Subject: LUSA: Dili gov't passes milestone oil legislation

East Timor: Dili gov't passes milestone oil legislation

Dili, Dec. 17 (Lusa) - East Timor's government has approved a landmark law that paves the way for foreign companies to obtain oil and gas exploration licenses that are expected to generate significant hydrocarbon revenues for one of Asia's poorest nations.

The petroleum legislation was passed by the Dili cabinet Thursday and will be endorsed by Timor's National Assembly in coming weeks.

The new law allows international energy companies to begin exploring the new nation's offshore and onshore oil and gas reserves.

Besides the hydrocarbon-rich existing Timor Sea, there are indications of other significant oil and gas deposits around the Oecussi enclave and on Timor's south coast between the districts of Cova Lima and Viqueque.

A petroleum fund to manage oil revenues is also created under the new legislation.

Timor looks to its burgeoning energy sector as a major source of future income to ease its current dependency on foreign aid.

Dili shares some of its Timor Sea oil and gas reserves with Australia and is trying to iron out a dispute with Canberra over the division of the area.

EL/CJB Lusa

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