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Petroleum-related excerpts from
RDTL General State Budget 2008

Secretary of State for Natural Resources Plans

Note: The Finance Ministry's 1.4 MB PDF file from which this is extracted is here. In this web page, La'o Hamutuk has corrected some typographical errors.

Contents

Part 8 – Expenditure

Capital and Development

Secretary of State for Natural Resources

The Secretary of State for Natural Resources has two capital projects. The first is an injection of equity to establish the National Petroleum Authority (NPA) and the other is capital injection into a consortium which will investigate feasibility and vialibity of a pipeline and LNG plant in Timor-Leste.

2008 $m2009 $m2010 $m2011 $m

Total $m

Establishment of the National Petroleum Authority

1.0000001.000
Capital injection into a pipeline consortium0.2490000.249
Total for Secretary of State for Natural Resources1.2490001.249

Role

The Office of the Secretary of State for Natural Resources is the Government’s main body responsible for mineral and natural resources, including oil and gas, as well as the activities of the mining, petroleum and chemical industries.

The main activities in the Secretary of State for Natural Resources will involve:

  • designing policies and drafting the necessary laws and regulations for the areas under its responsibility;

  • setting up contacts with international investors so as to attract investment to the national territory, in the areas under its responsibility;

  • drafting laws and regulations on matters pertaining to its area of responsibility;

  • monitoring the implementation of international treaties in its area of responsibility;

  • determining, in view of market trends, the conditions for the exploration of resources;

  • ensuring a transparent management of resources, in line with international practice;

  • managing oil resources and the activities of the petroleum industry according to the legislation on oil;

  • authorizing and supervising production sharing contracts, licenses and approvals;

  • promoting new explorations of oil resources and develop those already in existence;

  • maintaining an information database on oil operations and resources;

  • measuring and verify oil production and reserves;

  • setting up a monitoring and inspection program to ensure that the operators perform according to the terms of their licenses, and according to the law and the regulations;

  • licensing mining operators; and

  • setting up collaboration and coordination mechanisms with other Government bodies responsible for related areas.

Tables 8.43 and 8.47 provide details of the financial and staffing resources available to the Secretary of State for Natural Resources.

Short Term and Medium Term Priorities in the 2008 State Budget

In order to implement the policies above, the following are the main programs for the Secretariat of State for Natural Resources in 2008:

  • Continue to monitor and supervise the current petroleum and mineral activities established under the previous contracts;

  • Recruit additional national staff to fill in the existing posts in the current structure, and further develop their skill and professionalism trough training and professional development programmes;

  • Conduct the feasibility and viability study of a Pipeline and LNG – Plant to Timor Leste (Timor Leste Energy Hub Option);

  • Participate in the Consortium for the Supply base;

  • Regulating the existing actives such that it can contribute to enhancing the employment opportunities to the Timorese nationals;

  • Draft consult and enact legislations for the establishment of the national Petroleum Authority and the Institute for Petroleum and Geology;

  • Carry out the fist ever Timorese-conducted geological mapping of Dili and surrounding areas under the Institute for Petroleum and geology;

  • Draft a legislation for the establishment of national Oil Company;

  • Establish the Secretariat for the national Commission for Non-renewable resources;

  • Promote Transparency and Accountability through the creation of the fourth Constitutional Government’s Transparency Initiative, named Timor Leste Transparency Model (TLTM), and support the establishment of EITI secretariat in Timor Leste;

  • Formulate together with the Secretariat of State for Energy Policy the establishment of a policy on national energy security.

Resourcing Overview for the Secretary of State for Natural Resources

Table 8.43
Transition 2007 to 2011 Secretary of State for Natural Resources State Budget Funding ($m)

Transition2008200920102011

4 year Total

Recurrent Expenses      

Salary and Wages

40124124124124496

Goods and Services

4162,9484,0004,5006,000 17,448

Minor Capital

11134---134

Transfers

------
Total Recurrent Expenses 4673,2064,1244,6246,12418,078

Growth on Previous Year

 243.328.6%12.1%32.4%555.7%
Total Capital and Development501,249---1,249
Total General Budget of the State5174,4554,1244,6246,124 19,327

Growth on Previous Year

 330.9%-7.4%12.1%32.4%492.3%

The increase in Goods and Services is mainly driven by the setting up of a scholarship fund of $1million. Also the Secretarial will recruit a consultancy team to undertake further geological surveys.

Table 8.44
Transition 2007 to 2011 Secretary of State for Natural Resources State Budget Confirmed Donor Funding ($m)

Transition2008200920102011

4 year Total

Recurrent Expenses

2,176688---688

Capital Expenses

------
Total Confirmed Funds from Other Sources2,176688---688

Growth on Previous Year

 -84.2%-100.0%  -100.0%

Table 8.45
Transition 2007 to 2011 Secretary of State for Natural Resources State Budget Combined Sources ($m)

Transition2008200920102011

4 year Total

Recurrent Expenses

2,6433,8944,1244,6246,124 18,766

Growth on Previous Year

 -26.3%5.9%12.1%32.4%15.8%

Capital Expenses

501,249---1,249

Growth on Previous Year

 na-100.0%   

Total Combined Sources Budget

2,6935,1434,1244,6246,12420,015

Growth on Previous Year

 -4.5%-19.8%12.1%32.4%13.7%

Table 8.46
2008 Staffing Profile Secretary of State for Natural Resources

L1L2L3L4L5L6L7Total
Permanent 013723016
Temporary 338822026
Total 34111545042

For the 2008 budget staff levels increased by six new employees to enable the Secretariat to respond to its operational requirements and works program.

Table 8.47
Transition 2007 to 2011 Secretary of State for Natural Resources State Budget Confirmed Donor Activities ($m)

Project or ProgramDonorTransition2008200920102011

4 year Total

Petroleum Sector Co-operation Norway915223---223
Petroleum advisorsNorway-465---465
Petroleum Advisors 2006Norway1,239-----
Consultancy to the Secretariat of Natural ResourcesNorway23-----
Total 2,176688   688

Secretary of State for Natural Resources – Annual Action Plan

Program Name Goals Objectives Performance Indicators

I. Human Resources Development Program

Provision for higher education scholarships overseas

To prepare a bigger “layer” Timorese nationals very capable, and susceptible for technological transfer, and hence able to participate actively in managing, developing the petroleum and mineral resources of the country by 2012/13

To have at least 100 scholars graduated in year 2012/13 so as to be prepared for increase need for highly skilled professionals in the area of petroleum engineering, geology, mining, petroleum economists and lawyers.

The first batch of 24 people will be awarded scholarship by June and depart for overseas (Australia, UK, Malaysia, Indonesia) in July. And continuing negotiation and exploration for other funding sources will be done so fulfil the target of 100 scholars to be sent.

100 scholars will be back in 2012/13 to cater for at least 600 professionals needed by that time.

b. Provision for continuing professional development trough short courses, training and seminar

The current staff under the Secretary of State for Natural Resources are adequately trained and continue to develop their professional skills, knowledge, and capability (particularly English and technical knowledge)

To have all the staff in each Directorates under the Secretary of State for Natural Resources be capable in carrying out their daily work/job as described, and communicate effectively and efficiently. English languague is to be used widely by all staff.

A great number of training courses will be organised in the country for professional development, and seminar and short courses overseas will be attended by staff from Sec. Of Stat. For Nat. Res.. In particular, most of staff will be sent for Intensive English training to increase their English languague proficiency. 80% of all these programs are expected to be achieved before year end.

II. Continue to monitor, and supervise the current Petroleum and “Mining” activities, and support EITI initiatives

Monitoring, supervising the oil and gas explorations in the Timor-Leste’s own jurisdiction and monitor the development in the JPDA

The current exploration and development activities undertaken by several oil companies in the sea under Timor-Leste's jurisdiction and the JPDA be done according to the terms and conditions of the Production Sharing Contract signed.

To ensure that Timor-Leste’s national interest is taken care by the companies operating in the exploration and development activities in Timor Sea, and the effective and efficient operation of the oil and gas fields based on the good oil and gas fields prectice is done in every activities there.

At least an increase in the employement creation opportunities, and increase in the usage of local subcontractors for oil and gas field  service supplies in expected before the year end. In 2009 it is expected that the employement section of local content will increase from now being 0.01% (40 people out of at least 4000 jobs – direct and indirect) to 5 % (200 people for Timor-Leste nationals); and service subcontractors from 0% to at least 1 to 2 %.

Monitoring, supervising the small scale mining (sand and gravels) operations

The current operation/ small scale sand and gravel mining activities are done in environmentally friendly and in a sustainable manner

To have these mining activities done in effective and efficiently based on the good mining practice

All activities are done in environmentally friendly and in a more sustainable manner.

Monitor and support the transparency initiatives through the EITI secretariat activities in Timor-Leste

A secretariat for the EITI is established and further activities of the EITI is supported

Timor-Leste to continue to adhere to the transparancy intiatives and support an extension of this intiatives through the Timor-Leste Transparancy Model intiative

80% of the secretariat of EITI is established before mid year 2008 and the activies are done thereafter

III. Establishment of the National Petroleum Authority (NPA) and the Institute for Petroleum and Geology (IPG)

Drafting, consultation and enactment of the legislation for the establishment of the NPA and the IPG

The draft laws, regulations and strategic plans are done thoroughly

The draft laws, regulations and strategic plans are to be finished on time and ready to be presented at the Council of Minister in  February.

80 % of the Draft is to be ready by February 2008, and public consultation and enactment will be done thereafter. It is expected that by the end of March the legislation is enacted.

c. Operation of the NPA

The NPA is established and take over the roles assigned to it under the new enacted legislation and its relating strategic plans

The office of the NPA begins to operate

The office opens and begins its operation before mid of the year – 80 % of the office actitivities is operational. And the roles of the Timor Sea Designated Authority and the Directorate for Oil and Gas is done by this Authority effectively and efficiently.

Geological Survey of Dili and Surrounding areas and strategic places for mineral potential

A new geological map of Dili and surrounding areas, scale 1:25.000, is produced.

To intiate the government’s 5 years program of producing the new geological map for the whole country and mineral inventory of the country. These works are done by a consultancy company and lead by an experienced Timorese geologist.

80% of the area is mapped and a digital and print copies of the map is produced, and a nuber of Timorese professionals for geological mapping are training through on-job training

V. Timor-Leste Active Participation in Resource Development

Timor-Leste Pipeline and Gas Hub option studies

The technical, economical and socio-environmental feasibility and viability of a Pipeline and LNG plant as well as Gus Hub option are investigated thoroughly

Timor-Leste to know exactly the feasibility and viability of a Pipeline and a LNG-Plant to Timor-Leste through direct participation in an independent study carry out with a Consortium of Companies experienced in the area.

90% of the study and the results are presented for Government consideration before the end of Mid year

Timor-Leste Supply Base Study

To investigate the sites for Oil and Gas fields supply base in Southern Coast area

Timor-Leste to know the best site for the construction of supply base and explore the viability of funding a Consortium to establish the Supply Base

A site is definitely identified and determined to be site for Oil and Gas fields supply base in the southern coast before the mid next year.

VI. Review of legislation in the Petroleum sector

VI. Review of legislations in the Petroleum sector, and drafting of new laws– “the Petroleum Optimization Law and the Petroleum Depletion Law”

Review the existing legislations relating to petroleum sector management and development

Draft and develop new laws that suitable to the condition and situation of Timor-Leste, and follow the spirit of the policies of this new Government in this sector, namely greater engagement of Timor-Leste nationals, good and services, etc, in the resources management and development

100% of the revision and drafting of the new laws is done before the mid year 2008.

The budget also includes items for the Ministries of Foreign Affairs and Finance to support Petroleum revenue management and taxation.
 

The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)
Institutu Timor-Leste ba Analiza no Monitor ba Dezenvolvimentu
Rua dos Martires da Patria, Bebora, Dili, Timor-Leste
P.O. Box 340, Dili, Timor-Leste
Tel: +670-3321040 or +670-77234330
email: 
info@laohamutuk.org    Web: http://www.laohamutuk.org    Blog: laohamutuk.blogspot.com