Cooperation on resource management with the Democratic Republic of Timor-Leste
Some are probably aware of the fact that Timor-Leste (also known as East-Timor) was recognised as an independent nation state in 2002 and that their current president, Dr. José Ramos-Horta, together with Bishop Belo, was awarded the Nobel Peace Prize in 1996. Many may not know that Timor-Leste has a potential of petroleum resources offshore and has, through several years, been assisted by Norway in managing these resources. Timor-Leste has also established a petroleum revenue fund which currently is of the aggregated amount of about 5.4 Billion USD.
Timor-Leste has awarded several Petroleum Sharing Contracts (PSCs) in exclusive areas (TLEA), but there is for the time being no production in this area. However, Timor-Leste has also a joint jurisdiction with Australia in the Joint Petroleum Development Area (JPDA) established under the Timor Sea Treaty. The treaty was signed by Timor-Leste and Australia in 2002 and Timor-Leste and Australia share the revenues 90-10. The only field in the JPDA currently in production is the Bayu-Undan Field where Conoco Philips, as operator, commenced production in 2004. The field has estimated recoverable reserves of 400 million barrels condensate and LPG and 3.4 tcf of natural gas. Bayu-Undan is connected to a LNG production plant in Darwin, Australia by a 502 kilometre 26-inch submarine pipeline. The JPDA also partially contains the Greater Sunrise Field where the operator, Woodside, is currently considering development options. Timor-Leste and Australia are discussing among other things the landing of Sunrise petroleum including whether the landing terminal should be in Timor-Leste or Australia.
Norway has for many years provided assistance to Timor-Leste within the petroleum sector. Most of this assistance has been given through the Norwegian Oil for Development (OfD) program. SIMONSEN is prequalified by the Norwegian Petroleum Directorate for the OfD program to provide legal assistance. This summer SIMONSEN, pursuant to a tender process, was awarded a contract to provide legal assistance to Autoridade Nacional do Petróleo (ANP).
ANP is the national petroleum authority of Timor-Leste, responsible for petroleum operations in the TLEA. Timor-Leste and Australia have in line with the Timor Sea Treaty provisions also delegated the regulatory responsibility for petroleum operations in the JPDA to ANP, as Designated Authority. ANP is therefore operating under two jurisdictions which, together with the fact that Timor-Leste, as a young nation state, is still developing its legal system, bring numerous challenges in their daily work.
SIMONSEN has over the years acquired substantial experience in providing legal advice to developing countries with petroleum resources and has also assisted Timor-Leste in the past under the United Nations Transitional Administration (UNTAET). SIMONSEN’s current “Timor-Leste team” consists of Bjørn-Erik Leerberg (partner), Frode A. Berntsen (senior lawyer) and Halvor Klingenberg (associate). The team has already been in Dili twice and several more trips are scheduled for 2010. The SIMONSEN team is working closely with ANP particularly assisting in capacity building and draw attention to state and company practices in other parts of the world. The legal assistance is directed to the legal staff and the senior management of ANP and focuses on transfer of knowledge on issues relating to resource management, development of legal framework and providing assistance when ANP, as a regulatory body, addresses practical day to day challenges.