JosJoséé TeixeiraTeixeiraVice Minister, Natural Resources, Minerals and Energy PolicyVice Minister, Natural Resources, Minerals and Energy Policy

RepRepúúblicablica DemocrDemocrááticatica de Timorde Timor--LesteLeste

Keynote Address

ContentContent

•• TimorTimor--Leste the CountryLeste the Country

•• Brief History of TimorBrief History of Timor--LesteLeste

•• Economic recordEconomic record

•• Background to the Timor Sea TreatyBackground to the Timor Sea Treaty

•• Background on the Timor Sea Designated Background on the Timor Sea Designated AuthorityAuthority

•• TimorTimor--LesteLeste’’s Petroleum Sectors Petroleum Sector

•• Current Management for TimorCurrent Management for Timor--LesteLeste’’s s Petroleum Sector Petroleum Sector

TimorLeste

South-East Asia

TimorLeste

Australia

ArafuraSea

Indonesia

Timor-Leste the CountryTimor-Leste the Country

•• The Democratic Republic of TimorThe Democratic Republic of Timor--Leste is Leste is made up of made up of

–– the eastern part of the island of Timorthe eastern part of the island of Timor

–– OecussiOecussi (enclave)(enclave)

–– and and AtauroAtauro and and JacoJaco IslandsIslands

Timor-Leste

West Timor

Oecussi

Atauro

• Dili - Capital

Timor-Leste the CountryTimor-Leste the Country

•• Capital City Capital City -- Dili Dili •• Democratically elected constitutional Democratically elected constitutional

governmentgovernment•• Governing party (FRETILIN) elected in 2002 Governing party (FRETILIN) elected in 2002

-- 55--year termyear term•• Parliamentary system Parliamentary system -- uniuni--cameralcameral•• Population Population -- 924,000 people924,000 people•• Official languages Official languages -- Portuguese & Portuguese & TetumTetum•• Major commodities Major commodities –– petroleum & coffeepetroleum & coffee

Brief History of Timor-LesteBrief History of Timor-Leste

•• 1515 to 1975 1515 to 1975 Portuguese colonyPortuguese colony•• 28 Nov 1975 28 Nov 1975 declared independent declared independent •• 7 Dec 1975 to 1999 7 Dec 1975 to 1999 Indonesian occupationIndonesian occupation•• 30 Aug 1999 30 Aug 1999 UN monitored referendum UN monitored referendum

East Timor votes unanimously for independence from IndonesiaEast Timor votes unanimously for independence from Indonesia

•• October 1999 October 1999 -- May 2002 May 2002 United Nations Transitional Administration in East Timor United Nations Transitional Administration in East Timor (UNTAET) responsible for the administration of East Timor (UNTAET) responsible for the administration of East Timor

•• 20 May 200220 May 2002East Timor celebrates the restoration of independence and East Timor celebrates the restoration of independence and becomes the worldbecomes the world’’s newest nations newest nationEast Timor officially becomes known as the Democratic Republic East Timor officially becomes known as the Democratic Republic of Timorof Timor--Leste (Leste (““RDTLRDTL””))

Economic performanceEconomic performance

•• Embryonic economy based on open and marketEmbryonic economy based on open and market--based based principles, good record of managementprinciples, good record of management

•• Inflation at 2 per cent; economic growth in 2005Inflation at 2 per cent; economic growth in 2005--06 at 6 06 at 6 per centper cent

•• Budget surplus of 21 per cent of GDP in 2004Budget surplus of 21 per cent of GDP in 2004--05; 05; forecast to average 10 per cent over next four fiscal forecast to average 10 per cent over next four fiscal yearsyears

•• Petroleum Fund established to receive all petroleum Petroleum Fund established to receive all petroleum revenues. A highly transparent, fully accountable model revenues. A highly transparent, fully accountable model based on principle of spending only sustainable based on principle of spending only sustainable revenuerevenue

Timor Sea Treaty - BackgroundTimor Sea Treaty - Background

•• 1991 to 2000 1991 to 2000 Timor Gap Treaty between AustraliaTimor Gap Treaty between Australiaand Indonesia for the Zone ofand Indonesia for the Zone ofCooperation (ZOC)Cooperation (ZOC)

•• 10 Feb 200010 Feb 2000 Exchange of Notes between AustraliaExchange of Notes between Australiaand UNTAET and UNTAET

–– UNTAET (on behalf of East Timor) assumed role of Indonesia UNTAET (on behalf of East Timor) assumed role of Indonesia in the Timor Gap Joint Authority (regulator of the ZOC A)in the Timor Gap Joint Authority (regulator of the ZOC A)

–– East Timor begins to have an active role in the management East Timor begins to have an active role in the management of petroleum in the ZOC Aof petroleum in the ZOC A

•• May 2002 May 2002 –– TimorTimor--Leste and Australia sign the Timor Sea Treaty (TST) Leste and Australia sign the Timor Sea Treaty (TST)

which establishes the Joint Petroleum Development Area which establishes the Joint Petroleum Development Area (JPDA) and splits revenue from petroleum produced 90:10 (JPDA) and splits revenue from petroleum produced 90:10 respectivelyrespectively

Timor Sea Designated AuthorityTimor Sea Designated Authority

•• April 2003 April 2003 –– Timor Sea Treaty enters into force and Timor Sea Treaty enters into force and Timor Sea Designated Authority (Timor Sea Designated Authority (““TSDATSDA””) is ) is establishedestablished

•• Role of the TSDA Role of the TSDA –– to regulate and monitor petroleum activities in the JPDA to regulate and monitor petroleum activities in the JPDA

and and –– to collect revenue from petroleum produced in the JPDA to collect revenue from petroleum produced in the JPDA

on behalf of Timoron behalf of Timor--Leste and Australia Leste and Australia •• A partner in Production Sharing ContractsA partner in Production Sharing Contracts•• An international organisationAn international organisation•• TSDA has offices in Dili, TimorTSDA has offices in Dili, Timor--Leste and Darwin, Leste and Darwin,

AustraliaAustralia•• 2006 2006 -- TSDA will become part of the Ministry or a TSDA will become part of the Ministry or a

statutory authority in Timorstatutory authority in Timor--LesteLeste

Ministry for Natural Resources, Minerals

and Energy Policy

Ministry of Planning & Finance

Oil, Gas and Energy Directorate (OGED)

Timor SeaOffice (TSO)

Timor Sea Tax Division

Timor-LesteRevenue Service

(TLRS)

Prime MinisterMinister for Natural Resources, Minerals and Energy Policy

Vice Minister Natural Resources, Minerals

and Energy Policy

Current Management forTimor-Leste’s Petroleum SectorCurrent Management forTimor-Leste’s Petroleum Sector

Ministerial Council

Joint Commission

Timor Sea Designated Authority

(TSDA)

Timor Sea Treaty

TSDAGOVERNMENT OF TIMOR-LESTE PETROLEUM SECTOR

The Petroleum SectorThe Petroleum Sector

•• BayuBayu--UndanUndan first oil in February 2004 first oil in February 2004 -- most most significant component of GDP significant component of GDP

•• Critical building block for future economic Critical building block for future economic independenceindependence–– Expectations for sector more than simple Expectations for sector more than simple ““rent rent

collectioncollection””–– Petroleum Law, Model PSC, Petroleum Tax Petroleum Law, Model PSC, Petroleum Tax

RegimeRegime–– Petroleum FundPetroleum Fund

2005/2006 Offshore Acreage Release2005/2006 Offshore Acreage Release

•• This bidding round perhaps like no other This bidding round perhaps like no other ––worldworld’’s newest nation offering rights in what is s newest nation offering rights in what is probably Asiaprobably Asia’’s last hydrocarbon frontiers last hydrocarbon frontier

•• Follows firstFollows first--ever areaever area--wide seismic survey in wide seismic survey in exclusive maritime areaexclusive maritime area

•• In parallel, releasing acreage covering half of In parallel, releasing acreage covering half of JPDAJPDA

•• Bidding process will be highly transparent and Bidding process will be highly transparent and accountable process in line with good accountable process in line with good governance principles practised by RDTL and governance principles practised by RDTL and TSDATSDA

Australia

Timor-Leste

Location MapLocation Map

Concluding remarksConcluding remarks

•• TimorTimor--Leste is Open for BusinessLeste is Open for Business

•• Today is an early but important step in Today is an early but important step in launching a process that will allow us to launching a process that will allow us to develop our petroleum sector to its fullest develop our petroleum sector to its fullest potential, together with youpotential, together with you

•• Our pledge Our pledge we will reward your interest in Timorwe will reward your interest in Timor--Leste with Leste with openness, fairness, objectivity and professionalismopenness, fairness, objectivity and professionalism

•• AndAnd…… we hopewe hope…… with exploration successwith exploration success