Chronology of Oil and Gas Developments in the Timor Sea
Portuguese period 1500s-1975
1893: First non-Timorese explorations of on-shore oil resources in Portuguese Timor, in Laclubar, Manatuto, with small-scale exports.
1956: Australian-based Timor Oil Ltd. begins off-shore explorations, to be joined by other companies over the next twelve years.
1956: Portugal claims sovereignty over the seabed in accordance with median line principles which were later ratified in the 1958 UNCLOS I Geneva Convention. Australia rejects the claim, with competing assertions of its territory.
1970-1972: Several Australian oil companies conduct explorations near and off the south coast of Portuguese Timor
1970: Australia and Indonesia begin negotiations on seabed boundaries, ignoring Portuguese objections that the seabed should split midway between Timor and Australia. Australia and Indonesia signed treaties "Establishing Certain Seabed Boundaries" on 18 May 1971 (PDF) and 9 October 1972 (PDF), which came into effect in November 1973. These treaties were based on the continental shelf principle, which was biased in favor of Australia. Because Portugal did not participate, the other two countries could not complete the line between Portuguese Timor and Australia, creating the "Timor Gap."
1974: Portugal grants exclusive exploration permits in the Timor Sea to Oceanic Exploration/PetroTimor, a U.S. company. The permit area covered 60,700 square kilometers extending from a point near the south coast of Portuguese Timor to the median line with Australia. Australia objects.
1974: Sunrise Gas field is discovered, although political and other issues delay its development until recent years.
17 Aug 1975: Australian ambassador to Indonesia Richard Woolcott cables his government: "…closing the present gap in the agreed sea border … could be much more readily negotiated with Indonesia… than with Portugal or independent Portuguese Timor."
Indonesian Occupation 1975-1999
7 Dec 1975: Indonesia invades East Timor. PetroTimor and all Portuguese institutions flee.
17 July 1976: Indonesia claims to annex East Timor as its 27th province, but the United Nations continues to regard the territory as a colony of Portugal until 1999.
Oct 1976: Indonesia's Justice Minister, Prof. Mochtar Kosumaatmadja confirms that Indonesia is prepared to negotiate a seabed boundary to close the Timor Gap on the same terms as the 1971-2 Indonesia-Australia treaties (continental shelf boundaries favorable to Australia).
20 Jan 1978: Australia "recognises de facto" that East Timor is part of Indonesia.
Feb 1979: Australia and Indonesia begin to negotiate a seabed boundary south of East Timor, signifying Australia's de jure recognition of Indonesia's annexation of East Timor. More than a dozen negotiating rounds are conducted over the next decade.
Oct 1983: The Jabiru 1a well in the Timor Sea (between West Timor and Australia), drilled by the Australian company BHP, finds significant oil deposits. Exploration and test wells continue, with extraction beginning in 1986. By 1989 confirmed oil reserves in the Timor Sea are 214 million barrels, with Jabiru producing 42,000 barrels every day.
11 Dec 1989: Australia and Indonesian Foreign Ministers Gareth Evans and Ali Alatas sign the Timor Gap Treaty (PDF) in a ceremony in an airplane flying over the Timor Sea. The treaty establishes a Zone of Cooperation (ZOC) between East Timor and Australia, north of the median line. It provides for Indonesia-Australia joint exploration of the illegally occupied territory, with revenues shared 50-50. Portugal protests immediately.
Oct 1990: East Timor resistance spokesman José Ramos-Horta writes: "Australian oil companies would be well advised not to jump into the Timor Gap area. …A good advice to Australian business: wait and see how things develop in next 5 to 10 years."
Feb 1991: East Timorese resistance leader Xanana Gusmão writes the Australian parliament: "Australia has been an accomplice in the genocide perpetrated by the occupation forces, because the interests which Australia wanted to secure with the annexation of East Timor to Indonesia are so evident. The best proof is the Timor Gap Agreement."
9 Feb 1991: Timor Gap Treaty enters into force following ratification.
Feb 1991: Portuguese government initiates lawsuit against Australia in the International Court of Justice (ICJ) in the Netherlands. Portugal contends that the Timor Gap Treaty violates East Timor's right to self-determination and Portugal's rights as the administrative power. Since Indonesia does not accept the jurisdiction of the court, Australia is the only defendant.
12 Nov 1991: Indonesian troops massacre more than 250 peaceful East Timorese demonstrators at the Santa Cruz cemetery in Dili.
11 Dec 1991: Australia and Indonesia award production sharing contracts to Phillips Petroleum, Royal Dutch Shell, Woodside Australian Energy and other petroleum companies to explore and exploit resources in the Timor Gap Zone of Cooperation. PetroTimor declines to bid, stating the treaty violates its valid claim. Contracts continue to be awarded, and explorations continue, throughout the 1990s.
Oct 1994: Woodside strikes oil in Laminaria, alongside the ZOC in an area which would be East Timor's if the 1971-2 boundaries between Indonesia and Australia had been drawn fairly with Portuguese/East Timorese participation.
June 1995: The International Court of Justice rules on Portugal v. Australia. By a 14-2 vote, the court upholds East Timor's right to self-determination, but cannot invalidate the Timor Gap Treaty because Indonesia, whose claim to East Timor is being challenged, does not accept the court's jurisdiction. Two judges dissented, one writing that "Australia's action in entering into the Timor Gap Treaty may well be incompatible with the rights of the people of East Timor."
14 Mar 1997: Australia and Indonesia sign a treaty (PDF) covering the water column boundary but not the seabed resources, under the principles established by the United Nations Convention on the Law of the Sea (PDF) in 1982. This treaty was never ratified.
22 July 1998: CNRT leaders Mari Alkatiri, José Ramos Horta and João Carrascalão issue a statement: "The CNRT supports the rights of the existing Timor Gap contractors and those of the Australian government to jointly develop East Timorese offshore oil reserves in cooperation with the people of East Timor."
July 1998: Production starts in the small Elang-Kakatua oil field, within the ZOC. By 2002, the field is mostly exhausted, having produced approximately 31 million barrels of oil for Phillips Petroleum and its partners. Although Indonesia and Australia have received revenues from this field, East Timor's share, about $2 million/year since 2000, has been placed in escrow, pending ratification of the May 2002 Timor Sea Treaty.
27 Jan: Indonesian president BJ Habibie accepts East Timorese demands for an internationally-supervised referendum on independence. Eight months of TNI/militia terror and devastation ensue.
30 Aug: East Timor's people vote overwhelmingly to reject integration with Indonesia. Following massive destruction by departing Indonesian troops, the territory comes under a United Nations transitional administration leading to independence in May 2002.
Oct: Seven oil companies led by Phillips Petroleum approve development of the Bayu-Undan gas and oil field, in the ZOC. Since then, the companies have invested more than US$1.5 billion in the project. The first phase, liquid production, will start in 2004, with a second phase of gas production starting in 2006. Total East Timor government revenues from Bayu-Undan could be more than US$3 billion, 20 times as much as Elang-Kakatua.
Nov: Woodside's Laminaria-Corallina project (which includes BHP and Shell) begins producing oil. The companies extract more than 100 million barrels, about half the total reserve, during the next two years, generating more than US$900 million for the Australian government. Some or all this revenue should be East Timor's if its Exclusive Economic Zone (EEZ) were drawn under UN Law of the Sea (UNCLOS) principles.
29 Nov: Mari Alkatiri, East Timorese spokesman on the Timor Gap, says "we still consider the Timor Gap Treaty an illegal treaty. This is a point of principle. We are not going to be successor to an illegal treaty."
10 Feb: Australia and UNTAET sign an interim Exchange of Notes and Memorandum of Understanding (PDF), which continue the 1989 Australia-Indonesia Timor Gap Treaty terms but replace Indonesia with East Timor. These agreements specify a 50-50 division between Australia and East Timor of oil and gas production from the Zone of Cooperation defined in the Timor Gap Treaty, called the Joint Petroleum Development Area (JPDA) since May 2002. Nothing is said about areas outside of the JPDA, which should be within East Timor's EEZ.
May: The JPDA Joint Authority releases more acreage for exploration.
Oct: UNTAET begins negotiations with Australia for longer-duration agreement over division of Timor Sea resources, but not about maritime boundaries or the EEZ.
7 Dec: After extensive hearings, the Australian Senate Committee on Foreign Affairs, Defense and Trade published a detailed report on East Timor. Regarding the Timor Gap Treaty, the Committee recommended that Australia "should take into account current international law in relation to seabed boundaries, the history of our relations with the East Timorese people, the need to develop good bilateral relations with East Timor and the need for East Timor to have sources of income that might reduce dependency on foreign aid."
Feb: Ramiro Paz, UNTAET senior economics advisor in the East Timor Transitional Administration (ETTA), writes a six-page paper "The Timor Gap Treaty vs. an Exclusive Economic Zone: Economic Independence for East Timor" for ETTA Economics Minister Mari Alkatiri. Paz strongly recommends that East Timor pursue its full EEZ entitlements under international law, rather than accept or revise the terms of the now-defunct Timor Gap Treaty.
9 April: UNTAET Minister for Political Affairs Peter Galbraith speaks to the Australian Petroleum Production and Exploration Association. Fresh from the second round of negotiations with Australia, Galbraith calls for scrapping the Timor Gap Treaty and negotiating boundaries with Australia based on international law. He urges that an agreement be reached before 15 July to avoid possible complications from East Timor's soon-to-be-elected government.
5 July: Galbraith, Alkatiri, and two Australian Ministers sign a Memorandum of Understanding (MOU) called the Timor Sea Arrangement. Under this Arrangement, which replaces the February 2000 MOU, East Timor will receive 90% and Australia 10% of oil and gas revenues from the JPDA. The JPDA inherits the ZOC from the 1989 Timor Gap Treaty, altering only the division of revenues. The largest gas field, Greater Sunrise, is deemed to lie 20% in the JPDA and 80% in Australian territory. Although the Arrangement is "without prejudice" to a future seabed boundary delimitation, it does not question Australia's claim to fields outside the JPDA.
Aug: PetroTimor files suit against Phillips and Australia in Australian Federal Court based on its 1974 agreement with Portugal. The company wants billions of dollars in compensation for lost revenues from Timor Sea oil and gas. (See 3 February 2003 below.)
30 Aug: East Timor elects a Constituent Assembly to write its constitution, which later becomes the first Parliament. Fretilin wins 57% of the vote.
21 Dec: Phillips Petroleum and UNTAET agree on a tax and fiscal package to define how East Timor's new government will benefit from the revenues and investment in the Bayu-Undan oil and gas field in the JPDA. The "Bayu-Undan Understandings" follow many months of negotiation, in which Phillips attempted to use the U.S. and Australian governments to pressure East Timor's leaders. Discussions of these issues continues in August and October 2002.
15 Mar: Phillips Petroleum announces that two Tokyo companies will purchase the bulk of Bayu-Undan gas for 17 years, starting in 2005.
23 Mar: PetroTimor conducts seminars on Timor Gap in Dili. Their experts argue that East Timor should rightfully own 100% of Sunrise and Bayu-Undan, as well as all of Laminaria/Corallina (which lies completely outside of the JPDA). Australian barrister Christopher Ward says "The 5 July 2001 Agreement between Australia and UNTAET represents a political strategy so that East Timor will not raise questions again about the past agreements."
April: Peter Galbraith explains UNTAET's process of negotiation on Timor Sea to the East Timor's Constituent Assembly. He emphasized that East Timor has a "very good legal claim" to more than is agreed to in July 2001 Arrangement, and that the Timor Sea Treaty ends when the maritime boundary is settled, after which East Timor would get 100% in their agreed seabed. Galbraith claims that the agreement laid out in the July 2000 MOU is "the best deal for East Timor that could be negotiated with Australia."
17 May: Development drilling of 16 wells begins at Bayu-Undan.
19 May: East Timorese civil society groups and opposition political parties protest the imminent signing of the Timor Sea Treaty between East Timor Prime Minister Mari Alkatiri and Australian Prime Minter John Howard.
19-20 May (midnight): The Democratic Republic of East Timor becomes an independent nation.
20 May: East Timorese and Australia Prime Ministers sign the Timor Sea Treaty and an Exchange of Notes (reciprocal) to replace the 5 July 2001 Arrangement between UNTAET and Australia. The substance of that Arrangement is continued. Both Prime Ministers commit to work for expeditious ratification of the treaty and a Sunrise Unitization Agreement. Government fact sheets on Timor Sea Treaty and Sunrise Unitization.
12 June: East Timorese civil society groups form the Timor Gap Working Group, a coalition to monitor the legal process of Timor Sea developments. They urge the East Timor Parliament not to ratify the Timor Sea Treaty.
17 June: At the South East Asia Australia Offshore Oil Conference in Darwin, East Timor Prime Minister Mari Alkatiri pledges that the Timor Sea Treaty "will be ratified soon" because it is about "commitment and understanding" between two countries.
19 July: The first round of negotiations between East Timor and Australia on a Sunrise international unitization agreement (IUA) concludes with both parties pledging to reach agreement by the end of 2002. The IUA will define how the Greater Sunrise field, with about 9 trillion cubic feet of natural gas (worth about US$16 billion), will be divided. Australia (currently expected to receive 82% of Sunrise revenues) has placed a high priority on reaching this agreement so that the Sunrise project can proceed.
17 Aug: The Northern Territory Trades and Labour Council holds a seminar on Timor Sea development in Darwin. Three East Timorese non government organizations attend: the East Timor Union Confederation (KSTL), Labor Advocacy Institute for East Timor (LAIFET), and Independent Center for Timor Sea Information (CIITT).
24 Aug: East Timor's National Parliament enacts a maritime boundary law based on UNCLOS principles, claiming an Exclusive Economic Zone for 200 miles off East Timor's coasts. The law sets the basis for maritime boundary negotiations with both Indonesia and Australia, which have not yet been scheduled.
17 Sep: East Timor's Council of Ministers approves the 20 May Timor Sea Treaty, sending it to East Timor's parliament to be ratified.
20 Sept: Australia awards offshore exploration contract NT/P62 for area NT01-3, part of which lies on East Timor's side of the median line.
3 Oct: Three representatives from East Timorese civil society (NGO Forum, CIITT and La’o Hamutuk) testify at the Australian Parliamentary Joint Standing Committee on Treaties on the Timor Sea Treaty in Darwin. These three organizations appealed to parliament not to ratify the Timor Sea Treaty signed on 20 May 2002, as did many of the more than 80 submissions received by the Committee.
3 Oct: East Timor Prime Minister Mari Alkatiri writes Australian PM John Howard to propose initial discussions on maritime boundaries.
Oct: Sunrise unitization agreement talks continue. Australia and Woodside want to link this agreement to the ratification of the Timor Sea Treaty, thereby holding the Bayu-Undan project (which primarily benefits East Timor) hostage to East Timor's concession of the bulk of revenues from the larger Sunrise project to Australia. The East Timorese government and Phillips urge that the two agreements be treated separately.
3 Nov: Australian PM Howard replies to East Timor's PM that Australia "is willing to commence discussions" after the Timor Sea Treaty is in Force and the Sunrise IUA "has been completed."
18 Nov: Mari Alkatiri writes back to John Howard, saying that he sees no reason for the "completion of these interim arrangements" to be necessary before boundary talks start, and asking for a "swift timetable" for boundary discussions.
25 Nov: East Timor's Parliament begins debate on the Timor Sea Treaty.
27 Nov: Australian Foreign Minister Alexander Downer, after an acrimonious meeting with Mari Alkatiri in Dili, says that Australia may not ratify the Timor Sea Treaty until February 2003 or later. (The transcript of this meeting was leaked in early March 2003, and shows Downer with a patronizing, colonial attitude toward East Timor's Prime Minister.) The oil companies say that the delay could endanger arrangements to sell gas from Bayu-Undan and Sunrise, adding to pressure on East Timor's government to promptly accept Sunrise unitization terms which unfairly benefit Australia, rather than insisting that the maritime boundaries be negotiated.
6 Dec: Sunrise partners Woodside, ConocoPhillips, Shell and Osaka Gas announce the indefinite delay of the Sunrise project, claiming that neither the floating LNG processing plant nor the pipeline to Darwin is economically viable.
17 Dec: East Timor's Parliament ratifies the Timor Sea Treaty.
26 Jan: ETAN demonstrates in Washington to demand that Australia abide by international law.
1 Feb: Australia, rejecting East Timor's refusal to concede sovereignty over the part of Greater Sunrise which lies outside the JPDA, says it's Parliament will not ratify the Timor Sea Treaty until East Timor gives in and signs Australia's proposed version of the Sunrise International Unitization Agreement.
3 Feb: The Australian Federal Court dismisses the PetroTimor lawsuit, saying it has no jurisdiction over concessions granted by other countries. The company says it will appeal.
4 March: Having received no response to his 18 November 2002 letter, Mari Alkatiri writes to John Howard that the TST will soon be in force and the IUA is being submitted to the RDTL council of ministers. He asks for an "early indication of a date" on which permanent boundary "discussions might begin, and a date by which you consider those discussions might result in a permanent boundary delimitation." Howard does not reply for nearly five months.
5-6 March: The Australian Parliament ratifies the Timor Sea Treaty. Green Senator Bob Brown is expelled from the Senate for charging John Howard with "blackmail."
2 April: The Timor Sea Treaty enters into force.
18 May: Victoria State branch of the Australian Labor Party calls on the Howard Government to promptly begin boundary negotiations with East Timor.
June-July: Australian parliament gathers submissions, holds a hearing, and issues a report on the Sunrise Unitization Agreement.
17 July: United States Senate Foreign Operations Committee urges East Timor and Australia "to engage in good faith negotiations to resolve their maritime boundary expeditiously in accordance with international legal principles."
1 August: Howard replies to Alkatiri's 4 March letter, indicating a willingness to begin talking about talking about boundaries, with no timetable
7 Nov: Representatives of more than 100 non-governmental organizations from around the world write to Australian Prime Minister John Howard to urge him to negotiate fairly with East Timor on maritime boundaries. Howard's office replied a few days later.
January: Seven members of East Timorese NGOs visit Nigeria to learn how not to do petroleum development.
January: Melbourne-based East Timor supporters organize the Timor Sea Justice Campaign. The campaign has published a Fact Sheet and a Sunrise IUA Briefing Paper. In March, the TSJC made a submission to the Senate Economics Committee and testified at the Committee's hearing on the Sunrise IUA.
31 Jan: National Australian Labor Party adopts a position committing itself to "negotiate in good faith with the Government of East Timor in full accordance with international law ..."
13 Feb: Pilot production begins at Bayu-Undan oil and gas field in the JPDA.
23 Feb: Australia grants an exploration permit for offshore area NT03-3, in territory claimed by both countries.
2 March: East Timor receives $644,000 grant from the U.S. government to support petroleum sector development.
10 March: Australian Parliament is rushed by their government to ratify the Sunrise Unitization Agreement. After small parties in the Senate resist, submissions, a hearing, report and debate follow over the next two weeks. East Timor's government expresses its concerns about the process and the Labor Party position.
29 March: Australian Senate completes ratification of Sunrise IUA by passing implementing legislation.
31 March: Santos reports first condensate shipment from Bayu-Undan.
14 April: New campaigns to protest Australia's theft of East Timor's resources are launched on both sides of the Timor Sea: The Timor Sea Justice Campaign in Australia, and the Movement Against the Occupation of the Timor Sea in East Timor.
19-22 April: The first substantive round of boundary talks take place in Dili, with little results. Prime Minister Alkatiri opens the talks, and his office issues a press release at their conclusion. The process receives extensive media coverage.
20 May: Timor Sea Justice Campaign holds demonstrations around Australia.
9 June: Prime Minister Mari Alkatiri delivered the keynote address at the Southeast Asia Oil Conference in Darwin, detailing East Timor's position.
14 July: The Timor Sea dispute was discussed in the U.S. House of Representatives during the debate on the U.S.-Australia Free Trade Agreement.
25 July: Australia and New Zealand agree on a permanent maritime boundary after decades of negotiations. It is primarily based on median lines. Text of the Treaty, Australian National Interest Analysis. The treaty entered into force in January 2006.
11 August: Foreign Ministers Jose Ramos-Horta and Alexander Downer meet in Canberra, looking for a "creative solution" to the boundary dispute, where Australia would provide a larger share of revenue from disputed areas to East Timor, while East Timor would agree to forego a permanent maritime boundary at least until all the petroleum was exhausted.
23-25 August: A public consultation on the draft petroleum legislation is held in Dili, with presentations, followed by submissions by NGOs and others.
19-22 September: A second round of boundary discussions is held in Canberra, followed by further discussions in Darwin the following week. East Timorese NGOs demand a fair boundary. Talks are adjourned with no agreement or announcement until after the Australia election.
8 October: Australian voters return John Howard and Alexander Downer to power, with enlarged majorities.
27 October: Boundary negotiations resume in Dili, with a call for fairness by East Timorese NGOs. The talks end with no agreement, restoring the status quo to before the 11 August "creative solution." The following week, East Timor's Prime Minister explained his position to Australians.
17 November: Woodside announces it is suspending the Greater Sunrise project, due to the failure to agree on boundaries. The announcement comes a week after Woodside signs an agreement of cooperation with the U.S.-installed government in Iraq.
29 November: East Timor Foreign Minister Jose Ramos-Horta, speaking in Australia, threatens to ask the UN General Assembly to take Australia to the International Court of Justice.
17 December: Timor-Leste Council of Ministers passes petroleum laws.
14 January: As Woodside puts the Sunrise project on the shelf, Australia invites Timor-Leste to re-commence boundary talks. Timor-Leste accepts the offer in early February, and talks are scheduled for March in Canberra.
31 January: Timor-Leste Ministry of Planning and Finances releases draft Petroleum Fund Act for public consultation.
11 February: Timor-Leste files a statement with the United Nations concerning Australia's submission to the Commission on the Limits of the Continental Shelf (CLCS).
15 February: Timor-Leste writes to Woodside asking for information about an oil spill at Laminaria.
February: Timor-Leste government begins building publicity for an upcoming licensing round in the uncontested part of the Timor Sea.
17 February: PM Mari Alkatiri announces completion of Timor-Leste's first seismic exploration.
3 March: Petrotimor files Second Amended Complaint in their U.S. lawsuit against ConocoPhillips and the TSDA.
5 March: Seventeen senior members of the U.S. Senate and Congress write John Howard to urge Australia to negotiate seriously.
7-9 March: Australian and RDTL negotiators meet in Canberra.
12 April: Council of Ministers approves Petroleum Fund Law and sends it to Parliament.
26-29 April: Australian and RDTL negotiators meet in Dili, with demonstrations across Australia.
11-13 May: Australian and RDTL negotiators meet in Sydney. Although Australia claims an agreement has been made, Timor-Leste officials are not so clear. ETAN says the deal cheats Timor-Leste.
June: The Australian government assistance agency AusAID cancels a grant to a Timorese human rights NGO because they had spoken out against Australia's continuing occupation of the Timor Sea. (See Editorial, La'o Hamutuk Bulletin Vol. 6 No. 4.) In November, AusAID cancelled another grant to a Timorese environmental NGO.
18 July: In Washington, protesters tell John Howard to stop stealing Timor-Leste's oil.
September: Timor-Leste establishes Petroleum Fund
September: Timor-Leste and Australia agree on the details of a Petroleum Mining Code for the JPDA, which must be formally approved before a licensing round for new JPDA areas scheduled for early 2006 can be conducted.
29 November: Australian and RDTL technical delegations meet in Darwin reaching an agreement to resolve disputed oil and gas fields, but it is not made public.
12 January: Australia and RDTL sign Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) in Sydney.
24 February: NGOs elect their representatives to the Petroleum Fund Consultative Council.
28 February: Australia approves the JPDA Petroleum Mining Code, enabling the May 2006 TSDA bidding round to proceed.
18 April: Petroleum Fund Investment Advisory Board adopts Rules of Procedure.
12 May: Timor-Leste awards five contracts to Eni and one to Reliance for offshore exploration.
26 June: After three months of internal strife, Prime Minister Mari Alkatiri resigns. Jose Ramos-Horta is sworn in as Prime Minister two weeks later.
24 July: The TSDA signs a contract with Woodside and others to replace an interim contract for the Jahal and Kuda Tasi fields.
16 August: The TSDA announces four contract awards to consortia headed by Minza Oil, Petronas, Oilex and Zetex for exploration in the new areas of the Joint Petroleum Development Area. Zetex withdraws a few weeks later.
21 September: In the U.S. lawsuit of Petrotimor (Oceanic Exploration) v. ConocoPhillips, Judge Emmet Sullivan dismisses charges against the TSDA, Indonesia, and Australian subsidiaries, but allows the case to proceed against ConocoPhillips.
12 October: Australia and East Timor Sign Security Arrangement on Joint Petroleum Development Area
October-November: TSDA signs four new contracts for oil exploration in the JPDA.
8 December: Bayu-Undan, having paid off its capital investment, begins paying profit oil revenues to Timor-Leste, Australia and the TSDA.
31 December: Balance in Timor-Leste's Petroleum Fund exceeds one billion U.S. dollars.
7 February: Australian Government tables the CMATS treaty to its Parliament for ratification.
22 February: Australian Foreign Minister Alexander Downer writes his Parliament that the CMATS treaty will go into force without its ratification, because of Australia's national interest.
23 February: CMATS treaty is ratified by the Timor-Leste Parliament and enters into force.
20 March: Timor-Leste Government circulates three draft decree-laws to restructure petroleum regulation and create a national oil company. After receiving submissions from La'o Hamutuk and others, their enactment is delayed until after the election.
21 March: The Government transfers $120 million from the Petroleum Fund to its operating account, the first withdrawal from the fund. An additional $160 million was transferred, as budgeted, before the fiscal year ended at the end of June.
22 May: Timor-Leste Government circulates Eni's Environment Plan for a 3D_Marine_Seismic_Survey. La'o Hamutuk makes the only Submission.
June: Timor-Leste government circulates Local Content Policy and Guidelines for public comment and receives submissions from La'o Hamutuk and two oil companies only.
21 June: La'o Hamutuk hosts a debate among political parties on Petroleum Revenue Management.
21 June: Australian Parliamentary Treaties Committee issues its report on CMATS, four months after it has come into force.
28 June: The Ministry of Finance issues the first Annual Report on the Petroleum Fund, covering the period through the end of June 2006.
30 June: In the first Parliamentary Election in independent Timor-Leste, FRETILIN is voted out of office and a new Parliamentary Coalition emerges.
18 July: The Timorese NGO Forum Tau Matan rejects funding for a Leadership Training Program that would have come from AusAID. In 2005, AusAID reneged on a contract with FTM because FTM had signed a statement supporting Timor-Leste's sovereign right to a maritime boundary.
30 July: Elang-Kakatua oil field ends production, after nine years.
4 August: Former Australian Foreign Minister Gareth Evans visits Timor-Leste and refuses to acknowledge that he did anything wrong when he signed the Timor Gap Treaty in 1989.
20 September: New Secretary of State for Natural Resources Alfredo Pires explains his plans at a La'o Hamutuk public meeting.
September: Government submits new program and budget to Parliament for the last six months of 2007.
9 October: Parliament adds $8.5 million and approves the budget, including an additional transfer of $40 million from the Petroleum Fund. The Petroleum Fund Consultative Council objects to not being consulted.
24 October: Bayu-Undan resumes operation, following a 35-day shutdown for inspection and maintenance
31 December: Parliament and President approve budget for Fiscal Year 2008, which is the same as the calendar year.
2 January: Gualdino Carmo da Silva becomes Executive Director of the Timor Sea Designated Authority, replacing Jose Lobato. The TSDA mandate is extended by six months, to 30 June 2008.
10 January: The Ministry of Finance issues the second Annual Report on the Petroleum Fund, covering July 2006 through June 2007.
31 January: The TSDA gives up on finding a new operator for Elang-Kakatua.
8 February: TSDA Joint Commission approves a new structure for the agency.
18 February: La'o Hamutuk publishes Sunrise LNG in Timor-Leste: Dreams, Realities and Challenges
The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)