port & marine regulations & practices.
- SOLAS knowledge
- Marpol knowledge
- GMDSS knowledge
- Radio telecommunication (HF / VHF) competences
- Beaufort scale / weather forecast analysis / marine map knowledge
- Cargo (un)loading : Fuel, water, Bulk, Containers, CCU, Tubular
- ISPS knowledge
Good command of spoken and written English
Familiar with MS Office
Safety Leadership knowledge
Bachelors Degree or ANT-III (Deck Class III)
At least 3 years experience in logistics or project explorationproduction and development (preferably in oil and gas industry) and
Mining or jetty operation for supply vessels or as Marine officer on
boardship
Minimum requirement in Marine knowledge
Good knowledge on lifting gear, lifting heavy equipments and lifting
operation rules

III - 47
No
11
Position
Radio Operator
Requirements
Minimum Senior High School Degree
Holding the Radio certificate minimum SOU
Good knowledge of Radio Regulation and technical principle
Minimum knowledge of technical radio equipment ( VHF & HF)
Have knowledge of computer
12
Port Admin
Minimum High School or experience in administration (filing,

inventory, organization,)
Very good organization skill
Able to operate MS office / Internet
13
Stevedore
Offshore experience is preferable
14
Yard Crew
Dependable & organized
15
Foreman
Offshore experience is preferable

III - 48
No
Position
16
Maintenance
Manager
Requirements
Master degree or Bachelors Degree in Industrial Engineering
Between 10 and 15 years experience in maintenance and
construction site
HSE awareness
17
Maintenance
Supervisor
Bachelor Degree in Engineering

Strong Communication Skills must be able to speak, read, write
and understand the primary language(s) used in the workplace,
ensuring good information flow
Leadership, Delegation, Motivation and Team Building skills
Able to do management skills - training, and the development of
each associate according to their potential for advancement
Strong technical skills
18
Electrical engineer
Coursework in electrical engineering

5 years in experience in electrical engineering
Able to work independently or part as a team
Capacity of accurate & careful work
19
Mechanical
Engineer
Bachelor degree of mechanical engineer

Understanding of preventative maintenance
Understanding of acuity - the control of expenses/costs
20
Carpenter
Able to work independently or part as a team
21
IT officer
Bachelor degree in IT (Networking or development)

Knowledge in relational database management systems
Basic PC Troubleshooting
Basic Networking
good relationship with the person (staff / customer) interrelation
skill

III - 49
No
Position
22
Rev Osm. Spv
Requirements
Diploma or Bachelor degree in Chemical / Engineering
5 years of experience in RO operations
HSE awareness
Basic computer knowledge (Office suite)
23
Rev Osm operator
Senior High school

HSE awareness
24
25
Maint. General
Workers /
Elect & Mech
Teams
Team player
QHSE manager
Bachelors Degree in Health, Safety & Environmental or Oil&Gas

engineering or Mechanical Engineering
Junior High school as minimum requirement
Experience in Management and Quality program

Understand HSE Management System standard in the national,
international and or other standards issued by other institution like
ISO, OSHA, NIOSH, NFPA, SNI, etc
Good leadership, communication, and trainer
Minimum 10 year working and manage QHSE matters in industrial
related to oil company activity
Can create a systematic procedure achieve company objectives and
programs
26
QHSE Officer

Minimum requirement in Quality program development and
management (external training)
Diploma in Health, Safety & Environmental or Oil&Gas/mining
engineering, or Chemical Engineering
Minimum 5 year working and manage HSE or Quality matters in
industrial related to oil company activity
Have good relationship and partnership with all colleague and or
other departments

III - 50
No
27
Position
Medic
Requirements
Diploma in Health, Safety & Environmental
Hold license in first aid & artificial resuscitation
Good communication skill
28
Security Manager
10 year working experience in related field

Able to do Security training management
ISPS knowledge / PFSO diploma will be a plus
Military Intelligent strategic knowledge
Good knowledge of computer and able to operate MS and internet
29
Security Supervisor
Minimum 5 years working experience in related field

Familiar with ISPS Code
Good knowledge of computer and able to operate MS and internet
Able to communicate effectively in English
30
Security Officer
Minimum 5 years working experience in related field

Fire Drill
31
Finance Manager
Minimum Bachelors degree in Accounting

Minimum 3 years in same position or 10 years in accounting,
finance, auditing field
Good education and fully conversant with finance, accounting,
auditing and tax duties.
Strong willingness to control company assets
32
Tax officer
Minimum diploma degree in tax

Minimum 3 years in accounting and Taxation Section
Able to work under pressure generated from deadline

III - 51
No
33
Position
Invoice Officer
Requirements
Minimum Bachelors degree in Accounting
Minimum 3 years in accounting and Account Receivable Section
Accounting/finance skills, specially in account receivable section
Good interpersonal and communication skill
Able to work under pressure generated from deadline
34
Pay roll Officer /
Minimum 2 years working experiences
GL Assistant /
Computer literate (e.g. MS Word, MS Excel, Microsoft Outlook)
AR/AP Assistant
Conversant in both spoken and written English

Ability to work in an effective and timely manner
35
36
HR Manager
HR assistant /
Training Officer
37
BSS Manager
Analytical and numerical skills

Accounting experience or training a bonus
Bachelor Degree in Public or Business Administration, Psychology or
related curriculum
Minimum 10 years working experiences in the same position which
includes in depth experience in public contact & communication
Able to work well in teams, plans, organize, lead & control
departmental activity
Familiar with expatriate documentation & permit process
Effective in complaint handling
Certificate/Diploma in Human Resources
Management/Development
Patience to listen and receptive to suggestions
Minimum 2 years working experiences in the same position
Minimum Bachelors degree in Business Administration or related
curriculum
Able to work well in teams, plans, organize, lead & control
departmental activity
Effective in complaint handling
Good leadership, communication, and trainer

III - 52
No
Position
38
Base Boss /
Customer
Liaison Spec /
Requirements
Minimum diploma
Computer literate (e.g. MS Word, MS Excel, Microsoft Outlook)
Conversant in both spoken and written English
Ability to work in an effective and timely manner
Good interpersonal and communication skill
good relationship with the person (staff / customer) interrelation
skill
39
Storekeeper /
Minimum Junior high School
Janitor /
Relevant vocational certificate (as necessary)
Office boy /
Able to work in a team as well as independantly
Drivers
40
Catering
Supervisor /
Catering
Assistant
Vocational certification (catering or culinary)
Note: It is expected that most positions will be filled by Timor-Leste nationals, who
are able to communicate in Tetum, Portuguese and Indonesian. For not Timor-Leste
nationals, the ability to speak Tetum, Portuguese and/or Indonesian will be a plus.

III - 53
3.4.4. Skills Development Plan

3.4.4.1.
Survey in Timor-Leste
The project team visited the University in Dili and a Vocational centre to assess the
availability of skilled manpower for the staffing of the Suai Supply base. Although
the vocational manpower with the relevant skillsets is not readily available in TimorLeste today, the vocational centre has the capability to conduct vocational training in
the specific areas required by the Suai Supply Base. These areas include rigging,
welding, equipment maintenance, etc. This approach, in conjunction with an on-thejob training (OJT) program and supervisory attachment program between the
Lamongan Shorebase and the Suai Supply Base would be the best strategy to ensure
the Suai Supply Base has the necessary skillsets from day one of operations.
Figure III-16 : Photos of Vocational Training Institute

III - 54
3.4.4.2.
Government Programs
It must be noted that the Government of Timor-Leste has demonstrated a strong

commitment to human capital. The Government of Timor-Leste has scholarship
programs for under graduate studies to overseas universities as part of its program
to upgrade the education level and skills of its population. It has set up a Human
Capital Development Fund (US$25Million) which is meant to support Human
Resource training projects and programs in strategic development sectors. This fund
is to be administered by the National Development Agency and a large part has been
set aside for scholarships for Tertiary education.
There are similarly many programs to help Timor-Leste upgrade the vocational skill
level of its workforce. However, in its efforts to provide job skills for its unemployed
youth, the vocational programs have been focused on infrastructure development
skills, like carpentry, masonry, agriculture, healthcare, plumbing, electricians, etc,
which are not directly relevant to the Oil and Gas industry. No vocational training for
oil field shorebase or logistics activities exists in Timor-Leste today. This is
understandably a chicken and egg situation.
3.4.4.3.
Suai Supply Base Needs
For the Suai Supply Base to be operationally ready to international standards from
day 1, it requires more than just the construction of the facilities and structures. The
right manpower needs to be trained and in place as well as the operating procedures
need to be setup. This softer side of the project should not be underestimated.
Whilst the necessary staff can be trained, all Oil and Gas companies require senior
positions to be filled by people with at least 5 to 10 years oil and gas relevant
experience. This will not be available in Timor-Leste. To meet these requirements,
the Government of Timor-Leste needs to enter into a Management Agreement with
a company experienced in managing multi-user supply base such at Eastlog Holding
Pte Ltd to provide the necessary credibility and management team in the initial years
to allow the Suai Supply Base personnel to acquire experience.
There is significant advantage to Eastlog taking on this project. Apart from the
obvious experience and capabilities advantages, there are also benefits on the softer
side of setting up the Suai Supply Base. Both bases will be multi-user integrated

III - 55
supply bases and their operational templates will be very similar. The Lamongan
Shorebase has an established quality program and has already achieved ISO 9001,
ISO 14001-2004, OHSAS 18001-1999 and ISPS Code. They are an approved supply
base for many International O&G companies. With the similarities in the operational
templates, the Standard Operation Procedures from Lamongan Shorebase can be
ported across with relative ease. This will significantly reduce the time and effort
required to develop the documentation and operating procedure at the Suai Supply
Base. The experience and credibility in Lamongan Shorebase will also greatly assist
the Suai Supply Base in quickly establishing its credibility and obtaining the necessary
certifications.
The other major advantage is in the manpower and skills development for the Suai
Supply Base team. The Lamongan Shorebase is an operational multi-user integrated
supply base. There are many synergies that can be tapped on to assist Suai Supply
Base in their skills development. Most importantly, there exists a pool of skilled and
trained resources available at Lamongan for exchange programs and attachments.
There is also an operational base with standard operating procedures in place
available for any on-the-job training. Finally, the pool of resources available at
Lamongan also mitigates the risk of the shortage of such manpower or skills in Suai
at the onset of operations.
3.4.4.4.
Strategy for Human Capital Development
It is recommended that the Government of Timor-Leste set aside a separate budget

and appoint Eastlog to establish a Skills Development Program over the next 2 years.
The program should have a different approach for the different levels of personnel
required to be trained. The Suai Supply Base will effectively launch up to 100
personnel into the Oil and Gas industry with another 100 performing general work
(e.g. clerical, finance, security, etc)
Therefore, there needs to be a multi-pronged approach.
1) Management Program
Select up to 3 candidates for each position. These candidates will be sent to
Lamongan Shorebase for training and to get some experience. All such
management trainees will be provided with a general Supply Base orientation
program before being attached to work in their relevant fields. Additionally,
they will attend certification courses throughout their first 12 month stint. At
the 6 and 12 month periods, they will undergo evaluation and grading by the

III - 56
independent 3rd party evaluators. The candidates are required to pass this
evaluation to continue on to the second 12 months of On-The-Job training. At
the end of the training program, there will be further grading by the
independent 3rd party evaluators. The best candidate will assume the
managerial role with the others taking roles as assistant managers or
supervisors.
2) Trade Program
There will be a large number of personnel that would need vocational
training (i.e. riggers, welders, crane and forklift operators, mechanics,
electricians, etc). It is recommended that skills development program
incorporate working with local vocational institutes to establish a syllabus for
such training. The vocational training can thus be completed locally in TimorLeste, with skilled staff thus being made available to other industries or Oil
and Gas players. Selected graduates will then be provided additional training
to prepare them for the Oil and Gas industry standards (process
documentation, HSE as well as operating to established standards). In the 6
months prior to commencement of operations, they will attend training at
the suai Training centre by the Eastlog team.
3) Outsourced
Some skills are specialized and need dedicated external training. For example,
HSE manager, the relevant management trainee needs to be sent to
universities outside Timor-Leste to attend the relevant undergraduate course.
Once complete, they can then attend OJT at Suai. In the meantime, such roles
need to be filled by expatriates or as part of the Management agreement.
Additionally, select members from the management trainee program or trade
program will be sent for specialized training and certifications (oil spill
response, hazardous goods management, specific equipment maintenance
courses by vendors, sea survival, HUET, etc).
4) Suai training centre
Six months before commencement of operations, the EastLog team can set
up a small training centre at the Suai Supply Base for locals to train them on
general skills or certification. This approach has several advantages:
- Commissioning and handover from equipment vendors
- On the job experience in a controlled environment
- Bring the team together for the first time

III - 57
3.5. Financial Report for Suai Supply Base

3.5.1. Introduction
At this point in the study, we have a layout and design for the base, a list of the
facilities and services required together with infrastructure improvements needed
and finally an understanding of the manpower challenges and organization structure.
This section draws from the conclusions above and looks at the financial health of
the Suai Supply Base.
3.5.2. Capital Expenditure

The capital expenditure for the project can be divided into two categories. The first is
that for infrastructure items while the second is for operating assets (i.e. cranes,
vehicles, etc).

III - 58
For infrastructure Capex, we first did a calculation using the optimal pricing for all
equipment, materials and services (best price available in Indonesia or Timor-Leste).
No
Description
1
2
Breakwater
Earthworks
3
4
5
6
Cost (US$)
Depreciation (Yrs)
176,000,000
12,000,000
20
20

11,500,000
31,000,000
20
20
Consultants fee
36,000,000
6,662,500
20
20
TOTAL
273,162,500
Table III 3 : Infrastructure Capex International / Domestic Pricing

We then did the same calculations using local Timor-Leste equipment and materials
wherever possible.
No
Description
Breakwater
2
3
Cost (US$)
Depreciation (Yrs)
225,000,000
20
Earthworks
15,000,000
11,500,000
20
20
4
5

40,000,000
47,000,000
20
20
Consultants fee
8,462,500
20
TOTAL
346,962,500
Table III - 4 : Infrastructure Capex - Domestic Only

As was apparent during the survey of materials and contractors in Timor-Leste, the
local prices are very high in relation to the Indonesian prices, even after factoring in
the cost of transportation. Unless otherwise stated, all subsequent financial
modeling in this section assumes the optimal costing for infrastructure capex.

III - 59
The Suai Supply Base will also need the acquisition of all the equipment for use at
the base. The following is summary of the cost of Operating assets Capex.
No
Description
Unit
Cost/Unit
(US$)
Total Cost
(US$)
Depreciation
(Yr)
Crane 150 MT
1,700,000
1,700,000
10
2
3
Crane 50 MT
Slings and lifting gear
1
1
800,000
500,000
800,000
500,000
10
2
4
5
Primemover + Trailer
Forklift 5 MT
2
2
150,000
50,000
300,000
100,000
5
10
6
7
Forklift 3 MT
Forklift Maniscopic
2
1
40,000
100,000
80,000
100,000
10
10
8
9
Vehicle (4WD/Passenger/Security)
Security Equipment (CCTV, etc)
10
1
50,000
75,000
500,000
75,000
5
5
1 set
1
200,000
200,000
200,000
200,000
10
2
10
11
Navigation Aid / Equipment

IT System
12
13
Oilspill Eqt
Maint & Fabrication eqt
1
1
1,000,000
800,000
1,000,000
800,000
10
10
14
15
Communications
Harbour Tug
1
1
500,000
2,500,000
500,000
2,500,000
2
10
16
17
Knowhow Licence Fee

Others
1
1
2,000,000
1,500,000
2,000,000
1,500,000
10
5
TOTAL
12,855,000
Table III - 5 : Operating Assets Capex
3.5.3. Operating Expenditure

The analysis of operating expenditure for the proposed setup of the Suai Supply base
takes into consideration the fixed costs required to run the base 24/7. The proposed
organization chart in the previous section is adopted and the estimated salaries are
based on interviews with different contractors and agencies currently operating in
Timor-Leste. The personnel expenses assume that as much as possible, Timor-Leste
staff are employed at the Base.

III - 60
However, it will be difficult to find suitable individuals resident in Timor-Leste with

the requisite skills and experience to fill many of the management and senior
management positions. It will also be very difficult to attract them to move to TimorLeste fulltime for the scale of the Suai Supply base. It is also a requirement from the
Oil and Gas industry customers to require at least 5 years experience for managerial
staff. It is typical in such cases and in the industry to engage an external party to
provide the experience and credibility required to make the Suai Supply base a
success. We have thus included in the operating expense a management fee
structure for this external team. This party will provide management credibility,
audit, review and guidance to the Suai Supply Base. The fee is structured with a fixed
component (to cover time and expenses for their management team throughout the
year) and a variable component (as a % of total revenue).
Description
Mnthly
Yearly
Remarks
Personnel Expense
US$270,438
US$3,242,250
Salaries for 210 staff, allowances,

uniforms and PPE.
Operating Expense
US$268,768
US$3,225,214
Business Expense
US$106,688
US$1,280,250
Lease/Rental, insurance, repair &

maintenance and fuel cost to run
generators.
Professional fees, travel, training and
community development, Outsourced
fixed management fee.
TOTAL Opex
US$645,893
US$7,750,714
Table III - 6 : Operating Expenses
3.5.4. Government Support

Strong political will and government support for the project is crucial to the smooth
completion of the EPC project and also for the commercial success of the Suai Supply
Base. Apart from general support provided in government communiqus and when
engaging with the Oil and Gas industry, the following areas need government
assistance:
a. Upgrade of road connection between Suai and Dili for passenger and
container traffic.
b. Upgrade of Suai airport at least to Oil and Gas specifications for passenger
plane (see commercial section for specifications)

III - 61
c. Helipad at airport is upgraded and helicraft based out of the Suai airport for
crew change and helivac.
d. Intermodal connectivity of the Suai Supply Base with the Suai Airport and
Suai City.
e. LCT / Ship line with regular run between Suai and Lamongan.
f. New acreage release in 4Q 2011 for the remaining lots in TLEA and JPDA.
g. Mandate the usage of Suai Supply Base for all Oil and Gas activities in TLEA
and JPDA as well as future onshore activities. From the onset of operations,
the contracts for support in Bayu-Udan and Kitan must be awarded to Suai
Supply Base.
h. There are no costs associated with obtaining all relevant consents,
authorizations and approvals for ownership, construction, maintenance and
operations of the Suai Supply Base.
i.
Once all the relevant standards are in place, grant an international public port
license to the operator of the Suai Supply Base. Consolidate all port activities
for the southern regions into the Suai Supply Base.
j.
Where equivalent manpower cannot be found in Timor-Leste, the operator of

the Suai Supply Base shall be able to employ suitable qualified foreign
personnel for that position.
k. All goods, materials and equipment for the construction, maintenance and
operations at the Suai Supply Base shall not be subject to any import duty,
excise duty or value added tax of any form.
3.5.5. Revenue Assumptions

Many of the factors and parameters necessary to estimate capacity and volume are
still unknown for Timor-Leste, the Suai area and the TLEA and JPDA. The project
team had to make several assumptions in order to arrive at a best guess financial
model based on different scenarios.
The following are the key assumptions that have been made:
-
Breakwater is built to shelter the port during inclement weather and give the
Suai Supply Base year round (365/24) operating capability.
The project is given the go ahead by May 2011. This will give the project team
time to complete construction of the breakwater and jetty during the calmer

III - 62
months. The Suai Supply Base is operational by December 2012, with some
construction continuing for a further 6 months.
-
New exploratory drilling is not expected before 2014 - 2015.
In 2015, additional exploration of the Greater Sunrise field with 6 wells and 3
supply boats to support the drill ship. This program goes on for 6 months.
Sunrise then goes into production in 2018.
The PSCs agree to the rates for the facilities and services at Suai Supply Base
as forecasted.
For simplicity of presentation, the revenue and financial modeling does not
take into account any inflation in the revenue (i.e. rates of services) or
operating cost. This allows us to better demonstrate volume growth or
decline over a period of 10 years. In reality, it would be possible to increase
rates periodically to cover rising costs and operating expenditure due to
inflation.
The revenue scenarios are only forecasted and beyond the control of the
operator to make happen.
3.5.6. The Revenue Model (Offshore Oil and Gas Activities)

The revenue model has been developed to provide each PSC with a reliable base of
operations for any Oil and Gas activity in TLEA and JPDA. To this end, each PSC will
be required to lease a Minishorebase. This package comes with a 2 Hectare yard,
1,000m2 warehouse and office space. The minimum lease period for each
minishorebase is 1 year. Each minishorebase also comes with a yard and warehouse
crew trained and managed by the Suai Supply Base team. Fuel stored is also charged
on throughput. Finally, operational oilspill equipment is kept on standby for the PSC.
This revenue model assumes we are able to successfully mandate each PSC to lease
1 X MSB through the duration of their stay at the Suai Supply Base. The facilities
provided in each MSB are adequate for PSCs engaged in drilling activities, however
they may be excessive for PSCs in production support activities. Given that the
monthly rental of each MSB is not excessive, we believe that the PSCs will accept this
structure. Over and above the benefits of completeness and autonomy provided
with each MSB, this concept will also help the Suai Supply Base to promote local
labour and to generate enough revenue to cover operating costs.

III - 63
Qty
UOM
MiniShorebase
Maintenance Cost
Fuel storage
Yard Labour
W/H Labour
1
10%
3,000
14
4
each
Unit Price
(US$)
36,000
MT
Pax
Pax
12
1,500
3,000
Oilspill Equipment
Set
5,000
TOTAL
Per month
(US$)
36,000
3,600
36,000
21,000
12,000
5,000
113,600
1,363,200
Remarks
Based on fuel throughput

7 X 7 day and night, 5 X 5 on
24/7 manning
To maintain standby
serviceable equipment.
per month
per year
Table III 7 : Revenue Estimates for MiniShorebase

The revenue from boat calls has also been estimated based on the current drilling
programs as well as interviews with the incumbent PSCs. Boatcall activity for a
drilling program and for production support differ greatly and so these have been
modeled separately.
Boat Call (Production)
Qty
Fuel
Water
Port and Berthing
Cargo services
UOM
Unit Price
(US$)
150
100
MT
MT
10
8
200
MT
15
TOTAL
Revenue
(US$)
1,500
800
1,000
3,000
6,350
25,400
304,800
Remarks
Purely stevedoring /
cargodoring cost (5 + 5)
Min per call = 50MT
Min 3hrs at $1,000
Min per call = 200MT
per boat call
per month assuming 4 boat
calls a month
per year
Table III 8 : Revenue Estimates for Production Boat Calls

Boat Call (Drilling)
Qty
UOM
Fuel
Water
300
300
MT
MT
Port and Berthing

Cargo services
Dry bulk
330
600
Hrs
MT
MT
Unit Price
(US$)
Revenue
(US$)
10
8
3,000
2,400
15
2
TOTAL
2,500
4,950
1,200
14,050
281,000
Remarks
Min per call = 50MT
3 hrs min + 3hrs at $500 per
hour after
per boat call
for 20 boat calls a month
Table III 9 : Revenue Estimates for Drilling Boat Calls

III - 64
3.5.7. Profit and Loss (Offshore Oil and Gas revenue)

To estimate revenue purely from the Offshore Oil and Gas activities, we first look at
the confirmed field production activities. Only Bayu Udan and Kitan have confirmed
production activities. Each PSC for these 2 fields will lease a MSB from 2013 onwards.
Production boatcalls are estimated at 4 per month. Maintenance on the offshore rigs
is done twice a year, 1 month duration each and double the activity in terms of boat
calls. We also expect the Greater Sunrise field to commence development activities
in 2015. In 2015, it is assumed 6 months of drilling activities (6 wells, 30 days per well)
in Sunrise. Subsequently, there will be 2 years of project support activities and finally
Sunrise goes into production in 2018.
Based on the assumptions above, the revenue (US$) purely from Oil and Gas
offshore activities in confirmed fields are as follows:
Description
Kitan MSB
Production ^
2013
2014
2015
2016
2017
2018
2019
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
304,800
304,800
304,800
304,800
304,800
304,800
304,800
Maintenance ^^
50,800
50,800
50,800
50,800
50,800
50,800
50,800
Bayu Udan MSB
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
304,800
304,800
304,800
304,800
304,800
304,800
304,800
50,800
50,800
50,800
50,800
50,800
50,800
50,800
Sunrise MSB
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
Sunrise (Development)
^^^
1,686,000
500,000
500,000
304,800
304,800
50,800
50,800
5,156,400
5,156,400
Production ^
Maintenance ^^
Sunrise (Project work)

Production ^
Maintenance ^^
TOTAL
^
^^
^^^
3,437,600
3,437,600
6,486,800
5,300,800
5,300,800
4 production boat calls per month

Twice a year, 1 month each with 4 extra production boat calls
20 exploration boat calls per month for 6 months
Table III 10 : Revenue from oil and gas activities in Kitan, Bayu Udan and Sunrise

III - 65
It is clear from the table above that Oil and Gas activities from the existing fields will
be unable to even cover operating expenses. We anticipate the Government of
Timor-Leste will release new acreage in Dec 2011 and have projected the exploration
drilling programs for this new acreage as follows:
-
2 new acreage PSCs in the TLEA and 2 more in the JPDA.
Each PSC will lease a MSB for 2 years. The 2 PSCs in TLEA will commence in
2013 and the 2 in JPDA will commence in 2015.
Each PSC will engage in 2 drilling programs on the 2nd year. Each drilling
program is for 2 months with 20 boatcalls per month.
1 each in TLEA and JPDA will be successful in their 2nd exploration well. Each
will then drill 2 additional appraisal wells, similarly each drilling program will
be for 2 months with 20 boat calls a month.
The team considered business prospects from the Inpex Masela and the ENI West
Timor activities in an attempt to increase revenue. The SUAI Supply Base would be
the closest facility to these locations. Inpex Masela requires a Supply Base to support
the proposed floating LNG development. At the present time, ENI (the operator of
Kitan field) is conducting seismic activities in West Timor, and has a commitment to
the Government of Indonesia to drill 1 exploration well. The CEO Eastlog approached
BPMIGAS in an effort to explore the possibility of these 2 activities using Suai as its
Supply Base. The response from BPMIGAS was that this was against the Government
of Indonesias policy.

III - 66
Based on the above assumptions, the table below shows the EBITDA (US$) expected
from offshore Oil and Gas activities.
Description
2013
Kitan, Bayu Udan and

Sunrise
3,437,600
New Acreage PSC A MSB
1,363,200
Exploration Boatcalls ^
New Acreage PSC B MSB
2014
3,437,600
2015
2016
2017
2018
2019
6,486,800
5,300,800
5,300,800
5,156,400
5,156,400
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
500,000
500,000
1,363,200
1,363,200
500,000
500,000
1,363,200
1,124,000
1,363,200
1,363,200
1,124,000
Appraisal Boatcalls ^^
1,124,000
Development
1,686,000
Project work
Production
New Acreage PSC C MSB
1,363,200
1,363,200
1,124,000
New Acreage PSC D MSB
1,363,200
1,363,200
1,124,000
Appraisal Boatcalls ^^
1,124,000
Development
1,363,200
1,686,000
Project work
Production
TOTAL O&G Offshore
Operating Expenses
Management Fee ^^^
EBITDA
^
^^
^^^
6,164,000
9,536,000
10,576,400
12,762,400
11,399,200
8,882,800
8,882,800
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(208,920)
(310,080)
(341,292)
(406,872)
(365,976)
(290,484)
(290,484)
(1,795,634)
1,475,206
2,484,394
4,604,814
3,282,510
841,602
841,602
20 exploration boat calls a month, 2 month program, two programs a year

20 boat calls a month, additional 4 months for appraisal drilling
Management fee is 4% of revenue for the first US$2.4Million and 3% subsequently
Table III 11 : Revenue from oil and gas offshore activities

From the analysis above, the revenue purely from the Oil and Gas offshore activities
will provide the base with the ability to reach positive EBITDA in the 2nd year of
operations. However, these revenue numbers dip significantly after the new acreage
drilling activities are complete. It should also be noted that from the experience at
Lamongan ShoreBase, there are frequently unforeseen circumstance that are
beyond the control of the base operator and sometimes even the PSC. These often
result in delay or postponement of scheduled programs.

III - 67
3.5.8. Profit and Loss (All Oil and Gas revenue, Offshore + Onshore)
To complete the Oil and Gas picture, we went ahead to model revenue that can be
expected from onshore Oil and Gas activities. This is assumed to commence in 2016
as follows:
- 1 onshore PSC in residence.
- The PSC will lease a MiniShoreBase (2 Hectare yard, 1,000m2 Warehouse and
office space).
- During exploration, there will be 4 boat calls per month with 2,000MT of
cargo per month. Exploration takes 24 months.
- During production, only 1 boat call per month and cargo services down to
200MT per month.
Onshore Drilling Exploration (Boat calls)
Qty
Fuel
Water
Port and Berthing
Cargo services
100
50
3
500
UOM
Unit Price
(US$)
MT
MT
Hrs
MT
10
8
350
15
TOTAL
Revenue
(US$)
1,000
400
1,050
7,500
9,950
39,800
477,600
Remarks
Min per call = 50MT
per boat call
per month assuming 4
boat calls a month
per year
Table III 12 : Revenue Estimates for Onshore Drilling Boat Calls

Onshore Drilling Production (Boat calls)
Qty
Fuel
Water
Port and Berthing
Cargo services
100
50
3
200
UOM
Unit Price
(US$)
MT
MT
Hrs
MT
10
8
350
15
TOTAL
Revenue
(US$)
1,000
400
1,050
3,000
5,450
5,450
65,400
Remarks
Min per call = 50MT
per boat call
per month assuming 1
boat call a month
per year
Table III 13 : Revenue Estimates for Onshore Production Boat Calls

III - 68
PSCs (onshore drilling)

Qty
MiniShorebase
Maintenance Cost
Fuel storage
UOM
Unit Price
(US$)
0.1
500
Yard Labour
W/H Labour
Oilspill Equipment
12
Per month
(US$)
30,000
3,000
6,000
14
4
pax
pax
1,500
3,000
21,000
12,000
set
5,000
TOTAL
72,000
864,000
Remarks
based on fuel throughput

7 X 7 day and night, 5 X 5
on
24/7 manning
Not necessary for onshore
drilling
per month
per year
Table III 14 : Revenue Estimates for Onshore PSC Minishorebase

Based on the above pricing models, the expected revenue (US$) from all Oil and Gas
activities is as follows:
Description
Kitan, Bayu Udan and
Sunrise
New Acreage Activities
Onshore O&G Activity
TOTAL O&G
Operating Expenses
Management Fee
EBITDA
2013
2014
2015
2016
2017
2018
2019
3,437,600
3,437,600
6,486,800
5,300,800
5,300,800
5,156,400
5,156,400
2,726,400
6,098,400
4,089,600
7,461,600
6,098,400
3,726,400
3,726,400
1,341,600
1,341,600
929,400
929,400
6,164,000
9,536,000
10,576,400
14,104,000
12,740,800
9,812,200
9,812,200
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(7,750,714)
(208,920)
(310,080)
(341,292)
(447,120)
(406,224)
(318,366)
(318,366)
(1,795,634)
1,475,206
2,848,,394
5,906,116
4,583,862
1,743,120
1,743,120
Table III 15 : Summary of revenue from oil and gas activities (offshore and onshore)
3.5.9. Profit and Loss (Additional revenue sources)

One of the things that struck the team repeatedly on their trips to Dili and Suai is the
potential for an explosion of economic activity in the Suai area. The commercial
report has outlined several potential industries that can blossom as well as the
potential for increased industrial activity in and around Suai that comes with the
easy access to a port and commercial network with Dili and the rest of the world. All
these activities will provide additional sources of revenue to the Suai Supply Base
with minimal additional Capex investment or Opex.

III - 69
In order to demonstrate the effect of such revenue sources, we have made the
following assumptions on revenue opportunities:
i)
The Suai Supply Base can generate revenue from liquid storage
activities. This is modeled as follows:
a. 50% of tank capacity at Suai Supply Base will be leased out for a
fuel trader/distributor to use. (i.e. 1 X 3,000kl tank and 1 X 500kl
tank)
b. Storage cost is charged at US$10/kl for the first turn, US$6/kl for
the 2nd turn and US$4/kl for the 3rd turn per month. One turn is
defined as storage of one full capacity tank. For example, if the
operator stores 5,000kl for that month (i.e. initial 3,000kl + 1 top
up of 2,000kl), he will be charged 3,000klXSU$10 for the first turn
and 2,000klXUS$6 for a portion of the 2nd turn.
c. Port charges are US$2 per kl.
d. Volume assumption are that the fuel sales will cover 1 turn a
month for the 1st year, 2 turns a month for the 2nd year and 3
turns a month for the 3rd year. Subsequent years will stay constant
at 3 turns a month.
e. Volume growth is based on anticipated growth of economic
activity stimulated by the availability of the port for cargo
shipment and intermodal connectivity.
Volume per month (kl)

Revenue per month (US$)
Revenue per annum (US$)
1st yr
3,000
36,000
432,000
3,000kl Tank
2nd yr
6,000
60,000
720,000
3rd yr
9,000
78,000
936,000
1st yr
500
6,000
72,000
500kl Tank
2nd yr
1,000
10,000
120,000
3rd yr
1,500
13,000
156,000
Table III 16 : Revenue from liquid storage activities

ii)
Non oil and gas cargo, commencing in 2015. This revenue is estimated
based on our experience at Lamongan Shore Base, that within 2 years
from operations, entrepreneurs will identify and capitalize on
opportunities created by the availability of a port for non oil and gas
cargo and a regular liner service to import and export goods and
materials.

III - 70
iii)
Commercial dry bulk cargo from 2014 onwards. This commercial dry
bulk can be from mining activities (export) or from other potential
bulk cargo (limestone, coal, trass/cement, fertilizer, etc). Commercial
dry bulk customers would lease a stockpile yard at Suai Supply Base.
Material is trucked in/out of the Suai Supply Base continuously. For
export, the material is loaded onto barges (10,000MT barge) via
purpose built conveyor system. For import, the dry bulk is transferred
to the stockpile at the yard. Trucks will then pick the material up from
the yard.
The financial model below assumes there is no capex associated with
setting up a conveyor system. In reality, the throughput charges will
be higher than the US$2 in the table, with the additional charges
being used to finance the construction of such a conveyor system.
During period of higher Oil and Gas activity, the throughput of
commercial dry bulk is estimated at only 100,000MT. From 2018
onwards, when Oil and Gas drilling activities is expected to taper off,
the volume of dry bulk is then estimated to grow and increase to
150,000MT.
Commercial dry bulk
Yard Rental
Throughput of material
Vessel berthing
Qty
UOM
50,000
100,000
10
m2
m3
call
Unit Price
(US$)
2
2
2,000
TOTAL
Per month
(US$)
100,000
200,000
20,000
320,000
3,840,000
Remarks
Per month
Per year
Table III 17 : Revenue Estimates for Commercial Dry Bulk Customer

III - 71
2013
2014
2015
2016
2017
2018
2019
O&G Activities
Description
6,164,000
9,536,000
10,576,400
14,104,000
12,740,800
9,812,200
9,812,200
Liquid Storage
Revenue
504,000
840,000
1,092,000
1,092,000
1,092,000
1,092,000
1,092,000
TOTAL O&G + Liquid

Storage
6,668,000
10,376,000
11,668,400
15,196,000
13,832,800
10,904,200
10,904,200
Operating Expenses
Management Fee
(7,750,714)
(224,040)
(7,750,714)
(335,280)
(7,750,714)
(374,052)
(7,750,714)
(479,880)
(7,750,714)
(438,984)
(7,750,714)
(351,126)
(7,750,714)
(351,126)
EBITDA
(1,306,754)
2,290,006
3,543,634
6,965,406
5,643,102
2,802,360
2,802,360
Table III 18 : Summary of revenue from oil and gas + liquid storage activities
2013
2014
2015
2016
2017
2018
2019
O&G Activities
Description
6,164,000
9,536,000
10,576,400
14,104,000
12,740,800
9,812,200
9,812,200
Liquid Storage
Revenue
504,000
840,000
1,092,000
1,092,000
1,092,000
1,092,000
1,092,000
240,000
360,000
1,000,000
1,000,000
1,000,000
3,840,000
3,840,000
3,840,000
3,840,000
5,760,000
5,760,000
6,668,000
14,216,000
15,748,400
19,396,000
18,672,800
17,664,200
17,664,200
Operating Expenses
Management Fee
(7,750,714)
(224,040)
(7,750,714)
(450,480)
(7,750,714)
(496,452)
(7,750,714)
(605,880)
(7,750,714)
(584,184)
(7,750,714)
(553,926)
(7,750,714)
(553,926)
EBITDA
(1,306,754)
6,014,806
7,501,234
11,039,406
10,337,902
9,539,560
9,539,560
Non oil and gas cargo

Commercial dry bulk
TOTAL Supply Base
Plus All available
cargo
Table III 19 : Summary of revenue from all available cargo Supply Base Plus

III - 72
Description
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Kitan MSB
Production Boatcalls
Maintenance Boatcalls
Well shutdown
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,000,000
Bayu Udan MSB

Production Boatcalls
Maintenance Boatcalls
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
304,800
50,800
1,363,200
1,686,000
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
500,000
500,000
304,800
50,800
304,800
50,800
304,800
50,800
304,800
50,800
304,800
50,800
1,363,200
1,363,200
1,363,200
1,363,200
1,363,200
500,000
500,000
304,800
304,800
304,800
1,363,200
1,363,200
1,363,200
Sunrise MSB
Sunrise (Development)
Sunrise (Project work)
Sunrise (Production)
Maintenance
New Acreage PSC A MSB
Exploration Boatcalls
1,363,200
1,363,200
1,124,000
New Acreage PSC B MSB

Appraisal Boatcalls
Development
Project work
Production
1,363,200
1,363,200
1,124,000
1,124,000
1,363,200
1,363,200
1,686,000
New Acreage PSC C MSB

1,363,200
1,363,200
1,124,000
New Acreage PSC D MSB

Appraisal Boatcalls
Development
Project work
Production
1,363,200
1,363,200
1,124,000
1,124,000
504,000
1,363,200
1,363,200
500,000
500,000
Commercial dry bulk

6,164,000
6,164,000
6,668,000
6,668,000
304,800
304,800
304,800
1,341,600
1,341,600
929,400
929,400
929,400
929,400
929,400
1,092,000
1,092,000
1,092,000
1,092,000
1,092,000
1,092,000
1,092,000
840,000
1,092,000
240,000
360,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
3,840,000
3,840,000
3,840,000
3,840,000
5,760,000
5,760,000
5,760,000
5,760,000
5,760,000
9,536,000
9,536,000
10,376,000
14,216,000
10,576,400
10,576,400
11,668,400
15,748,400
12,762,400
14,104,000
15,196,000
19,396,000
11,399,200
12,740,800
13,832,800
18,672,800
8,882,800
9,812,200
10,904,200
17,664,200
8,882,800
9,812,200
10,904,200
17,664,200
8,492,400
9,421,800
10,513,800
17,273,800
8,492,400
9,421,800
10,513,800
17,273,800
9,492,400
10,421,800
11,513,800
18,273,800
Commercial cargo
O&G Offshore Total

O&G Total
O&G + Liquid Storage
Supply Base Plus - All Cargo
1,363,200
1,686,000
Onshore drilling
Liquid Storage Revenue
1,363,200
Table III 20 : Revenue Forecast (2013 to 2022) from all available cargo Supply Base Plus

III - 73
Table III 21 : EBITDA Forecast (2013 to 2022)
O&G (Offshore)
O&G (Total)
O&G (Total) + Liquid Storage
Supply Base Plus - All Cargo
2013
(1,795,634)
(1,795,634)
(1,306,754)
(1,306,754)
2014
1,475,206
1,475,206
2,290,006
6,014,806

2015
2,484,394
2,484,394
3,543,634
7,501,234
2016
4,604,814
5,906,166
6,965,406
11,039,406
2017
3,282,510
4,583,862
5,643,102
10,337,902
2018
841,602
1,743,120
2,802,360
9,359,560
2019
841,602
1,743,120
2,802,360
9,359,560
2020
462,914
1,364,432
2,423,672
8,980,872
2021
462,914
1,364,432
2,423,672
8,980,872
2022
1,432,914
2,334,432
3,393,672
9,950,872
III - 74
3.5.10.
Net Present Value and Internal Rate of Return
To understand the commercial viability of the Suai Supply Base, the final step is to
calculate the Net Present Value and Internal Rate of Return over 20 years for the
Project. We also identified 2 cases from the revenue models above to fun this
analysis. To do this, we took the revenue models from 2 cases above, namely 2)
Revenue from Oil and Gas (Total) and 4) Supply Base Plus All Available Cargo.
The Weighted Average Cost of Capital (WACC) of a project is the minimum return
that the project must earn to satisfy its creditors, owners and other providers of
capital, or they will invest elsewhere. For the purposes of the Suai Supply Base, we
will use a WACC of 8%. This is lower than what is typical in Indonesia (15%), however
a large part of this project is expected to be funded by the Government as a strategic
infrastructure project and thus a lower yield is not unreasonable.
The Net Present Value (NPV) of a project over a defined period is a sum of all
discounted cash flow over that period (i.e. the cash flow is discounted by the WACC
over time to reflect its present value). This is a standard method for using the time
value of money to appraise long term projects. For our calculation of Net Present
Value, the initial capex is excluded from the year 0 cashflow. A measure of the
profitability of a project is thus the comparison of the NPV against the initial outflow
of capital (i.e. Capex outlay). For our analysis, we have calculated the NPV of the
project over a period of 20 years, which is typical for an infrastructure project. As our
revenue model extends only out to 10 years, the subsequent 10 years (2023 to 2032)
are assumed the same as 2022 which is not an unreasonable assumption. This is
purely for the purposes of modeling the financial viability. Forecasts of revenue
beyond 10 years are unreliable at best, and have very limited value.
The Internal Rate of Return (IRR) is a rate of return used in capital budgeting to
measure and compare the profitability of investments. The free cash flow year on
year is compared against the initial capex outlay to give a rate of return on the
investment (i.e. Capex cost). The IRR calculation used in our analysis is a simple rate
of return and does not take into consideration any cost of capital. Another way of
looking at the IRR of an investment is the interest rate at which the net present value
of costs (negative cash flows) equals the net present value of benefits (positive cash
flows). In theory, all projects with an IRR that exceed the cost of capital (WACC) is a
commercially viable one. As with the NPV, the IRR has been calculated over 20 years.

III - 75
Three scenarios were run for each of the 2 cases to calculate the NPV and IRR. The 3
scenarios are described below:
Scenario 1: Full Capex Model. In this scenario, the full cost of the infrastructure
(Breakwater, Jetty/Dock, Building and facilities) as well as the operating
assets are borne by the business venture and return on investment
needs to fully compensate all of this.
Scenario 2: Build, Own and Operate Model. In this scenario, the cost of the
breakwater and earthworks has been removed from the cost of project
setup for the Suai venture. Return on investment needs to only
compensate the Buildings & Facilities and all operating assets.
Scenario 3: Terminal Operatorship Model. In this scenario, it is assumed that the
cost of infrastructure is purely borne by the Government of Timor-Leste
as a project of national interest. Operating assets are the only
investment of the joint venture. The Government of Timor-Leste then
enters into a revenue sharing agreement with the Supply Base operator
for 20% of total revenue off the topline.
The first scenario is provided to demonstrate the negative effect of the cost of the
breakwater and land improvements on the project viability. It is not common for
commercial projects to bear the cost of breakwaters.
The second and third scenarios would be more commonly used in a public-sector /
private sector partnership.
The second scenario is envisaged because this location requires the construction of a
breakwater to make the site a viable site. Under such cases, it is normal for the
Government in question to undertake the necessary works to make the location
viable. An example of this can be seen in the 12.9Ha dredging to provide access to
the channel that will be undertaken by the Australian government in the Darwin
Supply Base project.
The last scenario is called terminal operatorship. One example of this is Tanjong
Priok in Indonesia. The Government builds the terminal and retains ownership and
control of the facilities as a strategic national asset. The operator brings the
operating capital assets and manages the facilities, with a revenue sharing model.
The following tables show the results of the 6 different scenarios.

III - 76
Scenario 1:
Full Capex Model
Revenue: Oil and Gas (Total)
Year 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue
6,164,000
9,536,000
10,576,400
14,104,000
12,740,800
9,812,200
9,812,200
9,421,800
9,421,800
10,421,800
Operating Expenses
Outsourced Variable Management Fee
(7,750,714)
(208,920)
(7,750,714)
(310,080)
(7,750,714)
(341,292)
(7,750,714)
(406,872)
(7,750,714)
(365,976)
(7,750,714)
(290,484)
(7,750,714)
(290,484)
(7,750,714)
(278,772)
(7,750,714)
(278,772)
(7,750,714)
(308,772)
EBITDA
(1,795,634)
1,475,206
2,484,394
5,946,414
4,624,110
1,771,002
1,771,002
1,392,314
1,392,314
2,362,314
Depreciation:
- Infrastructure
- Operating Assets
(13,658,125)
(2,003,000)
(13,658,125)
(2,003,000)
(13,658,125)
(1,403,000)
(13,658,125)
(1,403,000)
(13,658,125)
(1,403,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
EBIT
(17,456,759)
(14,185,919)
(12,576,731)
(9,114,711)
(10,437,015)
(12,815,123)
(12,815,123)
(13,193,811)
(13,193,811)
(12,223,811)
(17,456,759)
0%
(17,456,759)
15,661,125
(14,185,919)
0%
(14,185,919)
15,661,125
(12,576,731)
0%
(12,576,731)
15,061,125
(9,114,711)
0%
(9,114,711)
15,061,125
(10,437,015)
0%
(10,437,015)
15,061,125
(12,815,123)
0%
(12,815,123)
14,586,125
(12,815,123)
0%
(12,815,123)
14,586,125
(13,193,811)
0%
(13,193,811)
14,586,125
(13,193,811)
0%
(13,193,811)
14,586,125
(12,223,811)
0%
(12,223,811)
14,586,125
(1,795,634)
8%
1.08
(1,662,624)
1,475,206
8%
1.17
1,264,751
2,484,394
8%
1.26
1,972,192
5,946,414
8%
1.36
4,370,792
4,624,110
8%
1.47
3,147,092
1,771,002
8%
1.59
1,116,032
1,771,002
8%
1.71
1,033,363
1,392,314
8%
1.85
752,224
1,392,314
8%
2.00
696,504
2,362,314
8%
2.16
1,094,208
Free Cash Flow = EBIT x (1-T) + Depreciation - Changes in Working Capital - Capex
EBIT
Tax Rate
After-tax EBIT
Depreciation
Capex
Free Cash Flow
WACC (%)
Discounting factor
Discounted value of FCFs
NPV
IRR
(286,017,500)
(286,017,500)
1.00
18,111,936.91
#DIV/0!
This scenario is for a pure Oil and Gas revenue model, with the full infrastructure Capex taken into consideration.
NPV for this scenario falls very far short of the initial Capex outlay. This structure is not commercially viable.

III - 77
Scenario 2:
Full Capex Model
Revenue: Oil and Gas + Commercial cargo
Year 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue
6,668,000
14,216,000
15,748,400
19,396,000
18,672,800
17,664,200
17,664,200
17,273,800
17,273,800
18,273,800
Operating Expenses
(7,750,714)
(208,920)
(7,750,714)
(310,080)
(7,750,714)
(341,292)
(7,750,714)
(406,872)
(7,750,714)
(365,976)
(7,750,714)
(290,484)
(7,750,714)
(290,484)
(7,750,714)
(278,772)
(7,750,714)
(278,772)
(7,750,714)
(308,772)
EBITDA
(1,291,634)
6,155,206
7,656,394
11,238,414
10,556,110
9,623,002
9,623,002
9,244,314
9,244,314
10,214,314
Depreciation:
- Infrastructure
- Operating Assets
(13,658,125)
(2,003,000)
(13,658,125)
(2,003,000)
(13,658,125)
(1,403,000)
(13,658,125)
(1,403,000)
(13,658,125)
(1,403,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
(13,658,125)
(928,000)
EBIT
(16,952,759)
(9,505,919)
(7,404,731)
(3,822,711)
(4,505,015)
(4,963,123)
(4,963,123)
(5,341,811)
(5,341,811)
(4,371,811)
(16,952,759)
0%
(16,952,759)
15,661,125
(9,505,919)
0%
(9,505,919)
15,661,125
(7,404,731)
0%
(7,404,731)
15,061,125
(3,822,711)
0%
(3,822,711)
15,061,125
(4,505,015)
0%
(4,505,015)
15,061,125
(4,963,123)
0%
(4,963,123)
14,586,125
(4,963,123)
0%
(4,963,123)
14,586,125
(5,341,811)
0%
(5,341,811)
14,586,125
(5,341,811)
0%
(5,341,811)
14,586,125
(4,371,811)
0%
(4,371,811)
14,586,125
(1,291,634)
8%
1.08
(1,195,957)
6,155,206
8%
1.17
5,277,097
7,656,394
8%
1.26
6,077,892
11,238,414
8%
1.36
8,260,570
10,556,110
8%
1.47
7,184,311
9,623,002
8%
1.59
6,064,124
9,623,002
8%
1.71
5,614,929
9,244,314
8%
1.85
4,994,415
9,244,314
8%
2.00
4,624,459
10,214,314
8%
2.16
4,731,204
EBIT
Tax Rate
After-tax EBIT
Depreciation
Capex
Free Cash Flow
WACC (%)
Discounting factor
NPV
IRR
(286,017,500)
(286,017,500)
1.00
80,364,981.34
-4.1%
In this scenario, the revenue model is that for a Supply Base Plus All Available Cargo. It assumes the Supply Base is the de facto port
facility in the south for all cargo. The full infrastructure capex is applied to the project.
Even with the full revenue of all available cargo, the NPV in this scenario falls far short of the Capex investment. The IRR is negative.
Undertaking the project with this structure is not commercially viable.

III - 78
Scenario 3:
Build, Own and Operate Model
Year 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue
6,164,000
9,536,000
10,576,400
14,104,000
12,740,800
9,812,200
9,812,200
9,421,800
9,421,800
10,421,800
Operating Expenses
(7,750,714)
(208,920)
(7,750,714)
(310,080)
(7,750,714)
(341,292)
(7,750,714)
(406,872)
(7,750,714)
(365,976)
(7,750,714)
(290,484)
(7,750,714)
(290,484)
(7,750,714)
(278,772)
(7,750,714)
(278,772)
(7,750,714)
(308,772)
EBITDA
(1,795,634)
1,475,206
2,484,394
5,946,414
4,624,110
1,771,002
1,771,002
1,392,314
1,392,314
2,362,314
Depreciation:
- Infrastructure
- Operating Assets
(3,431,707)
(2,003,000)
(3,431,707)
(2,003,000)
(3,431,707)
(1,403,000)
(3,431,707)
(1,403,000)
(3,431,707)
(1,403,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
EBIT
(7,230,341)
(3,959,501)
(2,350,313)
1,111,707
(210,597)
(2,588,705)
(2,588,705)
(2,967,393)
(2,967,393)
(1,997,393)
(7,230,341)
0%
(7,230,341)
5,434,707
(3,959,501)
0%
(3,959,501)
5,434,707
(2,350,313)
0%
(2,350,313)
4,834,707
1,111,707
0%
1,111,707
4,834,707
(210,597)
0%
(210,597)
4,834,707
(2,588,705)
0%
(2,588,705)
4,359,707
(2,588,705)
0%
(2,588,705)
4,359,707
(2,967,393)
0%
(2,967,393)
4,359,707
(2,967,393)
0%
(2,967,393)
4,359,707
(1,997,393)
0%
(1,997,393)
4,359,707
(1,795,634)
8%
1.08
(1,662,624)
1,475,206
8%
1.17
1,264,751
2,484,394
8%
1.26
1,972,192
5,946,414
8%
1.36
4,370,792
4,624,110
8%
1.47
3,147,092
1,771,002
8%
1.59
1,116,032
1,771,002
8%
1.71
1,033,363
1,392,314
8%
1.85
752,224
1,392,314
8%
2.00
696,504
2,362,314
8%
2.16
1,094,208
EBIT
Tax Rate
After-tax EBIT
Depreciation
Capex
Free Cash Flow
WACC (%)
Discounting factor
NPV
IRR
(81,530,000)
(81,530,000)
1.00
18,111,936.91
-7.4%
This scenario is for a pure Oil and Gas revenue model, with the infrastructure Capex (less breakwater and earthworks) taken into
consideration.
NPV for this scenario still falls short of the initial Capex outlay. This structure is not commercially viable.

III - 79
Scenario 4:
Build, Own and Operate Model
Year 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue
6,668,000
14,216,000
15,748,400
19,396,000
18,672,800
17,664,200
17,664,200
17,273,800
17,273,800
18,273,800
Operating Expenses
(7,750,714)
(208,920)
(7,750,714)
(310,080)
(7,750,714)
(341,292)
(7,750,714)
(406,872)
(7,750,714)
(365,976)
(7,750,714)
(290,484)
(7,750,714)
(290,484)
(7,750,714)
(278,772)
(7,750,714)
(278,772)
(7,750,714)
(308,772)
EBITDA
(1,291,634)
6,155,206
7,656,394
11,238,414
10,556,110
9,623,002
9,623,002
9,244,314
9,244,314
10,214,314
Depreciation:
- Infrastructure
- Operating Assets
(3,431,707)
(2,003,000)
(3,431,707)
(2,003,000)
(3,431,707)
(1,403,000)
(3,431,707)
(1,403,000)
(3,431,707)
(1,403,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
(3,431,707)
(928,000)
EBIT
(6,726,341)
720,499
2,821,687
6,403,707
5,721,403
5,263,295
5,263,295
4,884,607
4,884,607
5,854,607
(6,726,341)
0%
(6,726,341)
5,434,707
720,499
0%
720,499
5,434,707
2,821,687
0%
2,821,687
4,834,707
6,403,707
0%
6,403,707
4,834,707
5,721,403
0%
5,721,403
4,834,707
5,263,295
0%
5,263,295
4,359,707
5,263,295
0%
5,263,295
4,359,707
4,884,607
0%
4,884,607
4,359,707
4,884,607
0%
4,884,607
4,359,707
5,854,607
0%
5,854,607
4,359,707
(1,291,634)
8%
1.08
(1,195,957)
6,155,206
8%
1.17
5,277,097
7,656,394
8%
1.26
6,077,892
11,238,414
8%
1.36
8,260,570
10,556,110
8%
1.47
7,184,311
9,623,002
8%
1.59
6,064,124
9,623,002
8%
1.71
5,614,929
9,244,314
8%
1.85
4,994,415
9,244,314
8%
2.00
4,624,459
10,214,314
8%
2.16
4,731,204
EBIT
Tax Rate
After-tax EBIT
Depreciation
Capex
Free Cash Flow
WACC (%)
Discounting factor
NPV
IRR
(81,530,000)
(81,530,000)
1.00
80,364,981.34
7.8%
facility in the south for all cargo. Only the infrastructure Capex (less breakwater and earthworks) is taken into consideration.
NPV for this scenario barely allows the project to break even after 20 years. The IRR is 7.8%, just slightly lower than the WACC of 8%.

III - 80
Scenario 5:
Terminal Ownership Model
Year 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue
6,164,000
9,536,000
10,576,400
14,104,000
12,740,800
9,812,200
9,812,200
9,421,800
9,421,800
10,421,800
Operating Expenses
SiteLease
(7,750,714)
(208,920)
(1,232,800)
(7,750,714)
(310,080)
(1,907,200)
(7,750,714)
(341,292)
(2,115,280)
(7,750,714)
(406,872)
(2,820,800)
(7,750,714)
(365,976)
(2,548,160)
(7,750,714)
(290,484)
(1,962,440)
(7,750,714)
(290,484)
(1,962,440)
(7,750,714)
(278,772)
(1,884,360)
(7,750,714)
(278,772)
(1,884,360)
(7,750,714)
(308,772)
(2,084,360)
EBITDA
(3,028,434)
(431,994)
369,114
3,125,614
2,075,950
(191,438)
(191,438)
(492,046)
(492,046)
277,954
Depreciation:
- Infrastructure
- Operating Assets
(2,003,000)
(2,003,000)
(1,403,000)
(1,403,000)
(1,403,000)
(928,000)
(928,000)
(928,000)
(928,000)
(928,000)
EBIT
(5,031,434)
(2,434,994)
(1,033,886)
1,722,614
672,950
(1,119,438)
(1,119,438)
(1,420,046)
(1,420,046)
(650,046)
EBIT
Tax Rate
After-tax EBIT
Depreciation
Capex
Free Cash Flow
WACC (%)
Discounting factor
NPV
IRR
(12,855,000)
(12,855,000)
1.00
(5,031,434)
0%
(5,031,434)
2,003,000
(2,434,994)
0%
(2,434,994)
2,003,000
(1,033,886)
0%
(1,033,886)
1,403,000
1,722,614
0%
1,722,614
1,403,000
672,950
0%
672,950
1,403,000
(1,119,438)
0%
(1,119,438)
928,000
(1,119,438)
0%
(1,119,438)
928,000
(1,420,046)
0%
(1,420,046)
928,000
(1,420,046)
0%
(1,420,046)
928,000
(650,046)
0%
(650,046)
928,000
(3,028,434)
8%
1.08
(2,804,106)
(431,994)
8%
1.17
(370,365)
369,114
8%
1.26
293,015
3,125,614
8%
1.36
2,297,420
2,075,950
8%
1.47
1,412,857
(191,438)
8%
1.59
(120,638)
(191,438)
8%
1.71
(111,702)
(492,046)
8%
1.85
(265,837)
(492,046)
8%
2.00
(246,146)
277,954
8%
2.16
128,746
(1,316,068.16)
#DIV/0!
This scenario is for a pure Oil and Gas revenue model, with no infrastructure Capex and only Capex on operating assets. The facilities
are leased to the operator.
With only Oil and Gas revenue, the Suai Supply Base is unable to cover the cost of the lease. This scenario is not commercially viable.

III - 81
Scenario 6:
Terminal Ownership Model
Year 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Revenue
6,668,000
14,216,000
15,748,400
19,396,000
18,672,800
17,664,200
17,664,200
17,273,800
17,273,800
18,273,800
Operating Expenses
SiteLease
(7,750,714)
(208,920)
(1,333,600)
(7,750,714)
(310,080)
(2,843,200)
(7,750,714)
(341,292)
(3,149,680)
(7,750,714)
(406,872)
(3,879,200)
(7,750,714)
(365,976)
(3,734,560)
(7,750,714)
(290,484)
(3,532,840)
(7,750,714)
(290,484)
(3,532,840)
(7,750,714)
(278,772)
(3,454,760)
(7,750,714)
(278,772)
(3,454,760)
(7,750,714)
(308,772)
(3,654,760)
EBITDA
(2,625,234)
3,312,006
4,506,714
7,359,214
6,821,550
6,090,162
6,090,162
5,789,554
5,789,554
6,559,554
Depreciation:
- Infrastructure
- Operating Assets
(2,003,000)
(2,003,000)
(1,403,000)
(1,403,000)
(1,403,000)
(928,000)
(928,000)
EBIT
(4,628,234)
1,309,006
3,103,714
5,956,214
5,418,550
5,162,162
5,162,162
4,861,554
4,861,554
5,631,554
(928,000)
(928,000)
(928,000)
EBIT
Tax Rate
After-tax EBIT
Depreciation
Capex
Free Cash Flow
WACC (%)
Discounting factor
NPV
IRR
(12,855,000)
(12,855,000)
1.00
(4,628,234)
0%
(4,628,234)
2,003,000
1,309,006
0%
1,309,006
2,003,000
3,103,714
0%
3,103,714
1,403,000
5,956,214
0%
5,956,214
1,403,000
5,418,550
0%
5,418,550
1,403,000
5,162,162
0%
5,162,162
928,000
5,162,162
0%
5,162,162
928,000
4,861,554
0%
4,861,554
928,000
4,861,554
0%
4,861,554
928,000
5,631,554
0%
5,631,554
928,000
(2,625,234)
8%
1.08
(2,430,772)
3,312,006
8%
1.17
2,839,511
4,506,714
8%
1.26
3,577,575
7,359,214
8%
1.36
5,409,242
6,821,550
8%
1.47
4,642,632
6,090,162
8%
1.59
3,837,835
6,090,162
8%
1.71
3,553,551
5,789,554
8%
1.85
3,127,916
5,789,554
8%
2.00
2,896,218
6,559,554
8%
2.16
3,038,343
48,486,367.39
28.1%
facility in the south for all cargo. There is no infrastructure Capex and only Capex on operating assets. The facilities are leased to the
operator.
The NPV for this scenario is very healthy and the Project shows a robust 28.1% IRR. This is a commercially viable structure.

III - 82
3.5.11.
Industrial Estate Land Value
In Section 1 of this commercial report, the team recommended the building of an

industrial complex adjacent to the Suai Supply Base (Zone C). The Government of
Timor-Leste should develop this industrial complex as a means to recover the capital
expenditure for project and generate consistent two way cargo flow for the port.
Zone C
Zone B
Zone A
Figure III 17 : Suai Supply Base Land Allocation
The 250Ha in Zone C allocated for the industrial complex can be developed in phases
as demand dictates.
The following key numbers demonstrate the tremendous increase in value of land
adjacent to the port.
-
Raw land cost at US$5 /m2
Infrastructure development capital costs at US$20 /m2
Gross land to nett saleable land at a ratio of 0.8
Sale of industrial land at US$150/m2 (experience at Lamongan Shorebase

shows a 100 times appreciation in land value after port development)
Revenue from sale of industrial land: 250 X 10,000 X 0.8 X US$150 = US$300Million
Cost of sales: (US$5 + US$20) X 10,000 X 250 = US$62.5Million
Profit before tax: US$237.5Million

III - 83
3.5.12.
Conclusion for Financial Analysis of the SSB project
The table below provides a summary of the 6 scenarios modeled.

Capex (US$)
NPV (US$)
Revenue: Oil & Gas (offshore and onshore)

Full Capex
286,017,500
18,111,937
Build, Own and
Operate
81,530,000
18,111,937
Terminal
Operatorship
12,855,000 (1,316,068)
Revenue: Supply Base Plus All Available Cargo
Full Capex
286,017,500
80,364,981
Build, Own and
Operate
81,530,000
80,364,981
Terminal
Operatorship
12,855,000
48,486,367
IRR
NA
-7.4%
NA
-4.1%
7.8%
28.1%
Remarks
Not viable. NPV falls far short of
Unable to cover site lease. Project
loses money, negative NPV.
Project breaks even over 20 years.
Healthy NPV and robust IRR.
Project commercially viable.
Table III 22 : Summary of NPV and IRR for the different scenarios
We can draw the following conclusions from the financial modeling done:
1) The revenue from existing fields cannot justify a Supply Base at Suai. The
assumptions on new acreage revenue model are essential for the Suai Supply
Base to have positive operating cashflow but will still not be able to provide
any return on the capital investment.
2) If the Suai Supply Base has only the Oil and Gas industry as its source of
revenue, the project is not commercially viable.
3) With no additional Capex or Opex investments, the addition of revenue
sources from outside the Oil and Gas industry significantly improves the
financials for the Suai Supply Base.
4) As much as the breakwater is essential for the base to be able to operate
365/24, the cost of the breakwater is a significant burden on the project.
With the cost of the breakwater, the Suai Supply Base is not a viable business
venture.
5) Operating as the de facto port facility for the southern region, the Suai Supply
Base is able to generate enough revenue to make it a viable business venture.

III - 84
3.5.13.
Recommendations
As a result of the financial analysis above, the commercial team have the following
recommendations:
-
The Government of Timor-Leste should develop the Suai Supply Base to

maximize this port facility for the Southern regions. This means allowing all
available cargo to pass through the Suai Supply Base. The Suai Supply Base
then becomes the de facto port facility in the South and will allow the Suai
Supply Base to generate revenue that is stable.
The Government of Timor-Leste should also develop the industrial estate

adjacent to the Suai Supply Base.:
o The industrial estate can benefit from access to the port and also from
the infrastructure upgrades.
o The industrial estate will provide the two way cargo volumes that
grow in tandem with increased industrial activity brought about by
the port. The industrial estate has thus a symbiotic relationship with
the port at the Suai Supply Base.
o This is the first step on the road to industrialization for Timor-Leste,
taking advantage of the available manpower and abundant source of
energy.
With both the above in place, we recommend the terminal operatorship

model:
o The Government of Timor-Leste will still retain ownership and control
of the strategic asset which is the port and breakwater in the south
and control future expansion activities whilst still have the full benefit
of a professional port operator in a Public Sector Private Sector
Partnership.
o The sale of industrial land in the industrial estate pays for the
construction of this strategic asset (Suai Supply Base), without the
need for assistance from foreign investment

III - 85
Part IV
Social Impact Study

Engineering Design (FEED) Social Impact Study
IV - 1
4.1.
Background
The Government of Timor-Leste intends to build and operate a logistics supply base
to support all offshore Oil and Gas activities in the TLEA and JPDA. A Supply Base
built on Timor-Leste shores to support the Oil and Gas industry will generate much
value both to the Oil and Gas activities in Timor-Leste as well as its supporting
industries. The Suai Supply Base is set to be the catalyst that will launch the social
and economic development of the Southern Region of Timor-Leste. The availability
of port facilities for the movement of cargo will release the full potential the SuaiBetano-Beaco corridor.
As it now stands, Suai is yet to be developed and has very limited infrastructure
support and hence is a challenge to develop. During this phase of rapid change and
progress, there will be a need for better coordination between Government agencies,
development partners and contractors. There is a need also for the Government to
strengthen the regulatory framework within which the development partners,
contractors and local industry will operate. A study of the social impact of the Suai
Supply Base project will allow the Government of Timor-Leste to prioritise its efforts
to assist its citizens as well as local businesses in transitioning to the new economy.
This study will look at the socioeconomic impact of the Suai Supply Base project in
the Suai region. The Suai region is dominated by the Suai city and is the capital
district of Covalima. The entire Covalima district has less than 40,000 inhabitants.
Suai City has a population of less than 10,000. The main economic activity in the
region is small scale farming, mainly for subsistence. It is difficult under the
circumstances to assess the actual rate of employment, however it is low.
Infrastructure is weak compounded by difficulties of transport and communications
between Dili and Suai.

IV - 2
4.2.
Main Activities
The Suai Supply Base project will undergo 2 distinct phases. The first is the
construction phase, during which all the construction activities for the breakwater,
marine and land based facilities will be built.
During the construction phase, the following activities will take place:
-
Work at up to two quarry sites to blast and gather rocks as building material
for the breakwater.
Work at Karau-Ulun river bed to gather rocks and sand as building material
for the breakwater.
Construction of access road (gravel) from the quarry sites and river bed to the
Suai Supply base or LCT loading ramp.
Trucking of materials from the quarry sites and river bed on the access roads
by dump trucks.
Construction of breakwater at the Suai supply Base site.
Construction of jetty and marine structures within the breakwater basin.
Clearing of site for land based facilities, including a helipad (visual landing).
Construction of roads and land based facilities at the Suai Supply Base site in
accordance with the EPC plan.
Monthly supply run of 3 vessels from Lamongan to Suai. (1 X 2,000MT LCT, 1

X 5,000MT Barge and 1 X 1,000 MT Fuel Tanker)
The second phase will be the operations phase. During the operations phase, the
initial focus will be for the Supply Base to serve as the logistics base for offshore oil
and gas activities in the JPDA and TLEA. Since the port facilities can also serve other
cargo (commercial bulk and container cargo), and as businesses and projects in the
southern region get familiar with the port facilities, commercial cargo is expected to
grow. The port infrastructure and facilities will be available for use by other
businesses in the southern region (liquid fuel storage, commercial cargo, Ro-Ro LCT
ramp, etc) and this will act as a catalyst for general economic activity in the Suai area
and the Southern region as a whole.

IV - 3
The main activities are as follows:

- General office management and admin of the Supply Base.
- Port activities
- Warehousing, equipment staging and inspection
- Fabrication and equipment maintenance
- Catering
- Commercial bulk and container handling
- Liquid cargo handling
It is important to note here that there will not be a clean distinction between the
construction and the operations phase. There will still be some construction work
post operations, depending on phase 2 and phase 3 development schedule. Similarly,
preparations for the operations phase will commence way before the actual
commissioning date of the Suai Supply Base.
As a result of building the Suai Supply Base, the Suai Region will benefit from the
availability of the following new facilities:
-
Port with multi purpose berthing facilities and LCT ramp
Sheltered basin within the breakwater
Reverse Osmosis system with 800MT of fresh water storage
Fuel Storage tank farm (2 X 3,000MT tanks + 2 X 500MT tanks)
Monthly LCT Liner run to Lamongan
Community centre with the following

o Soccer field
o Multi-purpose hall
o Badminton / Basketball Court
o Internet room
o Training and conference facilities

IV - 4
4.3.
Social Programs
As part of the efforts to create economic alignment with the local community and
minimize negative social impacts, Eastlog will put in place the following programs:
4.3.1. Create a Community Office (in Suai)
This community office will be staffed by Timorese personnel and will play the
following roles:
i. Single point of contact with the community to provide information as to the
progress of the project, opportunities for jobs, contracts, etc. Help to identify
and promote activities for Timorese nationals in the Suai Supply Base project.
ii. Liaise with the community on all pre-condition surveys to be conducted
before the commencement of work in the vicinity of any buildings or
structures. This will help make sure that these structures are not damaged
during the course of works done as part of the Suai Supply Base project.
iii. Manage any potential environmental (noise and dust) impact or damage
during work and blasting at the quarries.
iv. Encourage the community to build accommodation and assist the community
in defining the requirements and specifications of such accommodation such
that they can be rented out in the future to personnel in the oil and gas
industry.
v. Track the economic development and impact to the community and produce
an annual report available to the public.
Once operations at the Suai Supply Base commences, this community office will be
absorbed into the Suai Supply Base organization structure as a Community Relations
Department.

IV - 5
Community Liaison Office at Lamongan Shorebase

At Lamongan Shorebase in East Java, we recognised the need to engage with the local
community and did so in two separate ways.
1. Our companys community development manager and team were constantly on
site even before construction. However, we did not have a permanent office
either onsite or in the community till after commencement of operations.
2. Every Friday afternoon tea session in the local mosque, which was attended by
the village headman, and several non government organisations.
Our experience tells us that what we did was insufficient as there was no permanent
office where the community could interface with us. Further, the Friday tea sessions
ended up with giving too much influence to the people attending, sometimes to the
detriment of the community as a whole.
Based on these experiences, we have concluded that for all future projects, we must
have a permanent office within the community prior to construction, and our doors
must be open equally to all.
We have also recommended that the community office track the socioeconomic impact
of the project over a ten year period using agreed metrics. This will enable the
government to have access to accurate and reliable data. In Lamongan, we started with
a similar objective but assigned it to the corporate affairs manager who was not suited
by training and background/education for this task. This task has to be assigned to
socioeconomic consultant to setup and to monitor the gathering of data and
interpretation.
4.3.2. Establish a regular Liner Service

During construction, there will be a regular LCT and Barge sailing between Lamongan
Shorebase and the Suai Supply Base construction site. The EPC contractor will be
required to release some space on each voyage to allow commercial cargo for local
Suai enterprises. The benefits of such an initiative are as follows:
-
This creates awareness in the local business community that there is a port
being built and thus cargo volumes start to develop. From our experience, it
takes time (about 5 years from first operation) for cargo volumes to grow to
their full potential. This early creation of the Liner Service will accelerate this
process.

IV - 6
This generates economic value to the community by creating new business

opportunities and reducing the cost of logistics for goods imported through
this avenue. The liner can also carry additional construction material into the
community to enable it to develop the housing necessary to house Suai
Supply Base personnel once it starts operations.
This regular line will continue during operations to provide for global logistics
connectivity. Additional destinations like Darwin or even Singapore and the
Philippines should be explored.
Commercial Cargo development at Lamongan Shorebase in East Java
From experience at Lamongan Shorebase, it takes time (about 5 years from first
operation) for cargo volumes to grow to their full potential. This can be attributed to
the time taken for 1) businesses to realise the opportunities presented by the
availability of nearby port facilities, 2) germinate the idea and mobilise resources and
3) setup and establish full operational capability.
At the start of operations at Lamongan Shorebase, all the focus was on supporting the
Oil and Gas industry and commercial cargo was not promoted or marketed. In the first
year, 100% of business was for Oil and Gas support.
Now, 6 years into operations, the cargo volumes are 70 % commercial to only 30% for
the Oil and Gas industry. This growth came mainly in the 3rd to 5th years of operations,
as we realised this potential and started promoting commercial cargo business.
Since 2006, at least 10 businesses have commenced operations around the Shorebase
purely because of the access to port facilities. These include fertiliser factories, cement,
coal trading, fabrication and importation of tracked vehicles into Indonesia. The
pipeline of new businesses include a major Soya Bean and Soya Bean Meal hub for the
worlds largest Soya Bean producer as well as a seamless pipe manufacturer.
The customers for commercial cargo at Lamongan Shorebase are as far out as 100km
from the port.
The recommendation for the Suai Supply Base is therefore to establish this regular
connectivity as early as possible. This will bring forward the ramp up period for cargo
volumes. Increased cargo volumes mean increased economic activity and the knock-on
effect of job and wealth creation for the community.

IV - 7
4.3.3. Fuel Supply

The construction activities require a large quantity of diesel and the EPC contractor
will have to import and store this fuel, initially in a barge and in permanent tanks
once they are available (within 12 months of construction start). The tank farm has
been designed to store diesel, gasoline as well as aviation fuel.
A large component of fuel costs is logistics. It would be costly to bring such large
amounts of fuel into Dili and truck it across by small road tankers. Moreover, the
conditions of the roads make this supply route a risky one.
By bringing in large volumes of fuel by barge, this will reduce the fuel cost of both
the construction of the Suai Supply Base as well as the local community and local
consumers will benefit from lower gasoline and diesel prices.
The benefit to the community will be the ability to scale up economic activity having
access to large supply and stable supply of fuel at reasonable prices.
4.3.4. Create a Timor-Leste East Java Business Forum
With the assistance of the Government of Timor-Leste and the Province of East Java,
the Suai Supply Base will act as a catalyst for the creation of a business forum to
promote greater Timor-Leste East Java trade links. This forum will help create
awareness of any potential business and trade opportunities arising from the liner
service. The city of Surabaya has a population of 5Million and East Java has more
than 30Million inhabitants.
Given that construction will be supported through Surabaya/Lamongan Shorebase,
there will be a natural forum already created. We only need to formalize it and bring
more publicity to it to maximize the benefits to Suai.

IV - 8
4.3.5. Encourage a Suai Darwin line

We foresee that there will be economic links between Suai and Darwin due to the
proximity of these two cities.
For example, we expect that Toll will commence fuel supply from Darwin to Suai and
other entrepreneurs will use Suai as a gateway for imported Australian goods and
foodstuff. When Australian and other industrialists become aware if this region with
abundant source of energy and available manpower, this will be followed bye
increased manufacturing activity in order to use Suai as a manufacturing base to sell
into Australia through Darwin port.
We can assist to create awareness of this potential by seeking a tie up with the
Northern Territories Business Federation.
4.4.
Socioeconomic Impact
The Suai Supply Base project will impact the lives of Timorese nationals in many ways.
We will look at the impact to the local community from different perspectives:
a) Population, skills development and employment
b) Economic contribution
c) Social conditions
d) Environment
4.4.1. Population, Skills Development and Employment

4.4.1.1.
Employment Summary
The construction of the Suai Supply Base at Suai will bring many employment
opportunities for Timor-Leste nationals.
-
During construction (over a period of 12 15 months)

o 30 persons at each quarry site will be employed for various functions
(security, drillers, rock movers, blasters, drivers and assistants for 15
dump trucks, etc)
o 20 persons at the river bed will be employed (security, rock movers,
drivers and assistants for dump trucks, etc)

IV - 9
o 200 persons will be employed at the Suai Supply Base site by the
contractors for general construction activities.
o 50 persons will be employed at the Suai Supply Base site for local
administration and security
Individuals trained in the various construction vocations (masonry,
electrician, carpentry, etc) will have job opportunities. This is however
only temporary. Once the construction of the Suai Supply Base is
completed, a large part of these positions will disappear and the
individuals will then need to seek continued employ at the other up and
coming projects or in general construction in the Suai area.
-
Preparation for Operations

o In the run up to commissioning, the relevant persons will need to be
identified by the Government of Timor-Leste to undergo training.
30 (3 for each managerial position) management trainees (18

24 months prior to operations)
120 150 vocational trainees (3 6 months vocational and

Supply Base specific training)
During Operations
o 200 to 250 locals working at the Suai Supply base. This will be staff of
all levels.
o 18 to 30 locals working at each MiniShoreBase leased by PSCs.
During the operations of the Suai Supply Base, the base will employ 200 220
Timor-Leste Nationals. These jobs will cover the full spectrum of a logistics
supply base operations, from security, logistics, port management and
maintenance through to finance, administration and human resources.
Moreover, each PSC in residence will employ an additional 18 warehouse and
port crew and 4 to 12 administration staff.
Indirect employment
We expect the indirect impact to be an additional 1,000 other support jobs
within the Suai area. This will be in the ancillary support industries for the
provision of accommodation, food and beverage, recreation, transportation
and other services to support the migrant workers to the Suai region.

IV - 10
Industrial estate
The largest job creator by far will come from the impact that port facilities at
Suai will have on industry in the south. If the Government of Timor-Leste
builds an industrial estate next to the Suai Supply Base as recommended, it is
this estate that will create the largest number of employment opportunities,
fueled by the business opportunities generated by the Suai Supply Base. A
typical mid-sized garment factory employs upwards of 3,000 people. An
industrial estate of 250Ha can create more than 10,000 jobs, assuming every
hectare of industrial space has 40 workers (this is a very low estimate).
450
PSC MiniShoreBase
Supply Base Operations
400
Skills Development Program

Construction - EPC Sub Con
350
Construction - EPC Main Con
300
250
200
150
100
50
17
3Q
17
1Q
16
3Q
16
1Q
15
3Q
15
1Q
14
3Q
14
1Q
13
3Q
13
1Q
12
3Q
12
1Q
3Q
11
Chart IV - 1 : Direct Employment Opportunities for Timor-Leste Nationals

IV - 11
4.4.1.2.
Human Capital Development
During the course of their work in the construction of the Suai Supply Base, the
workers will be acquiring experience and skills that they would not otherwise be
exposed to (Quarry blasting works, breakwater and jetty construction, etc). These
experiences and skillsets will greatly improve their marketability for future roles.
The oil and gas industry has been identified by the Government of Timor-Leste as a
strategic enabler to jumpstart the economy in Timor-Leste and specifically in the
southern regions. The provision of 200 to 220 new jobs in the Suai region for the oil
and gas industry is a great benefit for the local economy. It will upgrade the skills of
the local manpower, increase the purchasing power of the Timorese nationals and
inject much needed cash into the local economy. This skilled workforce then also
becomes available to other industries and oil and gas players who currently
experience a shortage of manpower in these areas. A more skilled workforce helps
the community attract a higher level of business investment and target specific types
of industry investments.
This skills development plan for the Suai Supply Base itself will take 12 to 24 months
to complete. As these positions are likely to be highly sought after, the process of
selection should be a rigorous one to ensure the right individuals are identified, with
high levels of work ethics and commitment. However, it is also possible that not all
candidates are able to complete the training programs successfully. The competitive
nature of the selection process should be properly communicated to the candidates
and there should be provision for candidates who fall short of the mark during the
training to downgrade and still find a suitable position at a lower level. Local
vocational institutes will need to develop additional curriculum (or work with an
external party to do so) to train students in the areas required at the Supply Base
(e.g. riggers, welders, heavy equipment operators, mechanics, etc).
Three to six months prior to commissioning of the Suai Supply Base, a training centre
will be set up at the Suai site. The centre will focus on validating the vocational skills
of Suai employees and providing oil and gas standard supplementary training for
several trades such as crane and forklift operators, prime mover drivers, mechanics,
maintenance personnel, riggers, security staff, etc.

IV - 12
4.4.2. Economic Contribution

4.4.2.1.
Direct Expenditure
The Suai Supply Base project will spend an estimated US$150M in Timor-Leste during
the construction phase and US$4.5M annually from their operating budget. This will
be a great stimulus to the local economy.
- An estimated 40% of the EPC contracts will be awarded to local contractors
for works and services to be performed in the construction of the breakwater
and Supply Base facilities as well as for purchase of local supplies and
materials.
- Over the 18 - 24 month skills development program, the project is expected
to spend US$2.2M in wages to hire and train the necessary employees who
will subsequently staff the Suai Supply Base.
-
An estimated US$4.6M of annual Opex spending will benefit the local TimorLeste economy. This includes wages and purchase of local supplies and
services. This is only the direct impact of the Suai Supply Base and does not
include indirect expenditure from expats and PSCs. Assuming an average
national savings rate of 10%, the economic multiplier effect on the economy
could be as much as 10 times this value.
Each PSC in residence at the Suai Supply Base will spend in excess of US$1M
per month in the local community on supplies and services to support their
production platform.
$50,000,000
Land and Marine Structures
$45,000,000
Breakwater and Earthworks
$40,000,000
Project Management
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
3Q 11
4Q 11
1Q 12
2Q 12
3Q 12
4Q 12
1Q 13
2Q 13
Chart IV - 2 : Project Capital Expenditure in Timor-Leste during Construction

IV - 13
4.4.2.2.
Value creation
The expenditure by the operator of the Suai Supply Base, the PSCs and different
foreign investors will benefit the economy significantly. However, the single most
important factor that will benefit the Government and the people around Suai is that
the land value around the Suai Supply Base, the adjoining industrial estate and the
Suai city will appreciate tremendously in value.
Land Value around Lamongan Shorebase
The Government of East Java first acquired the land for Lamongan Shorebase in 2004 at
US$1.50 /m2.
Currently, land within the Shorebase is leased on a monthly rental of US$2.50 /m2 and
sold with 30 year leases at US$150 to US$200 /m2 (depending on the size of the plot).
This is a 100 times appreciation on original land value.
Land outside of the Lamongan Shorebase has also appreciated considerably in value.
Within 5km of the Shorebase, the value of the land is US$60 / m2 and within a radius of
20km, land has now been transacted at US$30 /m2, or 20 times its original value.
It is imperative that the Government of Timor-Leste acquire all the land identified at the
Suai site as early as possible, and before construction at Zone A.
Zone C
Zone B
Zone A
Figure IV 1 : Suai Supply Base Site Allocation

The Government of Timor-Leste is then able to develop Zone C (255Ha) in phases as an
industrial estate. The revenue generated from the sale of land will be able to cover the
capital costs of the Suai Supply Base project.

IV - 14
4.4.3. Business Opportunities

4.4.3.1.
Construction Industry
Contracts given to local contractors for construction services will help them fund
their purchase of new equipment and expand their businesses. The availability of the
LCT run for import of this equipment will further help reduce the cost for the local
contractors. However, the contractors should be mindful of their capacity to absorb
such expansion once the Suai Supply Base project is complete.
The new gravel quarry access roads can be used even after the completion of
construction works. This will provide new roads in the area, linking to the main trunk
road. They also provide the means for others to continue to exploit the quarry
locations. These quarries should continue to be operated thus bringing new
capability to the construction industry in the region.
4.4.3.2.
Hospitality and Food & Beverage, General Trading and Supplies
Local businesses will need to grow to accommodate the migrant workers for lodging
and food. Access to the LCT run from Suai to Lamongan will allow local
entrepreneurs to have easy access to overseas supplies and export markets of East
Java.
Access to port capable of handling commercial cargo will significantly reduce the cost
of supplies and promote entrepreneurship. This same access will also make local
produce more competitive on the international market.
The regular run between East Java and Timor-Leste will also include a tanker ship.
This means diesel and gasoline will be available at lower prices. More importantly,
this will provide a stable supply of diesel to the region 365 days a year.

IV - 15
When operations commence, there will continue to be a good demand for

accommodation and food and beverage as a result of the migrant workforce and
increased visitor traffic. Quality business oriented and long stay accommodation is
generally in short supply. In addition, there will be an increased demand for a broad
range of other retail goods not currently on offer or offered in limited supply in the
Suai area. Fuel and sundry goods retailers are expected to benefit from increased
trade. Similarly there will be an increased demand for services across the broad
spectrum.
In tandem with the development of the Suai Supply base, overall infrastructure in
the region is likely to improve significantly. Road infrastructure around Suai City, to
Dili and across the Suai-Betano-Beaco corrider will be improved. This will make all
these areas more accessible and reduce travel time and costs. Improved access to
local and regional markets and towns will grow local businesses and increase
household income.
4.4.3.3.
Foreign Investment
With more skilled labour and small businesses available, this will promote business
investment into the region and in turn further upgrade the workforce and grow the
local businesses. Improved infrastructure and access to telecommunications
backbone will attract small and medium based businesses to setup and respond to
the local business community needs. This, coupled with the access to a port and
regular lines to East Java and Darwin, will attract Australian and Indonesian investors,
especially in the industrial estate to be built.
The Suai Supply Base will launch Timor-Leste as a player in the Oil and Gas industry.
As such, the success of the project is of great national interest. Moreover, with the
success of such a public sector private sector partnership in Timor-Leste, other
investors will start looking at Timor-Leste more favourably and financial institutions
lower their risk profiles for projects in Timor-Leste. International infrastructure
investors will see more potential in Timor-Leste and wish to develop other public
sector private sector partnerships.
With all these developments, the oil and gas community will believe that the
Government of Timor-Leste is committed to growing the oil and gas industry and this
in turn will entice them to bid for the remaining open exploration blocks. The

IV - 16
availability of a supply base at Suai will make logistics for offshore exploration and
production activities less costly than operating from Dili or Darwin. Discoveries
previously considered too costly to exploit can be re-evaluated and found feasible as
a result of the shorter supply chain from the availability of the Suai Supply Base and
full integrated services.
With the existence of this south facing port and industrial estate development, Suai
and the Southern regions will continue to grow and attract investment opportunities.
Suai will become the centre for economic development in the south. In addition, a
large number of expatriates will live in Dili or Suai to provide skills transfer and
manage the foreign investments in Timor-Leste.
The port facilities and infrastructure improvements will open opportunities in other
industries, for example agriculture, fisheries, manufacturing, mining and
construction.
4.4.4. Social Conditions

4.4.4.1.
During Construction
The dedicated access roads to the quarries have also been selected to avoid
habitation in general however it is unavoidable that the route will go through some
habitation and/or agricultural plots. This needs to be properly communicated to the
affected parties and adequate compensation provided. Some agricultural plots may
need to be cut in two or removed altogether. Habitation along the way will get
access to the new road once the construction is complete. Because of the heavy
vehicles, it is not desirable to build the road through or alongside habitation.
During the full duration of the breakwater construction, dump trucks will be plying
the access roads, on many occasions 24 hours a day. Timorese nationals are not used
to such heavy traffic and such heavy vehicles. Local villagers that are affected and
especially children should be properly educated and warned.
Even with the highest of HSE standards, there is always the risk of a worksite or
construction accident. This will need to be managed swiftly, openly and in a fair
manner should such an eventuality arise.

IV - 17
4.4.4.2.
During Operations
The Suai Supply Base will be operated 24/7. This is a new concept to many of the
local businesses and population. Some of the mindset needs to change to
accommodate this. There basic services should be made available to the staff of
require them outside of standard office hours (i.e. transport, general supplies, etc).
Vehicular traffic will increase on the main access roads. As many of these are by the
side of local habitation, there is also an increased risk of accidents. In many areas,
with the current volume of traffic and size of the roads, there is still no need for
more sophisticated traffic management measures (i.e. traffic lights, pedestrian
crossings, roundabouts on approaches to villages/towns, etc). However, as traffic in
the major crossroads increase, there will come a time when this becomes necessary.
However, better access to health facilities, ease of travel to schools, etc all improve
the standard of living.
With the 24/7 operations of the Suai Supply Base, traffic will also be plying the main
routes 24 hours a day. On many of the roads, night time travel is not safe and this
needs to be addressed. Also, increased night traffic will bring noise pollution to
habitation in the vicinity of major trade routes. The amount of traffic will be
significantly affected by the extent and rate of development of the general industry
around Suai.
The new facilities available at the Suai Supply Base also bring many benefits to the
region. The availability of a sheltered basin and port will improve overall maritime
safety. The Reverse Osmosis system can be used in any emergency to provide fresh
water to the population. Access to a public internet facility, thus technology enabling
Timorese nationals, will also greatly benefit the community. In general, the Supply
Base infrastructure like liquid storage tanks and RO water system and LCT liner
connection can also provide support to the local community, either on a regular
basis or as an emergency backup.
The new community centre will provide improved recreational programming. The
local population will have the opportunity to integrate recreational activities at the
centre, thus allowing them to create new or reinforce existing community linkages.
Local rallies and events can be organized at the community centre or soccer pitch.

IV - 18
The availability of a heli-pad at the Suai supply Base location will facilitate the visit of
important visitors and officials. This will promote government communication as
well as investor access to the region.
In any rapidly changing environment like the one we are witnessing here, there will
be Timorese nationals who are set in the old ways and resistant to change. The
project needs to be communicated early to the local community, with clear
articulation of the impact to them, both negative and positive. Regular updates
should be provided.
4.4.4.3.
Transmigration of workers
As a result of increase economic activity in the Suai district, and the availability of
jobs and business opportunities, there will be migrant workers from other regions in
Timor-Leste who move to the Suai region.
-
Available manpower to staff this and upcoming projects
Further boost the hospitality and supplies sectors
Expand benefits from this project beyond the Cova Lima district
Provide diversity in skills and experiences for potential employers
Help develop intra-national transportation industry
4.4.5. Environment
During the construction, there will be 2 quarries operating and 1 river bed
excavation site. This will involve blasting, generally during day time hours, several
times a day. This will generate noise and dust for any villages in the surrounding
areas. Even though the quarry sites have been selected to be far from habitation in
general, should there be any in the vicinity, they will need to be warned and
educated. Quarry sites should be adequately cordoned off with adequate safety
zones. There may be some damage to any nearby buildings from the blast
shockwaves.
At the river bed site, there will be new access roads to move the sand and gravel.
The excavation will muddy the waters downstream during the period of work.
However, this will reduce the risk in future of the river flooding during periods with
high water levels.

IV - 19
At the sea, the area designated for the breakwater will have restricted access for
vessels. The waters around the breakwater construction will look muddy due to the
dumping of sand and gravel. There will however be no permanent impact on the
water quality nor will it affect marine life once completed.
The general construction of new gravel roads will provide better access to habitation
and agricultural land along the route of the roads once the construction of the
breakwater is complete. This will also increase the value of such land.
4.5.
Recommendations
The study team has the following recommendations to mitigate any risk of negative
socioeconomic impact from the Suai Supply Base and to maximize the benefits.
Construction
-
Ensure the quarry sites are adequately surveyed and cordoned off prior to
commencement of blasting works. Once the construction phase is complete,
the Government of Timor-Leste should explore the possibility of continuing
operations at these sites as permanent quarries. This will help alleviate the
risk of employment losses but also provide additional capability and capacity
for the construction industry in the southern regions in preparations for
upcoming projects.
Work with government to administer the allocation of land to construction

and roads. The quarry access roads route should be cleared with the relevant
agencies early and all affected parties informed. Similarly for the Suai Supply
Base site. Deploy road marshals at high volume activity areas.

IV - 20
All buildings and assets that may be affected by the blasting or construction
activities should be subject to a pre condition survey. Any damages as a result
of works by the project should be repaired.
The project team should work together with the local contractors to assess
what the local economy can reasonably absorb when awarding contracts that
require substantial asset capitalization. If this exceeds their capacity to retain
after the project, then such equipment should be brought and re-exported
after the project.
Have first aid station available throughout the construction and ensure the
relevant supervisors on the ground are familiar with access to medical
facilities in Suai and the Suai hospital. Work with the Suai hospital to ensure
the right medical expertise is available for the nature of industrial activities
being developed in the region.
The project team should promote the transfer of skills for specialty
construction works during the course of the construction (i.e. operating of
boring equipment during quarry blasting, construction of breakwater, etc).
Integrate the demobilization of construction personnel with the mobilisation

of the operations team to minimize impact on ancillary services provided by
the local community (e.g. accommodation, supplies, etc)

IV - 21
Operations
-
The main trunk roads between Dili and Suai, around the Suai region and
along the Suai-Betano-Beaco corridor should be upgraded and provided with
24hr capability. Wherever possible, main trunk road where volumes of traffic
are expected to grow should bypass urban centres. Alternatively, any
habitation should be setback from the road and adequate traffic
management measure put in place.
The Government of Timor-Leste should engage a qualified company with

experience in the oil and gas industry to commence the skills development
early. This company should work with local training and vocational institutes
to validate upgrade their curriculum and training programs. Where training is
not currently available, the company should help develop the necessary
training curriculum. The Government also should work with the local
institutes and scholarship programs to identify good candidates to enter this
program.
The operator of the Suai Supply Base should consider setting up their own
programs for community development in the Suai district to build their
corporate image with Timorese nationals.
Explore what measures the Government can put in place to help the services
industry in and around Suai to develop in the short term. (specifically in
business accommodation, food and beverage and sundry supplies)

IV - 22
Build an industrial estate adjoining the Suai Supply Base as a platform to

encourage entrepreneurship.
o This will provide a platform for local SMEs to start up and grow in
tandem with the southern regions development.
o There are many cost advantages of having easy access to the port and
the road network. Consolidating these businesses in a one area also
has operational synergies from infrastructure support (power,
telecommunications, fuel, etc) to being in close proximity with their
suppliers and customers.
o The construction of this estate should commence 12 months after the
commencement of the construction at the Suai Supply Base. In this
way, this construction activity can take up the slack as the work at the
Suai Supply Base winds down. This gives adequate time for potential
investors to see that the Government of Timor-Leste is serious about
building a port facility in the south that can operate 365/24.
o Promote this industrial estate with road shows in Dili, Surabaya and
Darwin.
o The Suai Supply Base and the industrial estate enter into a symbiotic
relationship. The port facilities attract foreign investment and local
SMEs. The increase in industrial activity contributes to cargo volumes
at the port.
o The added jobs created and economic activity will cement the
benefits in hospitality and services sectors in Suai.
o It is recommended that the Government of Timor-Leste establish an
entity to plan, manage and deliver industrial property solutions to
businesses wanting to setup operations in Timor-Leste. This entity can
not only manage the industrial estate adjacent to the Suai Supply Base
but also the ongoing industrial projects in the Suai-Betano-Beaco
corridor. As example of such an entity is Jurong Town Corporation in
Singapore.

IV - 23
Acknowledgements:
We gratefully acknowledge the presence and inspiration of his Excellency Kay Rala Xanana
Gusmao at Lamongan Shorebase during the Shorebase Orientation Course.
His Excellency Kay Rala Xanana Gusmao was accompanied by:
His Excellency Pedro Lay da Costa, Minister for Infrastructure

His Excellency Manuel Serrano, Ambassador to the Republic of Indonesia
Francisco da Costa Monteiro, Petroleum Executive Advisor to the Secretary
of State for Natural Resources
We gratefully acknowledge the guidance provided by His Excellency Alfredo Pires, State
Secretary for Natural Resources.
We like to also acknowledge the following persons for their assistance and time during the
period of this study:
The SERN team:
Francisco da Costa Monteiro

Elga Pereira
Vicente Lacerda
Joao Camara
Francisco Ferreira
Joaquim Amaral
Johny Leite
Luis Martins
Vicente Pinto
Helder Freitas
Domingos Lequisiga Maria
Tomas Talo Freitas
Leonel Hornai
Farid Alkatiri

I - 21
Autoridade Nacional do Petroleo:
Gualdino da Silva, President

Jose Goncalves, Director-JPDA
Rui Soares, Director - Development & Production
The oil companies operating in Timor-Leste:
ENI Timor-Leste, Tony Heynen, Country Representative

Conocophillips Timor-Leste, Peter R Smith, Country Manager
Oilex, Rajesh Padmagiresan, JPDA Project Manager
Reliance, Arabinda C Pati, Base Manager
We would like to congratulate the following for having completed the Shorebase Orientation
course and obtaining international certification for Oilfield Sea Survival.
Vicente Lacerda
Joao Camara
Francisco Ferreira
Joaquim Amaral
Johny Leite
Helder Freitas
Bambang Gunawan
Figure I 3 : Photos during the Shore Base Orientation Course at Lamongan Shorebase

I - 22
Report of the Shorebase Orientation Course on 26 and 27 Oct 2010

Course Participants:
1
Vicente Lacerda
2
Joao de O Camara
3
Joaquim de Jesus Amaral
4
Francisco Ferreira
5
Helder S Freitas
6
7
Joni S Leiti
All participants were issued with their own Personal Protective Equipment (PPE),
consisting of 2 sets of overall, a safety helmet, a pair of safety shoes, and a pair of eye
goggles at the start of the course.
Course Program:
1. HSE in Oilfield, by Yudhi Feri Kurniawan, HSE Manger.
The course is to give entrants to the oil and gas industry an understanding of the
HSE environment, the tools used to manage HSE, common HSE activities and
terminologies.
2. From Seismic to Well Shut Down, a Logistics Perspective, by Peter Short, of
PMC Oilfields, a senior logistics consultant to Eastlog,
The course takes participants through a typical cycle from Seismic acquisition,
exploration drilling, appraisal drilling, project development of the field,
production drilling, early production activities, work overs, and well maintenance,
production support activities and finally, well shut down and demobilization. At
each stage of these cycle, the relevance of the Shorebase is explained.
3. Presentation of Shorebase Facilities, by Robert Sim, Director of Eastlog.
This presentation shows what each facility looks like, its purpose and gives some
visual impression for participants as to what type of facility or service looks like.
4. Sea Survival Course, by third party safety consultant, approved by BPMigas, the
Indonesian oil & gas regulator for upstream activities.
This is a 2 part course; Part 1 - a class room to familiarize participants with the
safety equipment and procedures. Part 2 a practical drill, where participants are
required to demonstrate the skills in the sea evacuation drill.
The drill was witnessed by H.E., Prime Minister of Timor Leste. All participants
from SERN passed this course, and were awarded certificates. These certificates
are recognized by all the oil & gas companies, and these allow the participants to
work on offshore facilities.
5/5/2011
List of Typical Facilities and Services

Commercial Team
Facilities and services

required
Core Shorebase Activities
Warehousing
General Admin
Offices and Admin B uilding
- General Cargo
Procurement
- Chemicals and Dangerous Goods
Business Support Services
- Cold Room
Telecommunications
- Explosive
Catering and Reefer / Chiller area
Training and Conference Centre
Service and Support Activities
Bulk and Mud Plant
Heavy Equipment rental and services
Crew Change Room
Cleaning Area
Medical and Medivac
Inspection & Certification services
Bunker and Fueling facilities and services
Fabrication workshop
Transit yard and equipment staging area
Blasting / Painting Area
Casing / Tubing maintenance facilities
Freight forwarding
Fresh Water Production
Rig maintenance and repairs
Waste Management Services
Customs
Oil Spill equipment and services
Industrial Gas services
Security
Sling fabrication workshop

Dock for rig maintenance and repair

Engineering Design (FEED) Appendix C2
Slide No.: 2
5/5/2011
Office Building
Objectives :
This will provide a central location for all offices, both for
the base staff as well as for all customers. The offices can
be leased by PSCs or any service providers and will facilitate
overall management and communication with
suppliers/customers.
Services provided:
All offices will come with basic office amenities, utilities. As
an option, administrative services can be provided,
depending on customer demand.
SUAI Approach:
Office space will be built for the base team as well as for
rental to PSCs and any service providers and suppliers that
need it. One third will be occupied by the SUAI Supply Base
team and two thirds allocated for rental.
Building / Infrastructure :
Office building with 2 or 3 floors.

Slide No.: 3
Warehousing
Warehousing
Objectives :
There will be a crucial need for warehouse facilities within
the SUAI supply base to support the O&G operations. The
following warehousing needs have been identified.
General Cargo
Chemicals
Cold Storage
Reefer / chiller
Explosives storage (optional)
As the requirements and approach for each of these cargo
types are different, we will cover each one seperately.
-

Slide No.: 4
5/5/2011
Warehousing
(General Cargo)
Objectives :
To provide warehouse facilities for O&G operations onsite at the
supply base.
Services :
Warehouse management (from base team)
Warehouse space (per warehouse of 1000m2)
SUAI Approach:
The buildings can be phased in based on volume projections.
However, land space should be allocated to for future expansion.
Central warehousing will also be provided for the base
requirements and also for service providers/suppliers (that
require smaller storage capacity).
Building / Infrastructure:
Covered warehouses

Slide No.: 5
Warehousing
(Chemicals)
Objectives :
It is desirable to centralise the storage of all chemicals and dangerous goods. This will
allow better control of these items and reduce the risk of any accidents.
Services :
Warehouse services and management as required by international standards for
Dangerous Goods storage.
Appropriate safety procedures and facilities in place (i.e. HSE equipment, medical and
accident abatement facilities, administration of MSDS and GHS marking, etc)
SUAI Approach :
Customers can request for dedicated areas inside the chemicals warehouse (available
for rental)
To be operated and managed by the SUAI Supply Base team. Security also to be
provided by the SUAI base security.
Chemicals Warehouse with a good ventilation system, spill control, fire protection, etc)
The building should also be protected from heavy rain or flooding.
Regulation:
The GTL needs to advise on all relevant laws and policies regarding handling and
storage of chemicals and hazardous goods.

Slide No.: 6
5/5/2011
Warehousing
(Cold Storage)
Objectives :
To be able to store at SUAI supply base all necessary items
that also require air-conditioned or temperature controlled
storage (i.e. rubber seals, electronic spare parts, etc)
Services:
The facility, like the DG warehouse, be managed by the SUAI
Supply base as one of the base facilities.
SUAI Approach:
A section of the Centralised General Warehouse can be
allocated for this purpose. This will be managed by the SUAI
warehouse team. This section can be further subdivided for
differing storage temperature requirements, or based on
customer demand for dedicated space or item segregation.
Building / Infrastructure
It is envisaged that this room will be between 100 to 150m2
and be located within the General Warehouse facility.

Slide No.: 7
Warehousing
(Reefer & Chillers)
Objectives:
To provide an area for storage/placement of reefer and chiller
containers to facilitate the provision of fresh and/or frozen food for all
offshore operations. This is intended to allow the customers/service
provider to administer their supply chain of such products to support
up to 7 days of drilling activities.
SUAI Approach:
This will be managed in conjunction with the catering service provider.
Example of supplier :
Indocater, Sodexo
Concrete slab (able to support loading/unloading by crane for cargo up
to 20 tons)
Plots for 10 and 20 containers (against corrosion)
Adequate electrical supply (with backup)

Slide No.: 8
5/5/2011
Warehousing
(Explosives)
Explosive Bunker (Optional)
Objectives :
To provide a secure and safe storage area for all explosives used
during the drilling campaign (and for mining activities)
Services :
Transportation, storage and loading/unloading of explosives.
Security and control of all explosive items.
Dahana in Indonesia (Explosive management)
SUAI Approach:
Space will be set aside for this purpose. However, the construction
will depend on user/customer requirement.
- 2 small warehouses (10m distance between each warehouse)
- Protective wall / structure (earth/sand)
- Barbed wire, CCTV and security
Regulation:
The GTL needs to advise on all relevant laws and policies regarding
handling and storage of explosives.
Slide No.: 9
Bulk and Mud Plant

Objectives :
To provide a centralized bulk and mud plant unit for all
the O&G customers.
Example of supplier : Halliburton
SUAI Approach:
The infrastructure will be provided on site and leased to
a 3rd party service provider who will manage the facility
and provide the services to the PSCs. We will work
closely with the service provider during the
construction phase to jointly develop this.
Building / Infrastructure (Example):
Mud plant services
Cement silos : 4x 3000cf
Barite silos : 2 x 3000cf
Bentonite silos : 2 x 3000cf
Mud tanks : 4 tanks
Compressor area protected with exhaust aeration
Cutting pot area protected from wind and rain
Flow lines (with meters) for delivery to vessels

Slide No.: 10
5/5/2011
Heavy Equipment rental

Objectives :
To provide at SUAI supply base all the necessary mobile and
fixed heavy equipment for onshore and offshore operations.
SUAI Approach:
Provide (on call) all forklifts, mobile or crawler cranes, trucks,
trailers, low bed trailer, flat trucks.
Provide (on call) all generators, compressors and scaffolding
Certification :
All these equipment will be regularly inspected and certified by
a 3rd party service provider. This will also reduce down time
due to equipment breakdown and minimise the risk of
accidents.

Slide No.: 11
Water Production Facility

Objectives :
To be able to provide enough water for all drilling operations supported
from SUAI supply base.
Services :
Production of fresh water from the desalination of sea water using the
reverse osmosis process.
SUAI Approach:
An estimated production of 300m3 per day with a storage capacity of at
least 800 m3 is envisaged. If necessary, this capacity can be increased to
provide for additional fresh water demand from the southern region of
TL. The facility will be operated by the Maintenance Team of the SUAI
Supply base.
- 2 storage tanks of 400m3 each
- Storage area
- Chemical disposal area (with dedicated drains)
- Sun protected RO plant

Slide No.: 12
5/5/2011
Crew Change Room

Objectives :
To be able to manage all crew changes (offshore
base offshore) at SUAI supply base itself.
Services:
Lounge facilities for Oil & Gas staff, the staff of
Drilling companies, their suppliers/contractors and
sailors. Basic refreshments, resting areas, smoking
area and Audio/Video facilities, including a safety
induction room.
SUAI Approach:
It will be provided and operated by the SUAI
supply base operation and security departments
A crew change building next to the General Office
will be allocated for this.

Slide No.: 13
Waste Management
Services
Objectives :
To create a waste management treatment center, which can then be
used for all Timor Leste (South) industrial activities (O&G, Refinery,
LNG plant, Mining, hospital, public waste, etc)
Only B3 waste which can not be treated at this plant, will be
forwarded on to Indonesia PPLI treatment plant.
Example of supplier : PPLI WMI
SUAI Approach:
The infrastructure will be provided on site and leased to a 3rd party
service provider who will manage the facility and provide the services
to the PSCs. We will work closely with the service provider during the
construction phase to jointly develop this.
warehouse with dedicated drainage system
open cover area
yard with concrete slab or asphalt and fence
Offices near the warehouse
Area with drum cleaner and crusher
incinerator
Regulation:
The GTL needs to advise on all relevant laws and policies regarding
waste management and associated services.
Slide No.: 14
5/5/2011
General Cleaning Area

Objectives:
All ccu will be cleaned at a central location. This will
provide for better control and management of dirt,
waste and any effluent.
SUAI Approach :
This area and the facilities will be provided. All users,
contractors, customers and/or service providers can
lease it as necessary.
Concrete slab with dedicated drainage system
Protective wall
Shelter for water compressor
Water supply (hot and cold)

Slide No.: 15
Inspection/Certification
Services
Objectives :
To provide the necessary 3rd party inspection and certification services
required by the Supply base operations as well as to support the
customers Offshore drilling programme.
Services proposed :
all NDT (MPI, RT, UT, Xray, Eddy Currant, etc)
lifting gear inspection
heavy equipments inspection
pipes (casing, tubing, drill pipe,...)
HSE equipment (extinguisher, alarm, life boat, life raft, etc)
Infrared thermographic inspection
Pressure testing (valves)
SUAI Approach:
A 3rd party service provider will be engaged to provide these services at
the base. He will be provided with the necessary infrastructure to.
Small Office
Dedicated Pipes inspection area (with special drainage system)
High pressure test room (30-50m2, reinforced walls and roof)
Slide No.: 16
5/5/2011
Oil Spill Response

Eqt / Services
Objectives :
To provide a central coordinator for all Oil spill equipment
and response team. This will be more efficient and cost
effective for customers who can lease the equipment
directly at the base and in a timely manner.
Services :
- Oil spill boom, skimmer, tanks, chemical etc
- Quick deployment (offshore - onshore)
- Trained response team
Example of Operator : OSRL
SUAI Approach:
The equipment will be provided on site and leased to
customers. The response team will either be trained and
operate as part of the SUAI team or an external service
provider will be invited to provide this service.
- Standby wharf for boat
- Fully equipped containers (with equipment and
operational office for quick offshore deployment)

Slide No.: 17
Industrial Gas Services

Objectives :
To be able to provide all industrial gas necessary for the
drilling programme directly from SUAI supply base. This will
minimise any delays in industrial gas supply and allow the
necessary quality control for vessels (tank, isotank, bottles,
etc), storage and transportation.
Type of gas to have in stock :
Oxygen, Acetylene, N2 (offshore), Helium (workshop),
Butane, CO2, Freon, LPG, production gas (around 10).
SUAI Approach:
Option 1: Find and develop a local supplier to meet
international standards.
Option 2: Bring in the necessary gas and provide this service.
-open secured warehouse with separators
- small open secured yard (for ISOTank)

Slide No.: 18
5/5/2011
Sling fabrication
and testing
Objectives :
To be able to provide all the necessary slings to the SUAI
Supply base customer without delay and maintaining all
International safety standards.
Services :
Fabrication of wire slings and webbing slings.
Testing and certification for offshore usage.
This can be provided by the SUAI workshop team
- 100m2 Workshop with gantry crane (5 tons)
- Protected area for pull testing unit
- Small office
- Warehouse for raw materials and finished products

Slide No.: 19
Fabrication Workshop
Objectives :
To provide fabrication services needed by the O&G
customer directly onsite at SUAI supply base.
Scope of services :
Baskets, racks, mini containers, drill cutting boxes, tanks,
custom work, etc
SUAI Approach:
Option 1: Find and develop a local engineering company to
provide this service.
Option 2: Build a team as part of the SUAI Supply Base team
to provide this service.
Small office + 1 cool room for tools
Workshop with gantry crane (10 MT) and one small
warehouse
Yard with concrete or asphalt flooring (for forklift or crane)
and fencing.

Slide No.: 20
10
5/5/2011
Blasting & Painting

Objectives :
To provide a safe and efficient area for the maintenance of
light steel structures (baskets, racks, reels, mini containers,
etc) travelling between SUAI base and the offshore location.
SUAI Approach:
This can be integrated with the fabrication workshop.
Concrete slab (10m x 10m with concrete wall (4m high)
Ventilated shelter for sand blasting compressor
Open covered storage for sand
Ventilated small warehouse for paint storage

Slide No.: 21
Fuel Storage and

Refueling Services
Objectives :
Provide vessels / vehicles calling at SUAI supply base with refueling capability.
Services:
Storage of Bunker and light fuel oil. Capability to refuel vessels/ships berthed at
SUAI as well as vehicles in the south of TL. Possibility of suppling aircraft fuel to the
airport as well.
Double way piping system from Jetty to Tank / tank to jetty with certified/calibrated
flow meter
Storage tanks ( 2 times 3000 m3 and smaller tanks)
Special drainage system,
Protection wall
Foam firefighting fix unit with AFFF tank
Pump station for vehicles refueling with calibrated flow meter
Pump station for tank truck easy/fast loading
Regulation:
The GTL needs to advise on all relevant laws and policies regarding fuel storage and
distribution.
Slide No.: 22
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5/5/2011
Freight Forwarding
Objectives :
To provide SUAI supply base and the Airport with professional and global freight
forwarding services.
Services :
- Multimodal transport
- Custom and Regulatory compliance
- Projects
Example of operators : SDV (worldwide O&G involved)
SUAI Approach: Outsource to 3rd party service provider
Building required :
Inside SUAI base, an office, yard & warehouse
At the Airport : 1 office

Slide No.: 23
Sourcing/Procurement
Services
Due to the remote location of the SUAI supply base, it could be
difficult for the Oil&Gas operators to purchase supplies in the
timeframe that their operations needs require.
The SUAI supply base can provide onsite stock of the more
frequently used supplies to facilitate replenishment for their
customers. For more specialised items, the SUAI team can assist
their customers in the sourcing, procurement and logistics.
Some more typical items to be stocked onsite:
HSE: helmets, safety shoes, gloves, goggles, extinguishers, life raft,
mask, gas detector, etc
IT & Telecom equipment: computer, printer, cartridge, VHF
handset, radar, etc
Fabrication and piping : welding rods, etc
Lifting gear : shackles, etc
Engine Oil : stock at SUAI from a major supplier (e.g. Total, Shell)
Chemicals : stock at SUAI (after customer needs survey) from a
major supplier (e.g. Nalco)

Slide No.: 24
12
5/5/2011
Training / Conference
Centre
Objectives :
Provide the facilities for SUAI base team to provide
internal training. This will ensure the team is able to
provide world class service to their customers. These
facilities can also be used by their customers for
conference/training activities.
Services :
The training center could be composed of 2 parts:
Technical training / Office training
Technical training:
Firefighting, Basic sea survival, H2S, NDT certification,
lifting operations, Welding
Office training :
ISO 9001, 14001, OHSAS 18001, ISPS, Nebosh,
Computer, English, Accounting, warehousing (SAP,
Maximo,..)

Slide No.: 25
Dock for rig

repair/maint.
Objectives :
To provide basic facilities for boat / rig heavy maintenance.
This will allow the SUAI supply base customers to perform
such maintenance on site rather than go to Australia or
Indonesia (Surabaya) or Singapore.
Services:
At wharf, jack up and tender maintenance
Rig refurbishment
Cold & hot stack for rig
Vessel Rig Engine Overhaul
Hull inspection and maintenance
Manpower

Slide No.: 26
13
5/5/2011
Casing/Tubing
Maint Services
Objectives :
To provide SUAI supply base customers with the
capability to perform casing/tubing maintenance
onsite.
SUAI Approach :
Can be done by the inspection company as part of
their services.
- Inspection area 200m2
- 24/7 availability

Slide No.: 27
14
5/5/2011
UP & DOWN STREAM OIL & GAS INDUSTRY From

Seismic to Well shutdown - Distribution
PMC Oilfield
copyright
Slide No. 1
Examples of PSC
Slide No. 2
5/5/2011
Examples of Services companies
Drilling companies
Slide No. 3
Example of services companies

Mud/Cement/well testing
Wireline
Chemical
Wellhead equipment
And many others for:

weather forecast, pipe supply, food supply, logistics, HSE, inspections
Slide No. 4
5/5/2011
Oil & Gas process

Oil and Gas logistics providers to the Exploration and
Production
must
have
a
comprehensive
understanding of the chronology and operational
content regarding the various phases, which can be
highlighted as follow :
- Seismic (Geology/Geophysics)
- Drilling (Exploration/Appraisal/Development Production)

- Well service Down hole equipment (well testing, completion well
clean up, wireline,...)
- Construction (project, engineering, construction, commissioning
- Production (early production, pumping, separation, pipeline,
temporary storage)
- Distribution (storage plant, depot/refinery, supply chain up to the
common users or customers)
Slide No. 5
Oil & Gas process (cont)

An efficient logistics provider should have a sound understanding of the scope of
work and critical operational stages requirement, as well as the knowledge of
environment constraints for the above stipulated various phases,
Being able to take into account those three factors allow logistics to anticipate
the clients needs, as well bringing solutions along with maintaining a consistent
level of services.
Last but not least, logistics needs to have sufficient experience of the overall Oil
and Gas material to apply the industry standard practice in handling /
conditioning / storing / transporting the cargo.
Within this presentation you will find here under a brief description of each
various phases along with the respective shore logistics interface.
Slide No. 6
5/5/2011
Seismic (Geology / Geophysics)

Oil companies Geologist assess/study the history of the landscape, fossils, sedimentation
accumulation history. Based on their finding they will condude if there is a potential
of hydrocarbons (crude Oil/Gas) within the undergrounds formation
Based on their findings Oil companies will decide whether

Or not to bid to acquire blocks / concessions defined by
Respective country's government
On the Oil company has bid and been awarded to
operate a concession, geophysicist will then work
closely with the geologist data, to trigger seismic activities
Slide No. 7

(cont)
Slide No. 8
5/5/2011
Seismic (Geology / Geophysics) (cont)

Geophysicist will perform seismic studies to have 2 / 3 dimensions view
of the various underground formation layers (clay, limestone, sand, etc...)
Their goal is to find cracks / holes / pockets within the underground
Formation; reasons being hydrocarbons as a fluid / gas will get trapped
into those faults.
Seismic operations either offshore or onshore use the technology
to send and echoed sound waves into the ground (physical vibrations
using either electronic / explosives), which will be translated into
computerized data. This data will display a map detailing the underground
formation layers including the faults.
Locating the faults does not automatically means it will contain
hydrocarbons, as it could either be empty or have only water, and even
more complicated as hydrocarbons content may not have the initial
required criteria for production.
Based on geophysical / geology and reservoir engineers assumption, Oil
company decide whether or not to perform exploration drilling.
Slide No. 9
Seismic (Geology/Geophysics) (cont)

Once it is agreed to go ahead by the oil company
Management, geologist will spot the drilling location
and target depth to hit the fault / potential reservoir
within the underground formation layers.
Only drilling a hole within the underground formation
layers will provide the information as to what the fault
/ potential reservoir really contains (either empty, or
only water,...)
Slide No. 10
5/5/2011

Logistics side
Seismic operations do not usually require significant shore base
services.
Main focus relies on :
- Medivac
- Helicopter operational procedures
- Crew change
- Fuel, water, waste management,
- Sound communication with the site representatives as their
operations either linked to remote locations or offshore strict
constrains.
Slide No. 11
Drilling (Exploration / Appraisal /

Development Production)
Slide No. 12
5/5/2011
Drilling
w############################
Slide No. 13
Jack up Drilling rig
Slide No. 14
5/5/2011
Semi Submersible Drilling rig
Slide No. 15
Drill Ship
Slide No. 16
5/5/2011
Onshore Drilling Rig
Slide No. 17
Well Testing
When the rig drilling depth is within reach of the fault / potential reservoir
within the underground formation layers, a well testing operation could
be triggered. Also known as Well service Down hole equipment (well
testing, completion, well clean up, wire line )
During this operation hydrocarbons are

flared from the rig surface.
Slide No. 18
5/5/2011
Rig move
Once the testing is completed, the well will be plugged / sealed and a
corrosion cap will be put on the sea bed covering the drilled hole (abandoned
well).
The rig will be moved out of the location (supply vessels AHTS) and
contractually demobilised.
Slide No. 19
Rig move
Slide No. 20
10
5/5/2011
Drilling logistics interface

Exploration wells are usually the PSC's first drilling holes
within the allocated concession, and therefore these
operations are carried in unknown / hazardous
areas which can encounter shallow gas /
kick, well control loss meaning blow-out,
drilling mud / fluid gain / loss
In such case Shore logistics support must react promptly in
dispatching the requested material (mud, chemicals, water,...)
Other common drilling problems can be, drilling string stuck or
sheared inside the hole calling for fishing/wireline equipment
Slide No. 21
Drilling Logistics Interface
Slide No. 22
11
5/5/2011
Drilling Logistics interface

Well testing operation requires a significant mobilisation of material including some
heavy lift loads (in range of 18 Mtons).
Flaring hydrocarbons from the rig surface can
generate some ocean sea surface pollution, for
which Supply vessels will need anti-dispersant
chemicals in ample quantities (spraying booms)
Usually rig material requirement calls for supply vessels rotations once every 3 days as
an average. Personnel flying to the rig range from one flight every 3 days to a
maximum of 3 flight / day
Slide No. 23
Drilling Appraisal
In the event of the well drilled is successful (positive hydrocarbons discovery),
the second step is to drill more wells to define the potential of the whole
block / concession (field).
This step is known as appraisal well
Logistics interface:
Operation personnel flow and material requirement are similar to an
Exploration well.
Slide No. 24
12
5/5/2011
Construction (Project engineering /

construction / commissioning )
When the overall field is fully assessed (Appraisal drilling completed), two steps are then
triggered.
First one to launch the engineering / construction of the permanent production platforms /
modules, at sub-contractors yards.
Once the production platforms / modules are finally built, they are transported up to the
production field location where they are permanently installed.
When this major operational stage is done (heavy lift transport / handling), the second step of so
called Production / Development drilling is starting with a rig drilling out of the respective
Platforms / modules already installed on the field.
Slide No. 25
Construction (Project engineering / construction /

commissioning ) : Logistics interface
During this phase onshore logistics is mainly involved in
importing all the production modules / jackets which uses huge
barges, floating crane...Pipelines related material, and platforms
equipments are then handled. A lot of personnel movements are
linked at the same time.
Slide No. 26
13
5/5/2011
Drilling production - development

Usually the PSC will use a different rig to perform this
operation, and even require additional drilling rigs to
Drill simultaneously.
Well services will usually perform the final stage by
Installing within the hole what is commonly called
the completion, consisting of small pipes (Tubin),
Packers (underground valves)
Slide No. 27
Drilling production - development

Logistics interface
During this phase, PSCs will try to complete their overall drilling in the shortest time
frame as possible to mainly reduce drilling rigs rental cost, as well to be ready on time
well before the production plant(s) / platform are ready to be installed to the field
Usually rigs will performs what is commonly called batch drilling (explained later
under rig and drilling detailed explanations).
All to say this operational option will trigger a fast turn
around of supply vessel rotations, meaning material
and bulk (chemical, water, diesel fuel,...) loading
will become very frequent for the shorebase to respond accordingly.
Operations personnel flow, and material will increase significantly.
- One to two vessels / day,
- 2 or 3 helicopter flights / day
Slide No. 28
14
5/5/2011
Production (Early production, pumping,

separation, pipeline, temporary storage)
Once all wells are completed, construction technicians will finalize their part
in connecting thje production's lines of various platforms (flow lines tie-in /
hook ups), and eventually to an export main pipeline.
Before production actually take place, a commissioning phase in view to
insure all engineering specifications and material QA/QC have been followed
(certification, pressure test,....) will need to be carried out.
Then production technicians officially do the start up
(various preliminary operations : well clean up / flaring / ...)
Slide No. 29
Production (Early production, pumping,

separation, pipeline, temporary storage)
In some cases, prior to commissioning / construction to be finally completed,
PSCs put in place a parallel infrastructures called early production facilities.
This set up is to trigger the production output as early as possible, since the
cost of the whole project depends on these revenues; taking into account
huge investment are at stake
The production filed is equivalent to a major industrial facility consisting of
various platforms, such as :
- Production platform (gas separators, gas
compressors, dehydration, unit, metering, control room,...)
Slide No. 30
15
5/5/2011
Production
Wellhead platforms (various small platforms) are spread out onto the field
gathering all the productions / development wells drilled) connected with
each other through submarine flow line, and finally linked to the main
production platform
For safety and comfort, all the personnel working on various production
platform are accommodated onto a separate module called Living quarter
platform.
Slide No. 31
Production
Slide No. 32
16
5/5/2011
Production
Once the production is up and runnings,
PSCs need to insure the hydrocarbon
production flow accordingly from the
reservoir, as numerous problems can
occur. The range of operations to solve
these issues is quite wide, and come under
what is called Work over :
- Scrapper
- Coiled tubing,
- well stimulation
- gas lift
- water injection
Slide No. 33
Production
Other main operations taking place to be aware of , are related to the
maintenance facilities (platforms shut downs, revamping). They are
significant and carried with caution due to the environment, and they
called for a temporary stoppage of production.
For all these operations either rigs, specialized vessels, work barges or
others supports are especially contracted.
As for everything else, a well / reservoir has a life expectancy (10, 20 or
30 years).
Therefore production technician along with reservoir engineers will
decided when and how to abandon a well.
On a production platform there are device to isolate the underground
reservoir from the surface.
Slide No. 34
17
5/5/2011
PRODUCTION
The export main pipeline can be connected to various storage
terminals, which are either onshore
(depot tank terminal), or offshore permanently
Anchor storage tanker (FSU, FPU, FPSU, FSO,
FPSO, FDPSO, FSG, FGSO).
Onshore terminals either have an export jetty or a pipeline going
offshore conencted to an SBM,
Slide No. 35
Production
Where tankers come and connect to load the production (like
vehicle service station).
For offshore terminals, tankers come nearby (various way to
technically approach storage facilities) to pick up production load
up.
The next step is the production delivery to process plants. It can
either go straight to onshore refinery / liquefied gas plant
through a submarine pipeline, or delivered by tanker.
Slide No. 36
18
5/5/2011
PRODUCTION
FPSO
Slide No. 37
Production Logistics interface

During all these various stages from actually starting to and, to
eventually be inproduction, the logistics requirements and
policies are different from the drilling phase.
Production requirements are not so hectic and the vessels
rotations are less; on the other hand personnel to be flown by
helicopter are more significant ( 1 / 2 flights per day)
Before finishing interface summary, we have itemised what are
the main prerogatives of a supply vessel. Main functions, and
requrested equipment are as follow :
Slide No. 38
19
5/5/2011

- Large cargo deck area (mainly for drillign rigs)
- Diesel fuel, water, dry / liquid chemical tanks (chemicals solely for drilling
rigs)
- Firefighting system (various classification to contain offshore facilities fires)
Slide No. 39

- Anchor Handling equipment AHTS, and bollard pull capacity to perform
rig moves, barges anchoring,...
Production platforms and rigs

require at all times stand by
vessels for the safety aspect
(FIFI, man overboard, Typhoon
evacuation,...).
Slide No. 40
20
5/5/2011
Distribution (Storage plant Depot / Refinery Supply

chain up to the common user or customers).
A Refinery purpose is to change the hydrocarbon production into finished product (ranging from diesel fuel,
kerosene, petrol);
Slide No. 41
Refinery
Slide No. 42
21
5/5/2011
Refinery Supply chain up to the common user

or customers.
Liquefied gas plant to change into commercial use gas (LPG, LNG,).
The finished products are in fact the end chain of the industry,
meaning from raw hydrocarbons it has been changed for consumers
need (vehicles service stations, cooking gas, power station, etc).
This step is handled by what is finally called Distribution .
Slide No. 43
Distribution (Storage plant Depot / Refinery

Supply chain up to the common user or customer)
Logistics Interface
The word distribution is actually used in overall logistics industries
serving consumers goods (food supply chain, spare parts
warehouses,...).
Therefore the logistics tolls used are the standard ones belonging to
freight companies, shipping agent, air cargo holdings, road trucking
transport services.
One way to segregate the Oil industry is to define the Exploration and
Production activities as the upstream part , as for the Refinery and
distribution as the downstream part.
Slide No. 44
22
5/5/2011
Annexe
In addtion to this presentation, we have included a section
dedicated to Drilling detailed explanations. There are 3
sketches:
- Anatomy of a basic rig
- Casing well design
- Rig design
Along with these sketches we shall address to all attendees a
basic introduction on the drilling activities and tools, as well as to
answer any queries
Slide No. 45
Onshore
Rig
Slide No. 46
23
5/5/2011
Directional Drilling
Slide No. 47
Drill Bit wit mud/water flow
Slide No. 48
24
5/5/2011
Drill Bit
Slide No. 49
Mud Flow
Slide No. 50
25
5/5/2011
Slide No. 51
26
Darwin Marine Supply Base

In August 2010, the Northern Territory Government of Australia called for
Expressions of Interest from international companies to build and operate a worldclass marine supply base in north Australia.
The project is the Northern Territories Governments response to the fact that the
existing Darwin general port has been supporting substantially all the offshore Oil
and Gas activities in Australian territorial waters, JPDA and Timor-Leste Exclusive
Area (TLEA), and these general port facilities have become too congested. The plan is
therefore to invite a private sector investor to develop and operate a dedicated multi
user integrated shorebase under a build own operate transfer framework.
The Northern Territories Government in their request for EOIs identified for
potential investors the following fields as their scope,
Ichthys Project
Bayu-Undan
Kitan
Shell Prelude
Blacktip,
significant ongoing activity
Bonaparte Basin
Ashmore-Cartier Region
Browse Basin
and future projects, such as: Greater Sunrise
Abadi (FLNG)
Petrel-Tern, (FLNG)
Total exploration in the Browse Basin

Engineering Design (FEED) Darwin Marine Supply Base
C4 - 1
This is an extract from their EOI presentation.
Figure C4 1 : Darwin MSB in relation to JPDA and TLEA

Key components of the marine supply base will be:
Dedicated multi-user marine berths, berth pockets, staging areas and channel
connections to service rig tender vessels, which supply offshore gas rigs with
all their supplies,
Undercover, open and bonded storage areas to service critical cargoes being
transferred to/from rig tender vessels,
Connections to all utilities and easy supply of fuel, water and other supplies
to enable quick turn-around times for rig tender vessels.

C4 - 2
Expressions of Interest were called and submissions by various parties were done by
27 October 2010.
On 10 December 2010, three bidders were shortlised:
ShoreASCO, a consortium comprised of local supply and service company

Shorelands, international supply base operator ASCO Holdings, and
Macmahons Contractors and Capella Capital.
Toll Holdings, a major international transport and logistics firm who operates
supply bases in both Singapore and Australia
POAGs, a consortium including POAGS, a national supplier of stevedoring,

logistics and port management services, QUBE Logistics and construction firm
John Holland.
The successful consortium will receive revenue from Marine Supply Base (MSB)
activities to cover the costs and earn a commercial return on their capital over a 30year concession.
The Government of Northern Territory recognizes the challenges of operating and
getting a reasonable return for this Marine Supply Base. They are transferring the
existing oil and gas business from the present Darwin Harbour to the Marine Supply
Base to kick start business once operational. The government will absorb the cost of
dredging and maintaining an access to the channel for the Darwin Marine Supply
Base. They have also indicated that the proposed MSB will handle the rock export for
the Ichthys project. Also, they are prepared to look at other forms of assistance if
necessary to make the Public Sector Private Sector Partnership (PPP) a success.
The Financial close is expected in December 2011, with construction starting in early
2012. The supply base is expected to be operational by December 2013, and the
project commissioned and the transfer of activities to East Arm Wharf completed by
mid 2014.

C4 - 3
Figure C4 2 : Port of Darwin Boundary
Table C4 - 1 : Darwin MSB Project Schedule

C4 - 4
Figure C4 3 : Proposed Site for Darwin MSB

C4 - 5
Figure C4 - 4 : Artists Impression of Proposed Darwin MSB

C4 - 6
Analysis of Darwin MSB Project

1) The site of the Darwin MSB is superior to Suai for the development of a
supply base facility in that:
a. It is within a sheltered bay and therefore does not require a breakwater
for 365/24 operations.
b. Its proximity to the Darwin general port which already supports the
existing offshore Oil and Gas activities and all its ancillary services. This is
an advantage as the investor will not need to build and develop a full
suite of integrated services.
c. It has access to skilled workforce with experience in the Oil and Gas
industry.
d. There is excellent intermodal connectivity already in place, international
airport and international seaport, good network of roads and highways,
and railway connectivity.
2) From an investors perspective, an investment in the proposed Darwin MSB is
more attractive than the proposed Suai Supply Base for the following reasons:
a. Certainty of a large number of customers that will be required to
transfer their operations from the Darwin general port to the MSB.
b. Lower capital expenditure as there is no requirement for a breakwater
and the cost of the dredging is borne by the Northern Territories
Government.
c. Less Capex/Opex as it will not have to invest in the full suite of
integrated services, for e.g. no requirement to build fuel tanks,
Reverse Osmosis system, clinic/hospital, helipad, etc.
d. Certainty that even if the oil and gas business does not produce a
superior return, the facilities can be used as part of the general
commercial port
e. Clarity of laws and fiscal issues and clear contracting framework
contained in the EOI.

C4 - 7
3) Given the factors above, the Darwin MSB project will be able to obtain bank
financing.
4) Two of the three candidates are established oil and gas shorebase operators,
namely Toll (operates Singapore Offshore Petroleum Services, a multi user
integrated hub) and ASCO (operates several single user facilities for BP in the
north sea and a multi user facility in Scotland).
5) The Suai location has the advantage of being significantly nearer for all
activity within the JPDA and TLEA. For example, it is 110nm from the Sunrise
field whereas the Darwin MSB is 240nm. The consequence of this is
additional fuel cost if the PSCs operate from Darwin as well as cost of
additional supply vessels to maintain the necessary supply chain.
6) Suai has a potentially shorter material supply chain if Suai is able to utilise
Lamongan Shorebase as a materials hub and operates a regular liner service.
7) Based on their own timetable, the Darwin MSB project will have a financial
close 31 Dec 2011 and estimated to be operational mid 2014. Based on our
EPC masterplan, the Suai Supply Base will be operational end 2012, giving it a
18month first mover advantage. This is critical as the oil companies will not
move once they are settled in.

C4 - 8

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Table of Contents:

Part I : Executive Summary

Part II : Technical Study

Suai Supply Base Feasibility Study and Front End

Utilities in the Suai Area

Part III : Commercial Study

Suai Supply Base Feasibility Study and Front End

3.2.4.2 Recommendations from Infrastructure

Suai Supply Base Feasibility Study and Front End

Profit and Loss (All Oil and Gas revenue,

Part IV : Social Impact Study

Suai Supply Base Feasibility Study and Front End

Suai Supply Base Feasibility Study and Front End

Suai Supply Base Feasibility Study and Front End

List of Tables and Charts

Suai Supply Base Feasibility Study and Front End

Suai Supply Base Feasibility Study and Front End

Suai Supply Base Feasibility Study and Front End

- Creation of jobs and business opportunities during the construction,

Scope of the Study

Suai Supply Base Feasibility Study and Front End

- Provide Recommendations to create a Skills Development Program

Suai Supply Base Feasibility Study and Front End

Scope of Commercial Team

Framework of the Study

Suai Supply Base Feasibility Study and Front End

Figure I 1 : Study Methodology

Suai Supply Base Feasibility Study and Front End

Initial Observations and Management Guidance

At the start of the Study, several key factors became apparent:

Suai Supply Base Feasibility Study and Front End

10. Darwin is in the process of developing a dedicated multi-user integrated

Memo on Alternative Site (appendix A2b)

Memo on Role of Service Companies (appendix A2c)

Based on quotes from Timor-Leste contractors (Domestic

Based on appointing a non-Timor-Leste Main Contractor

Suai Supply Base Feasibility Study and Front End

suitable Timor-Leste contractors (International-Domestic

Technical Team Study Results

Recommended a 150m x 50m berth configuration, with 2 LCT ramps and

Reported that Domestic Price estimate is US$346,962,500 and Domestic

Reported that International-Domestic Price estimate is US$273,162,500

Suai Supply Base Feasibility Study and Front End

1) Price does not include any taxes or duties.

Table I 1 : Summary of Estimated EPC Cost

Commercial Team Study Results

As a platform to promote awareness of the project as well as provide a deeper

Figure I 2 : Photos at Lamongan Shorebase orientation and training program

Suai Supply Base Feasibility Study and Front End

Suai Supply Base Feasibility Study and Front End

During construction, whilst operating a regular LCT service, allowing

Prepared four revenue assumptions over a 10 year period, on the basis of a

Offshore oil and gas;

Suai Supply Base Feasibility Study and Front End

Conclude negotiations on the development of Sunrise as

Release new acreage by Q4 of 2011 with sufficient attractive terms,

Promote on shore oil and gas exploration such that activities

Promote industrial development in and around Suai area. Build an

Promote the mining sector.

Implement the recommended infrastructure improvements from

Authorise the recommended LCT liner services during operations.

The team recommended three capital amortisation scenarios:a.

Full Capex model - Full EPC Capital expenditure to be borne by the