Timor-Leste’s Oil: Blessing or Curse? – Analysis

Feb 20, 2018 | Viji Menon
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The oil and gas sector is the mainstay of Timor-Leste’s economy, with almost 90% of government revenue coming from oil. The non-petroleum economy, which scarcely existed at Independence is still very small, only about a quarter of the GDP. It is mostly generated by state spending for public administration, procurement, and infrastructure construction. Currently, the only non-oil export is coffee, whose value fluctuates with the weather and the global market. Nearly all the petroleum revenue Timor-Leste earns at present comes from the Bayu-Undan field in the Joint Petroleum Development Area established by the Timor Sea Treaty with Australia in 2002. To manage the oil revenue, Timor-Leste established the Petroleum Fund (PF) not long after it gained independence from Indonesia in 2002.