25 Nov 2012

East Timor oil revenue restriction may be debated

10:48 am on 25 November 2012

New Zealand's ambassador to East Timor says big questions hang over how it spends its oil revenues.

Tony Fautua says Timor has huge problems of under-development and its only real source of revenue is royalties from companies drilling for oil and gas in the sea between Timor and Australia.

Mr Fautua says so far this has produced $US10.6 billion which sits in a trust fund in New York.

The ambassador says it is up to the Timorese to manage this but under the constitution a limit of about 3% of the funds are permitted to be spent each year. He expects further debate on this in light of the country's poverty and under-development.

New Zealand peacekeepers withdrew from the country in early November after 13 years of on-and-off deployment.