“There is agreement, draft verbal note and everything is being done so that ratification can be completed by August 30,” confirmed a member of the Timorese Government.
Ratification Timeline
A source involved in the process confirmed to Lusa that the goal is, “in the coming weeks,” to bring to parliament the package of legislative changes necessary to allow ratification of the historical document, signed on March 6, 2018.
Aaron Noé Amaral, President of the National Parliament, told reporters that the government should send the necessary diplomas “briefly” so they can be discussed and approved.
“The government should submit amendments to three laws to adjust them in order to adapt them taking into account the ratification of the maritime boundary treaty,” he explained.
The executive source confirmed to Lusa that the package is expected to be debated and approved by the Council of Ministers the following week.
Required Legislative Changes
Several laws require amendment before and after ratification, in both Timor-Leste and Australia:
| Law | Status |
|---|---|
| Petroleum Fund Law | Amendment required |
| Petroleum Activities Law | Amendment required |
| Tax Law | Amendment required |
| Timor Gap Law | Amendment required |
Some of these changes must be approved before ratification; others may follow after. The process also requires deputies to interrupt the annual parliamentary recess, and certain diplomas will need promulgation by the President of the Republic.
Impact on Petroleum Projects
Gualdino da Silva, President of Timor-Leste’s National Petroleum and Mineral Authority (ANPM), explained to Lusa that “there are several contracts affected by the new border delimitation treaty,” including:
- The Bayu Undan project
- Other licenses currently operating under the Australian regime
- Projects at the western boundary of the Joint Petroleum Development Zone (JPDA)
These projects are in different phases and require:
- New Production Sharing Contracts (PSC)
- New government decrees
- Additional legislative changes in both countries, particularly on taxation
Revenue Redistribution
With the entry into force of the treaty, the fields in question will be 100% within East Timorese waters. This changes the previous arrangement under which some revenue schemes directed 10% of proceeds to Australia.
“Converting 10 percent of the revenue that goes to Australia now to Timor-Leste is not an easy equation, and it involves a lot of analysis, a lot of work, a lot of elements. The reality is that we meet almost every three weeks,” said da Silva.
Background
On March 6, 2018, Timor-Leste and Australia signed in New York the historic Comprehensive Package Agreement on the Central Elements of a Delimitation of Maritime Borders Between the Two Countries in the Timor Sea. The document was produced after negotiations conducted under the auspices of a Conciliation Commission. Since the signing, Timor-Leste has been negotiating with Canberra and with operators holding projects in the Timor Sea to finalise the complex transitional arrangements for the new regime that will be formally created upon ratification.