Major changes in the organization of the Timor-Leste Energy and Natural Resources sector have just been approved and came into force on 7 September. Recent developments in the oil and mineral resources sector together with a change in strategy following the appointment of the IX Constitutional Government, has justified an update of the structure and functioning of the public entities involved in this critical sector, in order to make them more efficient, transparent and in line with the legislation in force and the state of the international energy and mineral resources industries:

• Decree-Law No. 59/2023 (Ministry of Petroleum and Mineral Resources Framework Law):

The Government has approved a new Framework Law for the Ministry of Petroleum and Mineral Resources, adopting a more dynamic and efficient structure capable of meeting emerging technical requirements, particularly in terms of prospecting, exploration and marketing of petroleum and mineral resources. Other areas of growing interest in the energy sector, such as carbon capture and storage (CCS) and hydrogen are also addressed for the first time.

• Decree-Law No. 60/2023 (amending the framework governing the Institute of Petroleum and Geology):

The organization and mission of the Institute of Petroleum and Geology has been updated to ensure a better knowledge of geological resources, including a vast number of research disciplines in the field of geosciences (geological mapping; oil prospecting; geotechnics; hydrogeology; etc.). The Institute has also been renamed as the Timor-Leste Geosciences Institute (Instituto de Geociências de Timor-Leste), and new governance rules have been approved.

• Decree-Law No. 61/2023 (amending the rules governing the National Oil Company, TIMOR GAP, E.P.):

The corporate governance structure of TIMOR GAP, E.P. has been adapted to the organization usually followed by international energy companies and national energy companies and its scope of action has been broadened in order to better meet the challenges of the energy transition. The changes have also focused on greater transparency and an increased focus on its core areas of activity, thus improving its efficiency.

• Decree-Law No. 62/2023 (on the National Petroleum Authority):

The Government has decided to separate the mining and oil and gas regulatory roles, reverting back to the original structure of the National Petroleum Authority (ANP). This is expected to improve the efficiency of the supervisory powers of the authority in the oil and gas sector, and allow it to concentrate on this critical mandate, including in the Greater Sunrise Special Regime Area. Changes have also been made to the ANP’s governance structure considering the lessons learned over the years and the challenges facing the sector.

• Decree-Law No. 63/2023 (creates the National Mining Authority):

With the removal of the minerals portfolio from the ANP, the Government has created the National Mining Authority, as a regulator exclusively responsible for this important sector of the economy. This new Authority will establish and monitor the levels of compliance with the legal and regulatory standards in force relating to exploration, research, development, production, transportation, processing and marketing of mineral resources and other related matters.

• Decree-Law No. 64/2023 (dissolution of CMTL, S.A., and creation of Murak Rai Timor, E.P., the new State-owned mining company):

Considering that a critical review of the performance and structure of CMTL, S.A. (created as a fully government owned private law company) concluded that it was not suited to the state of evolution of the mining sector in Timor-Leste, the Government decided to dissolve the company and create a new State-owned Company, MURAK RAI TIMOR, E.P. The new entity will have a more efficient structure that is aligned with the strategy and priorities of the government for the sector, which is expected to ensure that the State and the people of Timor-Leste fully and effectively benefit from mining activities.

In addition to the above, the statutes now approved have dismissed all members of the Boards of Directors and certain other management positions of the existing entities, and new appointments are expected in the coming days.

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