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Media Release 18 December 2006

First Payment of Profit Oil

The Timor Sea Designated Authority (TSDA) is delighted to announce that the first payment of profit oil was made by the Bayu-Undan Joint Venturers to the TSDA on the 8th of December 2006.

Jose Lobato, Executive Director of the TSDA said today, The Bayu-Undan development is a world class oil and gas project in the Joint Petroleum Development Area between Australia and Timor-Leste. Upstream exploration and development costs of more than USD2 billion have now been recovered by the Joint Venture partners. The profit oil position has been reached far earlier than originally anticipated on the strength of world oil prices and the strong performance of the operator, ConocoPhillips.

This is another significant milestone which has been achieved through the hard work and cooperation of all those concerned. The production sharing arrangements have shown to benefit all parties, and in particular the people of Timor-Leste.

Petroleum revenue for Timor-Leste not only includes its share from oil and gas production, but also the collection of tax revenues through the Petroleum Tax Law. Our current estimate indicates revenues of USD 10.3 billion for Timor-Leste from its share of petroleum sales and USD 6.7 billion in tax receipts over the life of the project. In monthly terms, this means an immediate increase in distributions to the Government of Timor-Leste by the TSDA from about USD 8 million per month to almost USD 80 million per month plus taxes, depending on oil prices. All of these funds are paid into the recently established Petroleum Fund which provides for a sustainable income for the future of all Timorese. Of course, under the Timor Sea Treaty, Australia is also entitled to its 10 percent share.

For further information, please contact Andrew Caddy on + 670 723 1202 or email

The Timor-Leste Institute for Development Monitoring and Analysis (Lao 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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