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East Timor has decided to create a national oil company, in keeping with best international practice. As a new country with a nascent democracy and acute development needs, its priorities concern national control over the resources and leveraging oil and gas development for greater economic prosperity. What can East Timor learn from the trial and error of other producers? This paper will examine governance challenges in the sector and draw from international experience to find solutions to these. We will focus on the relationship between the national oil company and the state and the governance mechanisms that would both enable the company and ensure adequate state control over the sector.

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