The Petroleum Fund of Timor-Leste was established under the provisions of the Petroleum Fund Law, which was promulgated on 3 August 2005. The Petroleum Fund Law was amended on 23 August 2011.
The Petroleum Fund Law:
A Management Agreement between the Ministry of Finance and the Central Bank of Timor-Leste was signed in 2005. This was amended in June 2009 and its annex 1 was then amended in October 2010.
The Petroleum Fund Law requires that all petroleum revenues are entirely transferred to the Fund and invested abroad in financial assets. The Fund’s only outgoings are transfers back to the central government budget, pursuant to parliamentary approval.
From 2005 to June 2009 the entire portfolio was managed by the Central Bank of Timor-Leste (formerly the BPA) and was invested in US Government bonds only.
In June 2009, the Bank for International Settlements (BIS) was appointed as the Fund’s first external manager to manage 20 per cent of the total Petroleum Fund and invested in a broader range of Government and Supranational bonds.
In October 2010, Schroder Investment Management, the Fund’s first equity manager, was brought in to manage global equity mandate amounting to 4 per cent of the total Petroleum Fund.
See Quarterly Reports and Monthly Performance Reports on Central Bank of Timor-Leste’s website for details on the performance of the Fund’s portfolio.
The Petroleum Fund governance model is based on a high degree of transparency and disclosure of information to help build public support for wise management of petroleum revenues and to reduce the risk of bad governance.
As the Executive, the Government through the Ministry of Finance is responsible for the overall management of the Petroleum Fund, on behalf of the people of Timor-Leste.
The Petroleum Fund Law makes the Government accountable to Parliament through various reporting requirements.
The operational management is currently carried out by the Central Bank of Timor-Leste, which invests the Fund’s capital according to guidelines established by the Ministry of Finance and mandates developed by the Investment Advisory Board.
The Ministry of Finance is required to seek advice from the Investment Advisory Board before making decisions on any matter relating to the investment strategy or management of the Petroleum Fund.
Investment Advisory Board
Advisory board rules and minutes are available on the Central Bank of Timor Leste’s website:
Seminars and Presentations
Governance and Management