Timor-Leste Government Restructures Petroleum Regulation
March 2007 - ongoing
The government of Timor-Leste is restructuring its mechanisms for regulating petroleum activities. Private discussions have been underway within the government since September 2006, and these decree-laws could be enacted by the Council of Ministers by the end of May 2007.
In late March 2007, the Ministry of Natural Resources, Minerals and Energy Policy circulated proposed decree-laws about how the Timor Sea Designated Authority (TSDA) will become a Timor-Leste government agency (merging with the National Oil Gas and Energy Directorate). This is required by the 2002 Timor Sea Treaty which established the TSDA to oversee oil and gas exploration and extraction (upstream) projects in the Joint Petroleum Development Area, shared with Australia. The Timor Sea Treaty requires the TSDA to become part of the Timor-Leste Government within a few years, a time period which has been extended three times.
A second proposed decree-law will create and establish the structure for a Timor-Leste national oil company (PETROTIL), which will conduct both upstream and downstream activities, while a third creates a National Council on Energy Policy to set policies for extraction, development, and distribution of oil, gas and other energy resources.
The Ministry announced a 15-day public consultation ending on 5 April 2007 and requested comments on the following documents:
The brief consultation was announced only in the newspaper, and the draft laws were available only in Portuguese. The Petroleum Fund Consultative Council wrote to the Ministry and the NGO network Core Group on Transparency held a press conference objecting to the process.
To our knowledge, the Ministry received only two substantive submissions prior to the 5 April deadline, from:
More submissions were accepted after the deadline, including from:
The main points in La'o Hamutuk's April submission are:
In mid-April, La'o Hamutuk was informed unofficially that the time for submissions has been extended, that our recommendation that such complex and far-reaching legislation not be enacted hastily during an election period was accepted, and that the process would be delayed for a few months. Several Timorese government officials told La'o Hamutuk that they appreciated our input, as it helped them advocate for a more open process during internal discussions.
On 1 June, Minister Jose Teixeira told a public seminar that these laws are only drafts, unlikely to be enacted quickly. A second round of redrafting is underway, and new versions may be announced in July.
On 27 July, La'o Hamutuk made a second, more extensive, submission on these proposed laws.
In late June, Timor-Leste and Australia agreed to extend the life of the TSDA, which had been scheduled to expire in July 2007, until 2 January 2008.
In August, the new Government split up the former Ministry for Natural Resources, Minerals and Energy Policy. Alfredo Pires became Secretary of State for Natural Resources and Avelinho Coelho became Secretary of State for Energy Policy. Secretary Pires described his plans, which would incorporate the ARNP and PETROTIL in a Petroleum Optimization Act, at a La'o Hamutuk public meeting on 20 September.
The September 2007 La'o Hamutuk Bulletin contains a report on this issue.
On 21 December 2007, the Joint Commission agreed to extend the TSDA mandate for six months more, to 30 June 2008.
The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)