East Timor President Fransisco Guterres has approved a decree allowing use of the country’s petroleum fund for the $650-million acquisition of the Royal Dutch Shell PLC and ConocoPhillips’s interests in the Greater Sunrise gas-condensate fields in the Timor Sea.
Guterres had previously vetoed the proposal, saying at the time that it could allow the petroleum funds to be misused. He called for the proposal to be revised.
The proposal, however, has since been overwhelmingly endorsed by the East Timor Parliament and, under the country’s law, the president can veto a bill only once. He must then ratify it if the bill wins parliamentary approval.
The acquisitions became public last year. In October 2018 ConocoPhillips said it would sell its 30% interest in the fields for $350 million. Shell followed suit the following month when it announced East Timor’s agreement to buy the major’s 26.56% interest for $300 million.
The acquisitions were subject to approval by the East Timor Council of Ministers and Parliament.
This recent presidential approval removes a 20% cap on state participation in oil projects and enables Sunrise—and other projects—to bypass approvals by Parliament in future.
The fields straddle the maritime boundary between Australia and East Timor and a long-running dispute over the border delayed the project development for many years. The border dispute was settled between the two countries in 2018.
The Greater Sunrise gas project involves development of Sunrise and Troubadour gas fields, which were discovered by the Woodside Petroleum Ltd.-led joint venture in 1974. The fields are estimated to hold a total of 5 tcf of gas and 226 million bbl of condensate.
Woodside and former partners have consistently resisted East Timor’s calls for development of Greater Sunrise via a pipeline to an LNG plant on the country’s south coast, preferring a plant to be in Darwin on Australia’s north coast.
Woodside remains operator with 33.4%. The remaining 10% is held by Osaka Gas Co. Ltd.
