Regime Fiska lTimor-Leste & Kalkulasaun RSElaohamutuk.org/Oil/PetFund/revision/Watson16Aug2010Te.pdf•Fahe crude oil : produsaun kada loron; 50-70% ba AD •Natural gas 50% ba AD

Seminariu ba Sosiadade Sivil:Regime Fiskal Timor-Leste &

Kalkulasaun RSE

_____________________Alistair Watson

IMF Fiscal Affairs Department16 August 2010

Istoria

• Kontratu Fahe Produsaun (ka PSC) emitidu tuirTratadu Timor Gap 1991

– ZOCA Zona Koperasaun Area A

– Fahe 50/50

• Tratadu Tasi Timor 2001*

– ZOCA sai JPDA Area Dezemvolvimentu Petroleu Konjuntu

– Fahe 90/10

– Aneksu F: re-emitidu PSCs ho termus hanesan ba BayuUndan (03-12; 03-13) no Sunrise (03-19; 03-20)

2

* Timor-Leste ratifika TST iha 2002; Australia iha 2003

MAPA

3

4

Regime Fiskal ihaTimor-Leste

Bayu

Undan

Sunrise

(parte

JPDA )

Area

JPDA foun

(Kitan)

Area

esklusivu

T-L foun

ZOCA PSC

+Apendis X

90%

TBUCA

10% Lei

Taxa

Australia

ZOCA PSC

IUA

90% Lei

Impostu

Indonesia

99

10% Lei

Impostu

Australia

PSC foun

90% Taxes

and Duties

Act

10% Lei

Taxa

Australia

Tra

tadu

TasiT

imor

CMATS (fahe 50/50

receitas tomak

husi upstream

Fahe

Produsaun

Impostu T-L Impostu

AustraliaTratadu

seluk

PSC foun+ 20%

Estadu

Partisipa

100%

Taxes and

Duties Act

La Aplika

T-L

Pet.

Act

Bayu Undan

• Kontratu Fahe Produsaun (ka PSC)

– ZOCA

– Amenda ho Apendis X atu fasilitadezemvolvimentu gas tomak

• Taxa Timor-Leste nian 90%

– Taxation of Bayu Undan Contractors Act (ToBUCA)

– 30% Impostu

– Adisiona Taxa Lukru

5

Bayu Undan

6

T-L Impostu

10% First Tranche Petroleum (FTP)

Lukru Mina-rai

Autoridade Designadu(ANP)

Kontrator

Kontrator

Kontrator

• FTP• Rekupera Kustu• Lukru mina-rai

x 30% Impostu

Adisiona Taxa Lukru22.5% husi cashflow > 16.5% IRR

Receitas Mina-rai Timor-Leste• 90% husi AD nia FTP• 90% husi AD nia Lukru Petroleu

• Impostu• APT (Additional Profits Tax)

• 127% Kreditu Investimentu• Explorasaun• Kapital• Non-kustu kapital

Total Produsaun

1

2 Rekupera kustu

3 • Condensate 50% ba AD • LPG and Gas 40% ba AD

• Fahe hanesan ho Lukrupetroleu

90% receitas

kuran: 90% husikustu deduzivel

= Taxable income

ANP

AustraliaTax

10% receitas

kuran: 10% husikustu deduzivel

x 30% Impostu

= Taxable income

Fahe Produsaun

Fahe Reseitas LNG

• FGSPA = Feed Gas Sale and Purchase Agreement

• LNG SPA = LNG Sale and Purchase Agreement

• FGSPA no LNG SPA “back-to-back”

7

Upstream Joint Venture

Darwin LNGKadoras Japaun

FGSPA

LNG SPA

LNG

1. Upstream hetan 100% husi reseitas LNG

2. Upstream selu ba LNG no Kadoras:

– Capacity Reservation Charge (fixu)

– Operating Cost Charge (kustu atual)

3. CRC kalkula atu fo DLNG no Kadoras 8% retornu fixu ba investimentu durante tinan15

4. Upstream hetan 100% husi presu LNG ne’ebesa’e ka tun

8

Kalkulasaun LNG

• Upstream lakon iha presu tun, maibe hetan diak kuandu presu sa’e• Maximiza Timor-Leste nian parte ba presu sa’e

9Nota: figura hirak ne’e para usa halo ilustrasaun deit

Sunrise

• Tratadu Tasi Timor

– Repartida 20.1% JPDA; 79.9% Australia

• Akordu Unitizasaun Internasional (IUA)

– Dezemvolvimentu Unitizadu

– Planu Dezemvolvimentu

– Hafolin fa’an gas ba parte JPDA nian• 10.5% pre tax rate of return to LNG and Pipe

• 14% pre tax rate of return to FLNG

• PSC 03-19 no 03-20 ba JPDA

• Lisensa Australia nian ba area iha JPDA nia liur10

JPDA – upstream (20.1%)

First Tranche Petroleum

(FTP)Kontrator

Kontrator

AutoridadeDesignad (AD)

Kontrator

Produsaun

Rekupera Kustu

• Kredit Investimentu• Esplorasaun• Kapital• Non-Kapital

Timor-LesteIncome Tax

90% husi reseitas no kustu

AustraliaIncome Tax 10%

of revenues and costs

Rendimentu Kontratornian

Kuran: Kustu Deduzibel

• Explorasaun (depr*)• Kapital (depr)• Kustu operasaun

= Taxable Income

x 30% Income Tax

x 15% Branch Profits Tax(husi sisa )

LukruPetroleu

PRRT * Income Tax

RendimentuKontrator nian

Kustu dahuluk + Uplift• Explorasaun: (LTBR**+15%)• Seluk: (LTBR+5%)** LTBR = Long Term Bond Rate

Kuran: Kustu Operasan

= Rendimentu KontratorLikidu

x 40% = PRRT

Kuran: Kustu Deduzibel• Explorasaun: Imediatamente• Kapital: Depresiasaun• Kustu operasan

Kuran: PRRT selutiha ona

= Taxable Income

x 30% = Income Tax

RendimentuKontrator nian

Australia (79.9%)

PSC Income Tax

Taxable Income

30% Income Tax

• Fahe crude oil :produsaun kada loron; 50-70% ba AD

• Natural gas 50% ba AD

AutoridadeDesignadu (AD)

* PRRT = Petroleum Resource Rent Tax

PRRT no Income tax

Kolekta rendimentu total no fahe 50:50 tuir CMATS

* depresiasaun

Rendimentu Kontratornian

Kuran: Kustu Deduzibel

• Explorasaun (depr*)• Kapital (depr)• Kustu operasaun

CMATS

12

TL FTP Australia FTP

Timor Profit Oil

Australia Profit Oil

Timor Income Tax

Timor Branch Profits Tax

Australia Income Tax

JPDA

PRRT

Income Tax

Australia

• Timor kolekta A

• Australia kolekta B + C

• Australia selu ba Timor (A + B + C)/2 – A

• Timor no Australia ida-ida simu 50%

A B C

TL no Australia konkordahakotu diskusaun konaba

fronteira maritima duranteprojeitu Sunrise nia moris

JPDA foun

• Introdus regime foun iha 2005

• Aplika ba projeitu foun ne’ebe deit iha JPDA*

• Konkorda ho Australia konaba PSC foun

• Timor-Leste aplika Taxes and Duties Act ho 90%

• Australia nian impostu ho 10%

• Kitan tuir eskema foun ne’e maibe iha karakterisku rekupera kustu balunnafatin tuir eskema tuan

13

JPDA Foun

14

T-L Impostu

5% ba ANP (royalty)

Lukru Petroleu

AutoridadeDesignadu (ANP)

Kontrator

Kontrator

• Rekupera Kustu• Lukru Petroleu

x 30% Impostu

Supplemental Profits Tax22.5% of cashflow > 16.5% IRR

Reseitas Petroleu Timor-Leste• 90% husi AD nia Royalty• 90% husi AD nia Lukru Petroleu

• Impostu• SPT (Supplemental Profits Tax)

• Explorasaun• Kapital• Operasaung• Uplift on unrecovered costs

@Bond Rate + 11%

Total Produsaun

1

2 Rekupera Kustu

3 • 40% to ANP

90% reseitas

Kuran: 90% husikustu deduzibel

= Taxable income

ANP

AustraliaTax

10% reseitas

Kuran: 10% husikustu deduzibel

x 30% Impostu

= Taxable income

Fahe Produsaun

Area Esklusivu Timor nian

• Introdus iha 2005

• Aplika ba projeitu foun ne’ebe deit iha JPDA niali’ur

• PSC – hanesan ho JPDA foun, maibe TL mos ihaopsaun atu hola parte 20% iha projeitu foun

• Timor-Leste Taxes and Duties Act ho 100%

– 30% impostu

– 22.5% SPT, retornu husi investmentu liu 16.5%

– (SPT hanesan ho APT Bayu Undan nian)15

Kalkulasaun RSE

____________________

Reseitas Petroleu

Buat diak atu hetan maibe…

• Temporariu

• insertezia

• Volatil

Se konsumu hotu reseitas ne’e kuandu simu:

• Inflasaun

• Potensial atu gasta

• Susar atu halo adjustamentu kuando reseitashotu… 17

Fundu Petroleu

Philosophia:

• Hadiak konsumsaun reseitas mina-rai nian

• Minimiza impaktu volatilidade hosi presu mina-rai

• Insuladu ekonomia; evita inflasaun

• Rai rikusoin ba jenerasaun futuru nian

Lei FP:

• RSE hanesan referensia ba gasta (osan) ho sustentavel

• Bele hasai a’as liu (RSE) maibe tenke fo justifika, hetan sertifikasaun no aprova husi parlamentu 18

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

ESI example

Rendimentu Sustentavel

• Halo $100 kadatinan ba tinan 5

• Sai ba $14 kadatinan infinitivu…

19

Revenue

Sustainable Income

Rendimentu Sustentavel

• asumi 3% hanesan retornu investimentu nian

• Gasta 3% husi valor reseitas futuru nian

• Rai restu; estabelese fundu investimentu

• Reseitas (mina-rai) para/hotu, gasta deit retornu investimentuba infinitivu 20

Year 1 2 3 4 5 6 7 8 9 10

500 Revenues 100 100 100 100 100

Financial assets 0 86 175 267 361 458 458 458 458 458

Revenues Added 100 100 100 100 100 0 0 0 0 0

Withdrawals 14 14 14 14 14 14 14 14 14 14

3% Investment return 0 3 5 8 11 14 14 14 14 14

Closing balance in fund 86 175 267 361 458 458 458 458 458 458

Rendimentu Sustentavel Estimadu

• Lei Fundu Petroleu Artigu 9

– Labele transfere a’as liu husi RSE a não ser bele justifikakatak ne’e iha interese Timor-Leste nian ba tempu naruk

• Kalkulasaun RSE in Aneksu 1 husi LFP

– Rikusoin Petroleu x 3%

• Rikusoin Petroleu=

– Balansu Fundu Petroleu

– Valor ohin loron nian husi Reseitas Fundu Petroleu ihafuturu

• Discount rate ba valor ohin loron = US bond rate = asumi hanesan retornu investimentu real

Kalkulasaun RSE

Aneksu 1 Lei Fundu Petroleu

1. Estimasaun balansu fundu petroleu iha tinan ne’eremata

2. Projete reseitas petroleu ba tempu projeitu niamoris

3. Kalkula media US bond rate ba periodu hanesan ho reseitas petroleu

4. Kalkula NPV ba reseitas futuru nian

5. Fundu Pet. + NPV = Rikosin Petroleu x 3% = RSE

Projesaun

• Produsaun• Presu mina-rai• Presu produtu• Kustu upstream• Kustu downstream

23

CashflowsProjeitu nian

Regime Fiskal

ReseitasTimor-Leste

• Regulamentu PSC• Regulamentu Impostu

• FTP• Lukru mina-rai• Impostu• APT• Taxa seluk

Projesaun Bayu Undan nian

240

500

1,000

1,500

2,000

2,500

$m

m m

on

ey o

f th

e d

ay,

no

tim

e v

alu

e o

f m

on

ey d

isco

un

t

Timor-Leste Petroleum Revenues

Other

BU Additional Profits Tax

BU Income tax

BU Profit oil

BU FTP

RSE 2010

25

Balansu projetadu iha 1 Janeiru 2010 $5.2 Bn

Reseitas Petroleu hosi 2010 $13.1 Bn

Valor agora husi reseitas futuru nian $11.4 Bn

Rikusoin Petroleu $16.7 Bn

RSE (rikusoin petroleu x 3%) $502 M

Dadus husi JV operator

• Prefil Produsaun – Ki’ik, Baze, A’as

• Kustu kapital Upstream nian

• Kustu operasaun Upstream nian

• Kustu kapital Downstream nian

• Kustu operasaun Downstream nian

• Projesaun reseitas – “calibration case”

• Analisa konaba mudansa husi projesaundahuluk nian

Dadus seluk ne’ebe kolekta

• ANP: Condensate no LPG shipments no presurealizadu relativa ba WTI

– Cek COP nia produsan no analisa diferensia

• NDPF: reseitas Fundu Petroleu atual

– Rekonsilia ho projesaun dahuluk nian

• NDPR: Taxa no reseitas

– Rekonsilia ho projesaun dahuluk nian

Presu Mina-rai

28

0

20

40

60

80

100

120

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

20

22

20

24

20

26

20

28

20

30

West Texas IntermediateAverage price per year

WTI Actual

EIA low case used for budget 2010

Mudansa iha RSE

408 401

502

27

5 8

21

93

0

100

200

300

400

500

600

Budget09 2009 ESI

Budget09 2010 ESI

Oil prices Production LNG prices Discount Rate

Misc. changes

Budget 2010

$m

m

ESI Budget 2010Changes from Budget 2009

Analiza Sensitivu

6

15

5

10

15

39

86

6

11

5

10

39

99

86

375 400 425 450 475 500 525 550 575 600 625

Downstream operating costs +/- 10%

Upstream operating costs +/- 10%

JCC differential -12.5% to -4.0% of WTI; Basecase -7.5%

LPG differential 60% to 70%; basecase 65%

Condensate differential -15% to -5%; basecase -10%

Discount rate 3.5% ; base case 2.6%

LNG prices "Slope" high 0.1580, low 0.1225, base case 0.14025

Expected case versus Low case production; Basecase = Low

Oil price +/- $10

Estimated Sustainable Income $mm

Sensitivity analysis Estimated Sustainable IncomeBudget 2010