Timor-Leste Government Starts to Restructure Petroleum Regulation
In September 2006, the Government of Timor-Leste began internal discussions on restructuring its mechanisms for regulating petroleum activities.
In late March 2007, the Ministry of Natural Resources, Minerals and Energy Policy circulated proposed decree-laws about how the Timor Sea Designated Authority (TSDA) will become a Timor-Leste government agency (merging with the National Oil Gas and Energy Directorate). This is required by the 2002 Timor Sea Treaty which established the TSDA to oversee oil and gas exploration and extraction (upstream) projects in the Joint Petroleum Development Area, shared with Australia. The Timor Sea Treaty requires the TSDA to become part of the Timor-Leste Government within a few years, a time period which has been extended three times.
A second proposed decree-law will create and establish the structure for a Timor-Leste national oil company (PETROTIL), which will conduct both upstream and downstream activities, while a third creates a National Council on Energy Policy to set policies for extraction, development, and distribution of oil, gas and other energy resources.
The Ministry announced a 15-day public consultation ending on 5 April 2007 and requested comments on the following documents:
[For draft laws in Bahasa Indonesia or other file formats visit or email La'o Hamutuk.]
The brief consultation was announced only in the newspaper, and the draft laws were available only in Portuguese. The Petroleum Fund Consultative Council wrote to the Ministry and the NGO network Core Group on Transparency held a press conference objecting to the process.
To our knowledge, the Ministry received only two substantive submissions prior to 5 April:
More submissions were accepted after the deadline, including from:
The main points in La'o Hamutuk's April submission are:
In mid-April, La'o Hamutuk was informed unofficially that the time for submissions has been extended, that our recommendation that such complex and far-reaching legislation not be enacted hastily during an election period was accepted, and that the process would be delayed for a few months. Several Timorese government officials told La'o Hamutuk that they appreciated our input, as it helped them advocate for a more open process during internal discussions.
On 1 June, Minister Jose Teixeira told a public seminar that these laws are only drafts, unlikely to be enacted quickly. A second round of redrafting was conducted, although the new versions were not circulated. On 27 July, La'o Hamutuk made a second, more extensive, submission on these proposed laws.
In late June, Timor-Leste and Australia agreed to extend the life of the TSDA, which had been scheduled to expire in July 2007, until 2 January 2008. On 21 December 2007, it was extended again, until 30 June 2008.
In the Parliamentary election on 30 June, the Government was voted out of office, and a new government was formed in August.
In August, Alfredo Pires became Secretary of State for Natural Resources and Avelinho Coelho became Secretary of State for Energy Policy. Secretary Pires described his plans, which would incorporate the ARNP and PETROTIL in a Petroleum Optimization Act, at a La'o Hamutuk public meeting on 20 September.
The 2008 Action Plan for the new government anticipates enacting legislation creating a National Petroleum Authority (NPA) during the first quarter of 2008. Follow this link for continued evolution of this legislation.
After some workshops and discussion, draft legislation to create a National Oil Company (now called PETRONATIL) was floated in October 2010.
The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)