Timeout for a webservice in 11g BPEL/Mediator

You can set timeout for a web service that's called from BPEL/Mediator in composite.xml

oracle.webservices.httpReadTimeout = 10000
Time here is milliseconds.

If the webservice that you are calling on same domain as that of your SOA composite, then you need to set one additional paramter to optimize the call.

oracle.webservices.local.optimization = false

Oracle published a note for the same Here (You need metalink account to access this link)