East Timor President Francisco Guterres has approved a proposal that allows the use of the country’s petroleum fund for a $650m buyout of Royal Dutch Shell and ConocoPhillips’ stake in the Greater Sunrise gas project in the Timor Sea.
Last month, Guterres vetoed the decree saying it could allow misuse of the petroleum funds and called for its revision. It subsequently won support from the parliament.
According to East Timor law, a bill can be vetoed only once by the president, who must then approve it after it obtains the vote of approval from the parliament.
With stake acquisitions from Shell and ConocoPhillips, East Timor will get a majority share in the project. Remaining partners in the project are Australia’s Woodside Petroleum and Osaka Gas in Japan.
Eliminating a 20% cap on state participation in oil projects, the proposal allows Sunrise and other projects to bypass approvals by parliament going forward.
According to a statement from Guterres’ office as quoted by Reuters, the president ‘promulgated’ the decree as required by law.
Guterres’ chief of staff Fransisco Maria de Vasconcelos said that the approval ‘does not mean a political or legal judgment favourable to said decree’.
The Greater Sunrise fields were discovered in 1974 and hold around 5.1 trillion cubic feet of gas.
The project joint venture proposes to develop the Greater Sunrise gas and condensate field, which is located in the Timor Sea 450km north-west of Darwin and 150km south of East Timor.