With its longstanding dispute with Australia over the Timor Sea resolved, neighbouring Timor-Leste looks set to expand its petroleum and mineral industries. Meanwhile, its government is actively seeking investors in agriculture and fisheries, tourism and services, according to Abel Guterres, Timor-Leste Ambassador to Australia.
Fifteen years on from its independence vote, Timor-Leste is ramping up its infrastructure development and rebuilding the country, following its first self-run elections, Ambassador Guterres told the Business Advantage PNG Investment conference last month.
‘This year, we organised our own elections and they were completely peaceful. We felt that our people have started to mature, in terms of what democracy is all about. In one household, dad would be voting for one party, mum for another party, kids for another party.
‘But most importantly, there was no violence,’ he said.
‘The country needs serious investors. We hope we can attract them with good tax incentives.’
That lack of violence is a very good sign as to where the country is heading, he said, adding he expects a coalition government including three of the five parliamentary parties to be formed within weeks.
Timor Sea oil and gas
Ambassador Guterres welcomed the September announcement at the Permanent Court of Arbitration in The Hague that Australia and Timor Leste had resolved their bitter and long-running dispute over maritime boundaries in the Timor Sea, which contains large oil and gas deposits worth an estimated US$50 billion.
The agreement included so-far confidential new sharing arrangements for the Greater Sunrise oil and gas field.
Ambassador Guterres admitted it was a ‘major issue that dogged the relationship between the two countries and that goes back to the 1960s’.
‘I’m sure that developing the resources in the area, especially Greater Sunrise, will unleash a huge amount of work and investment.’
At the moment, he said, most government income comes primarily from the Bayu-Undan joint venture off-shore project in the Timor Sea, 250km south of East Timor and 500km offshore of Darwin.
ConocoPhillips operates the field on behalf of co-venturers Santos, Inpex, ENI, Tokyo Timor Sea Resources, a consortium of Tokyo Gas and JERA (a joint venture between Tokyo Electric and Chibu Electric).
Since 2004, the Bayu-Undan joint venture has paid over US$19 billion into the Timor-Leste Petroleum Fund, Timor Leste’s sovereign wealth fund.
The Ambassador told the conference the Timor Leste government is hoping to negotiate an air services agreement next year with PNG, as it has already concluded with Indonesia, Singapore and Australia.
‘Air connectivity is so important–without that, you cannot build a tourism industry.
‘So we are also undertaking a major road construction around the country, to really connect all 13 municipalities, ports and airports.
‘In the south, three major towns will be built.’
‘…developing the resources in the area, especially Greater Sunrise, will unleash a huge amount of work and investment.’
The Asian Development Bank says Timor-Leste’s road network includes over 1400 km of national roads, over 860 km of district roads, and about 3000 km of rural roads. Around 70 per cent of the roads are judged to be in poor condition.
The World Bank says a new 110 km road providing a new corridor from the north to the south of the country, will connect the districts of Dili, Aileu and Ainaro through the rugged central highlands, which jointly account for a third of the country’s population and much of the country’s coffee industry.
‘The country needs serious investors,’ said Ambassador Guterres. ‘We hope we can attract them with good tax incentives.’
Consultant Ernest & Young has recently released an investment guide to the country, which can be downloaded here.