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Opportunities and Challenges for
Oil & Gas and Mining Sectors in Timor-Leste

International Conference and Capacity Building

Hotel Timor, Dili
5-7 March 2003
Supported by USAID

The Secretary of State for Energy and Mineral Resources provided several of the conference papers to La'o Hamutuk for inclusion in this OilWeb CD-ROM.

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ESCAP study Natural and Mineral Resources Inventory, Policy and Development Strategy: East Timor, 2002.  Executive Summary and two of the resultant reports:

Mineral - Hydrocarbon Database and Bibliography of the Geology of East Timor by John L. Rau (PDF, 284 pages with many maps). This reviews the resources, history, and bibliography of mineral and hydrocarbon resources belonging to East Timor.


Economic Geology, Development Strategy and Capacity Building by Pieter Bakker (PDF, 70 pages).


Formulation of National Mineral Policy, Legislation and Regulatory Framework for the Democratic Republic of East Timor by J.A. Garnett, and the draft Mines and Minerals Management law.


Geology and Mineral Resources of Timor-Leste, ESCAP Atlas of Mineral Resources, 2003 (PDF)


The Petroleum Potential of Onshore Timor Leste by Tim Charlton, Univ. of London geologist.

ABSTRACT: The existence of major oil and gas reserves in its offshore territorial waters is very significant for the long-term economic prosperity of Timor Leste. There is, however, a real possibility that three-way international boundary disputes between Timor Leste, Australia and Indonesia will prevent these resources from being fully exploited in the short term. In contrast, the ownership of mineral and hydrocarbon resources in the onshore territory of Timor Leste is not in dispute, and urgent consideration should be given to assessing and potentially exploiting these resources. In the short term the licensing of onshore mineral and hydrocarbon exploration will generate some revenue through the tendering process, and more importantly provide a source of employment and training through exploration programmes. In the longer term onshore hydrocarbon resources could prove as important economically to Timor Leste as its offshore resources.
    In Timor ‘world class’ hydrocarbon source rocks have been recognised in the Late Triassic-Early Jurassic stratigraphic section. Contemporaneous fluviodeltaic sandstones provide potential reservoir sequences, sealed by thick Middle Jurassic shales. It has been widely perceived that structural complexity is the limiting factor for hydrocarbon prospectivity in Timor. In the author’s opinion, however, this complexity has been overstated, and Timor is geologically no more complex than many other hydrocarbon-bearing provinces globally. In particular there is close analogy with the island of Seram to the north of Timor, where oil production is long established. Recently the Oseil field has been brought on stream in Seram, and this field provides a very favourable analogue for potential hydrocarbon-prospective structures in Timor


Hydrocarbons in the Timor Sea by Myra Keep, UWA geologist. Also Powerpoint presentation.

ABSTRACT: The Timor Sea comprises various sub-basins and structural divisions within the northern part of the Bonaparte Basin, including the Vulcan Graben, the Sahul High, the Flamingo High, the Nancar Trough, Kelp-Sunrise High and Malita Graben.  Within these regions there are 44 field discoveries, and 157 exploration wells.  Reserve estimates in the combined region are 24.9 TCf of gas, 643 mmbbls of condensate and 694 mmbbls of oil, representing technical success rates between 26% and 43% in individual areas.  Of these reserves 397 mmbbls of oil, 89 mmbbls of condensate and over 100 Tcf of gas remain undeveloped (at the end of 2001).
    Oil-prone source rocks occur at multiple levels in the Vulcan and Sahul-Flamingo-Nancar  areas, generating different types of oil.  Significant oil-prone source rocks occur within the Vulcan region, and there is potential within certain sections of the Vulcan and Sahul-Flamingo-Nancar areas. 


The Timor Trough by Nick Hoffman, 3D-Geo Consultant. Also Powerpoint presentation.

Legal and Political


The Offshore Jurisdiction of Timor Leste in the Timor Sea, by Jeffrey Smith, international maritime attorney

ABSTRACT: Timor Leste achieved its independence in 2002 with an undefined maritime jurisdiction and is now in the fortunate position of not being bound by any pre-existing offshore boundaries. The importance of this for energy development in the ocean area to the south of Timor cannot be understated, given significant reserves of oil, gas and condensates in the continental shelf. Timor Leste’s maritime jurisdiction, both north and south of its territorial land areas, remains to be defined. The new State’s jurisdiction is capable of certain determination with the application of criteria found in several decisions of the International Court of Justice, arbitration awards, State practice and developments in customary international law. The recent decisions in the Eritrea/Yemen and Qatar/Bahrain cases support the delimitation of Timor Leste’s maritime boundaries in areas outside of the restrictive Timor Gap Treaty Zone of Cooperation, now the Joint Petroleum Development Area of the pending Timor Sea Treaty.
    This paper discusses Timor Leste’s maritime jurisdiction in the Timor Sea.

bulletEnergy Sector Organizations: General Principles And Experiences In Other Countries by Rich Ruggierio, Gaffney-Cline & Associates consultants. No paper, only Powerpoint.

The Draft Mining Law of Timor-Leste, by João Nataf, UN Legal Advisor. No paper, only Powerpoint.
See also J.A. Garnett policy paper on the mining law, and the draft of the law.

ABSTRACT: The government has begun to work on the establishment of the necessary legal framework for the industrial development of the country. Pursuing this purpose, Dr. Jack Garnett, an expert on mining legislation, has been working with the Ministry of Development and Environment in drafting a Mining Law for East-Timor but could not attend this conference to present the first draft of this legislation. The draft was prepared as a component of the UN-ESCAP assisted project. This conference gives the opportunity to present the policy background of this proposal as well as the main and more relevant provisions of this draft.
    In accordance with this first draft proposal, which is presently being circulated within the government, a National Mineral Rights Registration System (Part II of the draft) shall be established, allowing that a single body will deal with applications, approvals and legal transactions related to mineral licenses and an official license area map will be available to the general public. There will be only one formal document, a Mining License, making the process simple and secure. As in many mining legislation, investment stabilization agreement (Part III) will be possible allowing a maximization of investment for large scale mining projects. Those agreements will be requested to a Minerals Advisory Board, which will have government, local and international representatives. Specially authorized inspectors (Part IV) will be appointed to monitor the mining, the applicability of the legislation as well as all books, accounts, documents and records of mineral license holders. Protection of the environment (Part V) has been specially considered in the proposal. The license holder shall conduct an ecological base-line survey documenting the pre-existing quality of air, water, soil, rock, plant, animal and cultural imprints on the environment as well as the environmental impact assessment study. A Mine Reclamation Guarantee Trust Fund will be established for the purpose of the final post-operational period. And, last but not the least, the Government shall be obliged do coordinate the creation of a sustainable mining partnership (Part VI) with the stakeholders and the local community. This is an innovative aspect of this legislation, designed to create a partnership with the rural and traditional communities where mining activities will most likely take place.
    Such legislation will require additional regulations for its full implementation. But, before this takes place, a wide consultation process is needed, this conference being one of its first steps.

Economic and Environmental


Joint Petroleum Development Area -- Past Activity -- Future Opportunities and Challenges by Nick Kyranis, Technical Director, Timor Gap Joint Authority. Also Powerpoint.


Regulation of Health, Safety and Environment in the Joint Petroleum Development Area by Jeremy Dunster, Timor Gap Joint Authority. Also Powerpoint and PDF. This paper includes many reference materials.

ABSTRACT: This paper seeks to provide a background of the performance of the offshore petroleum industry within a goal setting regulatory regime and in order to put into context what (in the authors opinion) are some of the key challenges and opportunities to the regulation of Health, Safety and Environment (HSE) within the Joint Petroleum Development Area (JPDA).


Woodside presentation to the conference James Kernaghan, Woodside Australian Energy. No paper, only Powerpoint.


Timor Leste as a Potential LNG Exporter, by John Imle. Accompanying Powerpoint.  Additional Powerpoint.

ABSTRACT: Until now, the young nation of Timor Leste, while anticipating petroleum taxes and royalties, has not had the opportunity to consider the much greater national benefit of an LNG export facility. With the growing experience in deep-water pipeline design and installation, it is reasonable to consider the option of bringing large quantities of Timor Sea gas to Timor Leste for liquefying natural gas and exporting it to world markets.
    The paper will evaluate the technical, economic and commercial variables that are critical to such a proposal.  These variables include the cost of plant construction, cost of capital (perceived political risk), pipeline costs, and tax structure for the LNG entity.  The conclusion:  Timor Leste has the potential to join the ranks of the world’s important LNG processors and exporters -- at competitive LNG export prices.
    Such a project would create a major, high technology industry for Timor Leste, bringing at least US $1.5 billion foreign direct investment, long-term human resource development opportunities and thousands of jobs, both direct and indirect. While this development option would be a significant challenge for the people and the government, it deserves a full examination.

The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)
Institutu Timor-Leste ba Analiza no Monitor ba Dezenvolvimentu
Rua D. Alberto Ricardo, Bebora, Dili, Timor-Leste
P.O. Box 340, Dili, Timor-Leste
Tel: +670-3321040 or +670-77234330
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