The Proposed Petroleum Regime for Timor-Leste
Draft laws, public consultation and submissions
to the Timor Sea Office and the Timor Sea Designated Authority
Link to page on this regime after it was enacted
Timor-Leste's Petroleum regime defines how the government will regulate and tax petroleum projects within Timor-Leste territory. It does not apply to the Joint Development area, which has its own rules.
Background and public consultation
In August 2004, the Timor-Leste government's Timor Sea Office and the Timor Sea Designated Authority (which administers the Joint Petroleum Development Area created by the 2002 Timor Sea Treaty) released draft laws for managing petroleum development. These drafts are as follows:
The Timor Sea Office also released sections of an amended version of the Timor-Leste Taxation Act as it relates to petroleum, which is referenced by the Draft Timor-Leste Petroleum Tax Act.
The drafting committee held a three-day public consultation in Dili at the end of August. Jose Teixeira opened the session, which included PowerPoint presentations on the Global Energy Market, the draft Petroleum Regime, and the proposed Fiscal (tax) Regime. Prime Minister Mari Alkatiri wrapped up at the end.
The government invited organizations and companies to submit written comments. La'o Hamutuk was among several organizations to do so, and we extensively analyzed both the Draft Petroleum Act and the Draft Production Contract.
La'o Hamutuk Submission
Our submission is in three parts (click on each one to read it as HTML):
In the text of La'o Hamutuk's submission, we refer to the following documents:
Submissions by other organizations (all PDF)
On 17 December, the Timor-Leste Council of Ministers approved revised versions of the petroleum laws. No further public consultations were held, and the texts were not released. With World Bank assistance, the government briefed Parliament on this legislation (see presentation), and it was passed in July without any public hearings. The official versions are in Portuguese, but the government has released unofficial English translations.
The Timor-Leste Parliament passed two Petroleum laws, for land and sea falling within Timor-Leste's exclusive jurisdiction:
La'o Hamutuk has analyzed these laws, and found that many of the problems identified in our and others' submissions have not been corrected.
The Petroleum Regime for the maritime Joint Petroleum Development Area is under control of the Timor Sea Designated Authority, which released two analogous documents in August 2005:
After extensive delays, the JPDA regime was approved by the appropriate officials in Timor-Leste and Australia in February 2006. Australia had help up approval pending Timor-Leste signing the CMATS Treaty.
For ongoing developments regarding the Timor-Leste Petroleum Regime, click here.