TIMOR-Leste president Francisco Guterres has approved use of the nation’s sovereign wealth fund – earned from petroleum revenues – for a US$650 million purchase of ConocoPhillips’ and Shell’s shares of the Greater Sunrise gas project.
The president earlier vetoed the bill allowing the use of the fund, suggesting the monies could be misused, and suggested the proposal would have to first be revised, however having won the approval of parliament Guterres was forced to ratify the unaltered terms.
Reuters says the decree removes the 20% ceiling on state participation in hydrocarbon projects and will allow Greater Sunrise and other projects "to bypass approvals by parliament in future".
The tiny nation moved first on ConocoPhillips, and then Shell, last year to take their interests in the long-stalled development.
That has increased the nation's share of the project to over 56%, making it the majority stakeholder over operator Woodside Petroleum and giving it leverage to push for its preferred development concept of an LNG plant onshore Timor-Leste, rather than Woodside's plan of sending the gas to Darwin.
A permanent maritime boundary with Australia was agreed between the two nations' foreign ministers in April.
The terms of the production sharing contract would see the small nation take 70% of revenue should the gas be sent to its shores and 80% if the plant is developed in Australia.
Source: Energy News Bulletin
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