Timor Leste President Vetoes Sunrise Bill
The president of Timor Leste (East Timor) has exercised his veto over a government bill to use the country's sovereign wealth fund to pay for the $650mn acquisition of a majority 56.56% interest in the Sunrise gas project.
President Francisco Guterres said in an official statement December 11 that he was exercising his veto to avoid the excessive use of direct investment with Petroleum Fund monies. He said he received the government proposal November 16 from the president of the national parliament.
Reuters news agency reported December 13 that the proposal would remove a 20% cap on state participation in oil projects and let Sunrise and other projects bypass parliamentary approval, that the veto would potentially delay the acquisition of the Sunrise stakes from Shell and ConocoPhillips, and that Guterres had called for the proposal to be revised.
The government of Timor-Leste agreed in November 2018 to pay Shell US$300mn for its 26.56% stake in the Greater Sunrise field, a little over one month after it agreed to pay ConocoPhillips US$350mn for its 30% interest in the same asset.
Australia's Woodside operates the undeveloped Greater Sunrise project with a 33.44% interest, while the other non-state partner is Japan's Osaka Gas with 10%. The fields, 150 km southeast offshore Timor Leste and 450 km northwest of Darwin in Australia, were discovered in 1974 and hold gross contingent resources of 5.13 trillion ft3 of gas and 225.9mn barrels of condensate. In August the Timor Leste government reiterated its desire for a tie-back to a proposed liquefaction project in Timor-Leste, rather than developed as a floating LNG asset.
If the government does complete on the 56.56% stake, it would leave it highly reliant on Woodside to develop the project.
The Timor Leste sovereign wealth Petroleum Fund held US$16.47bn as at end-October 2018; the country has 1.3mn people.