|Subject: ABC: Exploration law won’t
affect Australian negotiations
Thursday, June 23, 2005. 6:40am (AEST)
Exploration law won't affect Australian negotiations, says TL
Timor-Leste says income from oil and gas reserves will have no impact on negotiations with Australia over the distribution of revenue from the disputed part of the Timor Sea. The country has passed the first of three laws that pave the way for the exploration of 30,000 square kilometres of sea owned by Timor-Leste.
Once the first licenses are granted later this year they will provide the country with another source of petroleum revenue. But the Secretary for State for Natural Resources and Energy Policy, Jose Teixeira, says the new funds have nothing to do with ongoing discussions with Australia.
"From our point of view it's just developing existing resources," he said. "We're not under any sense of pressure even at the moment to negotiate any outcome with Australia. Our economic outlook at the moment is looking good."
Mr Teixeira says it is too soon to know how much revenue the new reserves will generate. He says the new funds are welcome but have no relevance to ongoing negotiations with Australia over the Greater Sunrise field.
"We haven't been negotiating with pressure, we've certainly been negotiating for our rightful share of resources and to ensure that we share in the development of that," he said. "But I think the more time goes on then the less pressure there is whether or not we have these oil and gas resources." (ABC)
Thursday June 23, 5:12 PM
INTERVIEW: East Timor PM Sees Intl Bank Role In Oil Fund
By Phelim Kyne OF DOW JONES NEWSWIRES
JAKARTA (Dow Jones)--East Timor is considering bringing in one or more foreign banks to help manage the country's new Petroleum Fund, but hasn't yet decided which ones, Prime Minister Mari Alkatiri said Thursday.
"We have been approached by some (foreign banks), but we are waiting for the approval of the parliament," he said in an interview with Dow Jones Newswires.
He wouldn't give additional information about the banks.
The fund is due to be launched on July 1. It has been charged with housing all of East Timor's petroleum royalties and returns from its investments, with a view to accelerating development of the impoverished nation.
East Timor government projections indicate that the fund will accumulate at least $4 billion over 20 years, generating annual interest earnings and real earnings of $200 million and $120 million respectively over the same period - a significant portfolio for any bank called in to help in its operations.
Those estimates don't include revenues the government will eventually derive from Woodside Petroleum Ltd's (WLP.AU) stalled $5 billion Sunrise gas project in the Timor Sea.
East Timor's current petroleum output consists of gas condensate, or wet gas, that ConocoPhilips (COP) extracts under license from the Bayu-Undan project in the joint Australia-East Timor development area in the Timor Sea.
ConocoPhilips sells on the open market gas condensate and liquid petroleum gas extracted from the area and pipes natural gas to Darwin where it's liquefied and then sold to buyers in Japan.
Bayu-Undan began production in February 2004 and has a life expectancy of 20 years. Projections indicate the area will produce revenues averaging $250 million annually in that period
East Timor will kick off an oil and gas licensing round in August with the release of seismic data followed by an international roadshow that will include the U.S. and the United Kingdom.
Deadlines for bids will occur in first quarter of 2006 and the bid awards will be issued in the second quarter of next year.
Fund Will Invest In Foreign Bonds, Equities
East Timor and Australia will hopefully agree by mid-July on a revenue sharing agreement needed to kickstart Sunrise into development, Alkatiri said, without elaborating.
Issues including East Timor's insistence that Australia recognize the former Portuguese colony's sovereignty in the gas field area have hamstrung efforts to get Sunrise back on track.
Alkatiri said he modeled the fund, which he refers to as "my baby", on a similar savings and investment vehicle created by the Norwegian government.
Representatives of Norway's finance ministry and central bank advised on the fund's development.
The fund aims to ensure that revenues derived from East Timor's petroleum resources are accumulated, invested and disbursed by the most sustainable, transparent and effective means possible.
East Timor's central bank will serve as the fund's operational manager and two separate government committees will advise the government on issues including fund-related investment options.
"The baby will grow up and guarantee a safe management of the (oil and gas) resources...and save some amount of money for future generations," Alkatiri said.
The government will initially restrict investment of monies from the fund to "lower risk" foreign bond purchases including U.S. Treasuries, Alkatiri said.
The government will decide the specific bond investment mix in the next two to three weeks.
Alkatiri said the fund's investment mix will eventually extend to foreign equities in line with the capacity of the government to make prudent investments in that area.
"Our (investment) management capacity is still very weak," he said.
(But) the law gives us the possibility to have 10% (of investment funds) at least for the next ten years to invest in equities to get some experience and to get some capacity."