President of Timor-Leste vetoes changes to the oil operations law

12 December 2018

The President of Timor-Leste (East Timor) has vetoed a set of amendments to the oil operations law focused on financing the purchase of two holdings in the Greater Sunrise field consortium, the President said in a statement.

Francisco Guterres Lu-Olo, speaking at the Presidential Palace in Dili, presented five reasons to justify the decision to veto the bill, questioning aspects such as the removal of the need for prior approval by the Chamber of Auditors, the retroactivity of the proposed changes and the lack of information and knowledge of Members when they voted for the changes in question.

Cited by Portuguese news agency Lusa, the President also noted a wish to “avoid excessive extension of the policies and rules of direct investment by the Oil Fund,” with changes that could “distort or dilute the difference between financial assets and other assets.”

The constitution of Timor-Leste provides that in the event of a presidential veto the bill should be reconsidered by the National Parliament, which has up to 90 days to confirm it by an absolute majority, then return it to the President who is then required to approve it within eight days.

The veto affects the agreed purchase of the 30% interest owned by ConocoPhillips and 26.56% by Shell in the Greater Sunrise field, for which Timor-Leste has committed to pay US$350 million and US$300 million, respectively.

Both deals, the first in October with ConocoPhillips and the second in late November with Shell were dependent on the approval of the Timor-Leste government and parliament as well as regulators.

The Greater Sunrise oil field consortium in the Timor Sea is led by Australia’s Woodside, which owns 33.44% of the capital and includes ConocoPhillips (30%), Shell (26.56%) and Osaka Gas (10%).

The Greater Sunrise fields hold estimated reserves of 5.1 trillion cubic feet of gas and are located in the Timor Sea, approximately 150 kilometres southeast of Timor-Leste and 450 kilometres northwest of Darwin, in Australia. (macauhub)