31 January 2019

Informasaun sala no faktu sira kona-ba projetu Greater Sunrise

Iha fin Setembru 2018, Timor-Leste no ConocoPhillips fó sai katak kompañia ConocoPhillips sei fa’an nia partisipasaun 30% iha Konsórsiu Greater Sunrise nian ba Timor-Leste ho tokon $350. Hafoin fulan ida tuirmai, Shell konkorda atu fa’an ninia partisipasaun 26.56% ho tokon $300 tan. Timor-Leste debate hela lei no orsamentu hodi bele implementa ba tranzasaun sira ne’e.

Tanba akontesimentu sira ne’e, hamosu diskusaun ho artigu oin-oin ne’ebé hakerek husi jornalista sira, ukun na’in no matenek na’in sira. Infelizmente komentáriu barak la fó kontextu loloos no inklui informasaun ne’ebé laloos. La’o Hamutuk publika lista ne’e iha kraik kona-ba kompriensaun públiku sira ne’ebé sala ho faktu sira ne’ebé relevante, hodi ajuda públiku atu komprende di’ak liután asuntu ida ne’e. Ami espera katak artigu ne’e sei hadi’ak liu kualidade no halo loos iha reportajen oin mai.

Hodi hetan informasaun tan iha Inglés, ne’ebé atualizadu regulármente, kona-ba projetu Sunrise no Timor-Leste nia partisipasaun, haree iha http://www.laohamutuk.org/Oil/Sunrise/18SunriseBuyout.htm.

Kompriensaun sala Faktu loloos
Timor-Leste sei sosa partisipasaun (ka stock / ekidade / ações / asaun / saham) iha ConocoPhillips no Shell. Kompañia sira ne’e konkorda ona atu fa’an sira nia parte iha Konsórsiu Sunrise nian ba Timor-Leste. Modelu negósiu hanesan ne’e la’ós sai buat ne’ebé foun iha indústria petróleu nian. Maibé, atu hola parte iha konsórsiu la hanesan bainhira ita sosa kompañia ida nia partisipasaun ka stock ne’ebé fasil atu fa’an fila fali lahó obrigasaun tan. Partisipante sira iha konsórsiu hanesan ne’e iha kompromisu ona atu investe dolar biliaun balun tan no mós fahe responsabilidade hodi jere projetu. Bainhira troka na’in husi konsórsiu ne’e, tenke hetan aprovasaun husi partisipante sira seluk.

Iha mundu tomak poténsia ba projetu petróleu barak mak iha lukru aas liu duké Greater Sunrise. Nune’e, posibilidade boot katak kompañia lejítimu sira ho esperiénsia sei la iha interese iha Sunrise bainhira sira la hetan benefísiu espesiál.
Negósiu sira ne’e hatudu katak kompañia boot sira tau fiar ba Timor-Leste nia kapasidade hodi kaer projetu Sunrise. Shell no ConocoPhillips sei la envolve tan iha projetu Sunrise. Sira kontente hodi simu Timor-Leste nia osan bainhira sira husik projetu ne’ebé sei la dezenvolve tuir dalan ne’ebé sira fiar bele hetan lukru boot liu.
Pipa husi Sunrise to’o Beaçu ne’e teknikamente la posivel. Maski karik ne’e loos iha tinan 15 liubá, ohin-loron ema hotu konkorda katak bele dada pipa gas hakat liu iha tasi okos Timor Trench (trinxeira), parte tasi nian ne’ebé kle’an no naruk tebes entre Sunrise no Beaçu.

Maibé, ida ne’e sei karun liu no iha risku boot liu duké modelu dezenvolvimentu sira seluk.
La presiza halo análize ka komparasaun ba opsaun alternativu hodi dezenvolve Sunrise. La’o Hamutuk fiar katak dezenvolvimentu sira ba oin presiza maximiza benefísiu ba povu Timor-Leste, no iha tempu hanesan presiza minimiza kustu no risku. Opsaun hotu ne’ebé iha posibilidade presiza haree didi’ak husi peritu independente sira, hodi nune’e bele foti desizaun ne’ebé bazeia ba ekonomia husi projetu. Proponente sira ne’ebé hakarak dada pipa ba Beaçu seidauk fó sai ba públiku (ka seidauk halo) komparasaun atuál ho opsaun sira seluk, ezemplu hanesan dada pipa ba planta LNG Darwin ne’ebé eziste hela ka planta LNG namlele, no ita la hatene publikasaun hanesan ne’e iha  ona ka lae.
Timor-Leste nia investimentu tomak iha projetu ida ne’e mak tokon $650. Partisipante sira iha konsórsiu iha responsabilidade atu selu sira nia parte husi kustu kapitál no kustu operasaun ba projetu ne’e, atu simu fila fali parte husi nia lukru. Ida ne’e iha adisionál ba tokon $650 hodi sosa partisipasaun 56.56%, Timor-Leste sei presiza atu investe tan biliaun $10 resin hodi fasilita produsaun ba mina no gas husi Sunrise.
Presiza muda lei hodi negósiu fa’an-sosa sira ne’e bele la’o ba oin. Sosa partisipasaun iha Sunrise bele la’o ho lei ne’ebé en vigor, nune’e la presiza halo alterasaun ba Lei Atividade Petrolíferu no. 13/2005.
Prezidente veta partisipasaun iha projetu Sunrise. Prezidente la veta ba partisipasaun iha konsórsiu ne’e, tanba lejizlasaun ne’ebé aprezenta ba nia la inklui partisipasaun ne’e. Alterasaun ba Lei Atividade Petrolíferu no. 13/2005 ne’ebé hetan veta inklui artigu ida ne’ebé permite osan husi Fundu Petrolíferu bele uza ba investimentu direta iha TimorGAP, no artigu ne’e kontra Lei Fundu Petrolíferu no. 9/2005 (ne’ebé altera iha tinan 2011).

Maski nune’e, iha dalan seluk atu bele finansia projetu ne’e, inklui mós liu husi Orsamentu Estadu. Orsamentu Estadu 2019 ne’ebé aprova ona husi Parlamentu molok hetan veto husi Prezidente no re-apresiasaun iha Parlamentu, inklui tokon $650 hodi sosa partisipasaun, maibé seidauk submete lejizlasaun ruma atu finansia dolar biliaun balun ba investimentu ne’ebé projetu Sunrise sei presiza.
Timor-Leste presiza altera Lei Atividade Petrolíferu hodi nia bele sai na’in ho partisipasaun liu 20% iha projetu petrolíferu. TimorGAP (kompañia públiku Timor-Leste nian) sai ona na’in ba partisipasaun 50% iha Kontratu rua Fahe Produsaun (KFP/PSC) iha rai maran, 100% iha PSC S0-15-01 iha tasi, no 24% iha PSC JPDA 11-106 iha tasi. Lei ne’ebé eziste daudaun la prevene Timor-Leste atu sai na’in ba 30% ka liu iha Sunrise, tanba limita 20% la aplika ba sosa partisipasaun.
Presiza dois tersu (deputadu/a na’in 44) ka maioria simples (deputadu/a na’in 33) husi Parlamentu hodi revoga Prezidente nia veta. Ita bele debate tópiku ida ne’e; Konstituisaun la klaru tanba asuntu prinsipál sira, inklui Orsamentu Estadu 2019, presiza 2/3 husi deputadu/a sira ne’ebé marka prezensa, maibé asuntu sira seluk presiza de’it maioria absoluta husi Parlamentu. Iha loron 10 fulan Janeiru, Membru Parlamentu na’in 41 vota a favór hodi kontra Prezidente nia veta ba alterasaun Lei Atividade Petrolíferu (iha ema ida de’it mak vota kontra, no Fretilin abandona plenária). Entaun, Prezidente promulga ona lei ida ne’e. Iha posibilidade katak tribunal sei presiza verifika legalidade husi lei ida ne’e.
Akordu fa’an-sosa sira mak komplikadu liu; nune’e Kámara Kontas iha Tribunal la bele halo avaliasaun. Lejizlasaun ne’ebé propoin sei hasai kontratu hotu-hotu no dokumentu legal seluk ne’ebé liga ba petróleu husi fiskalizasaun previa Kámara Kontas nian sei nafatin iha futuru. Ne’e la limita ba akordu fa’an-sosa, ka ba Sunrise, maibé bele mós aplika ba akordu finansiál ba projetu saida de’it ne’ebé iha relasaun ho petróleu.

Iha fulan Dezembru, Reprezentante Espesiál Xanana Gusmão hateten sai liu husi GMN-TV katak akordu fa’an-sosa mak komplikadu tebes ba Kámara Kontas atu bele kompriende, no Timor-Leste tenke fiar relatóriu ne’ebé taka ba públiku “Due Diligence/Uji Kelayakan” sira husi PriceWaterhouseCoopers (PWC). La’o Hamutuk fiar katak akordu sira nia kustu no kompleksidade mak sai razaun tanbasá presiza duni transparénsia, kontrolu ho balansu, no revizaun independente previa ba akordu sira-ne’e.
Públiku bele asesu akordu fa’an-sosa no relatóriu “Due Diligence” sira. Maski Reprezentante Espesiál ho fiar an tebes ko’alia ba públiku iha Sentru Konvensaun Dili (iha televizaun nasionál) katak dokumentu sira ne’e dokumentu públiku, maibé dokumentu sira seidauk bele asesu husi públiku, maski La’o Hamutuk halo pedidu tiha ona ba TimorGAP no Gabinete Fronteira Maritima hodi hetan dokumentu sira ne’e.
Lei Fundu Petrolíferu en vigor ne’e permite uza parte husi Fundu ne’e hodi investe ba Sunrise. Artigu 15.1 husi Lei Fundu Petrolíferu No. 9/2005 ne’ebé altera ona iha tinan 2011 temi espesifikamente katak investimentu hotu husi Fundu ne’e tenke iha rai li’ur. Parágrafu seluk iha Artigu 15 temi katak másimu 5% bele uza ba ‘investimentu elegíveis seluk’ (ez. buat seluk husi títulu no ekidade sira), no mós katak la bele halo investimentu liu 3% ba kompañia ida. Maski alterasaun ba Lei Atividade Petrolíferu loke posibilidade ba halo investimentu husi Fundu ba TimorGAP, ne’e la altera Lei Fundu Petrolíferu.

Parlamentu bele aloka osan liu husi prosesu Orsamentu Estadu hodi investe iha kampu Sunrise (proposta Orsamentu Estadu 2019 inklui tokon $650 hodi selu ba ConocoPhillips no Shell, no Fundu Petrolíferu sei finansia 88% ba Orsamentu Estadu). Nune’e hanesan dalan legal ba uza Fundu Petrolíferu atu bele selu parte husi Projetu Sunrise ne’ebé la afeta ba seguransa, transparénsia, no akontabilidade Fundu Petrolíferu nian.
Timor-Leste sei presiza selu multa ba kompañia sira se karik seidauk selu pagamentu iha fulan Marsu 2019 nia rohan. Akordu ho ConocoPhillips dehan katak se tokon $350 seidauk selu iha fulan Marsu nia rohan, Timor-Leste sei selu funan (la’ós multa) ba balansu ne’ebé seidauk selu. Ema balu dehan katak funan ne’e sei sai menus liu kompara ho retornu investimentu ne’ebé Timor-Leste sei simu husi Fundu Petrolíferu; nune’e Timor-Leste bele hetan benefísiu finansiál bainhira selu tarde. Ita la hatene se iha prazu fiksu hodi halo pagamentu ka lae.
Pagamentu ba Shell iha prazu to’o fulan Marsu 2020.
Osan hotu ne’ebé kompañia sira no Timor-Leste investe iha Projetu Sunrise sei hetan fila fali, ho aumenta tan 127%, hanesan saida mak akontese ba kompañia sira ne’ebé investe iha Bayu-Undan. (Atu dehan katak bainhira halo investimentu $100 sei simu osan fali $227). Parte husi fraze ne’e mak loos. Maski nune’e, Bayu-Undan nia rejime taxa hetan dezeña hodi prioritiza kompañia nia interese duké governu nian, no Sunrise sei la presiza uza sistema hanesan ne’e. Mezmu karik Sunrise uza regra sira ne’ebé hanesan, regra sira ne’e sei aplika de’it ba investimentu iha kampu (upstream), no sei la aplika ba sosa partisipasaun, ka ba pipa no planta LNG.

Bainhira fa’an gas, osan sira ne’e sei uza hodi selu fali investidór sira. Timor-Leste sei hetan 56.56% husi ne’e, ho fahe restu montante ba investidór sira seluk. Osan ne’ebé selu fali ba investidór sira sei hamenus totál taxa ne’ebé Timor-Leste sei simu husi produsaun mina no gas Sunrise nian. Nune’e karik kustu kapitál ne’ebé boot liu sei la fó benefísiu ba Estadu.
Timor-Leste simu ona liu biliaun $5 tanba halo diversifikasaun ba Fundu Petrolíferu nia investimentu iha ekidade internasionál hahú iha tinan 2012. Entre fulan Janeiru 2013 no fulan Novembru 2018 nia rohan, Fundu Petrolíferu simu ona biliaun $1.9 husi osan-funan; karik dezde uluk, Timor-Leste  investe de’it iha títulu sira, osan simu ne’e sei hanesan de’it. Investimentu ekidade sira sai boot ho valór biliaun $2.3 durante periodu ne’e bainhira ekidade sira nia folin la’o di’ak loos. Iha tempu ne’ebé hanesan, Fundu mós simu biliaun $6.9 husi reseita mina no gas no lakon biliaun $0.7 tanba mudansa iha valór ba moeda iha merkadu finanseiru internasionál.
Projetu Sunrise sei hetan susesu tanba Timor-Leste nia lider sira hakarak tebes atu halo ne’e sai susesu. Karik Timor-Leste hetan finansa ho kustu ne’ebé ki’ik no risku ne’ebé ki’ik, ho dezeñu, konstrusaun no jestaun Projetu Greater Sunrise nian la’o ho perfeitu, sei nafatin iha fatór balu ne’ebé Timor-Leste labele kontrola. Sunrise sei prodús LNG ba tinan 25, no folin gas naturál bele tun maka’as bainhira fonte sira ne’ebé la konvensional (hanesan fracking ka perfurasaun sízmiku ba rai maran) kontinua aumenta, ou bainhira enerjia renovavel troka mina no gas. Konsekuénsia sira husi mudansa klimátika bele rezulta iha nasaun sira atu halo taxa (ka bandu) sunu mina no gas, ne’ebé bele hafraku Sunrise nia ekonomia. La iha serteza ba buat hirak ne’e, maibé iha risku ne’ebé sériu.
Karik projetu ne’e hetan aprovasaun lalais liu, Greater Sunrise sei fó reseita nato’on ba Timor-Leste lalais hodi prevene Fundu Petrolíferu tun ba zeru iha maizumenus tinan sanulu ba oin. La’o Hamutuk halo estimasaun katak Timor-Leste nia Fundu Petrolíferu bele mamuk iha 2027, maski karik Estadu la gasta ka investe iha Projetu Sunrise. Karik Timor-Leste uza Fundu hodi investe (diretamente ka liu husi Orsamentu Estadu) iha Sunrise no Tasi Mane, iha posibilidade katak Fundu sei mamuk iha tinan hirak mai molok 2027.

Se karik buat hotu-hotu tuir planu, proponente sira Projetu Sunrise nian iha espetativa ba produsaun atu hahú iha tinan 2026 nia rohan. Maski nune’e, bainhira haree tuir esperiénsia husi Bayu-Undan no projetu sira seluk, ita bele haree reseita boot la mai to’o tinan rua hafoin produsaun komesa hala’o. Ne’e tanba foufoun produsaun bele la’o neineik no iha tempu hanesan investidór sira tenke hetan fila fali sira nia osan inan. Karik Projetu Sunrise implementa ho perfeitu, Timor-Leste sei enfrenta austeridade – situasaun laiha osan sufisiente atu selu ba servisu báziku. Só bele prevene ne’e bainhira halo diversfikasaun ekonomia ho lalais iha setór sira ne’ebé la’ós mina.
Karik Greater Sunrise la prodús reseita no lukru ne’ebé tuir espetasaun, instituisaun ne’ebé finansia projetu (liu-liu Xina) bele fó sansaun todan ba Timor-Leste. Ida ne’e halo ema preokupa, no iha posibilidade katak ne’e loos. Bainhira Kámara Kontas revee akordu empréstimu sira, ne’e sei hamenus perigu ida ne’e.

Iha nasaun balu, inklui Sri Lanka, Myanmar no Angola, akordu empréstimu obriga produsaun-na’in sira ba mina no gas tenke fa’an fali ba sira nia kreditór sira ho folin baratu liu duké folin merkadu nian, ka fó dalan ba ajénsia emprestido̒r internasionál sai na’in ba infrastrutura xave. Maski nune’e, se karik projetu hetan lukru boot duni, Timor-Leste sei la presiza asina akordu ne’ebé obriga kondisaun todan ba Timor-Leste - no, se karik projetu la hetan susesu, di’ak liu la implementa projetu.
Ita tenke halo parte hotu husi Projetu Tasi Mane ne’ebé proposta hela hodi lori pipa Sunrise mai Timor-Leste. Pipa Greater Sunrise no Projetu LNG, presiza infrastrutura iha kampu tasi-laran Sunrise nian; presiza mós pipa gas nian iha tasi okos no planta LNG, no kais ba ró boot sira iha Beaçu. La presiza auto-estrada iha kosta súl, refinaria iha Betano ka base fornesimentu lojistiku iha Suai (Suai Supply Base). Karik kansela no la kontinua ho komponente projetu sira seluk, ne’e la kria obstákulu tékniku ka ekonómiku atu kontinua projetu Beaçu LNG. Komponente ida-idak husi Projetu Tasi Mane tenke deside tuir ninia prosesu keta-ketak, ho análize independente no imparsiál ba kustu, benefísiu no risku.

16 January 2019

Misinformation and facts about the Greater Sunrise project

At the end of September 2018, Timor-Leste and ConocoPhillips announced that the company will sell its 30% share of participation in the Greater Sunrise Joint Venture to Timor-Leste for $350 million. A month later, Shell agreed to sell its 26.56% share for $300 million more. Timor-Leste is debating laws and budgets to implement these transactions.

These events have stimulated a lot of talking and writing by journalists, leaders and experts. Unfortunately, much of the commentary has included inaccurate context and factual errors. La’o Hamutuk is publishing this list of common misunderstandings, with relevant facts, to help people understand the issues better. We hope that it will also improve the accuracy of future reporting.

For additional, regularly updated, information about the Sunrise project and Timor-Leste’s participation, see http://www.laohamutuk.org/Oil/Sunrise/18SunriseBuyout.htm.

Misunderstanding Actual reality
Timor-Leste is buying shares (or stock / ações / asaun) in ConocoPhillips and Shell. The companies agreed to sell their ownership of parts of the Sunrise Joint Venture to Timor-Leste. This kind of deal is common in the petroleum industry. However, part of a joint venture is not the same as shares of a company’s stock, which can easily be resold and don’t involve additional obligations. Participants in a joint venture such as this commit to invest billions of dollars more and are responsible for managing the project. Changes in ownership must be approved by other participants.

The world contains many prospective petroleum projects which are likely to be more profitable than Greater Sunrise, and experienced, legitimate companies may choose to invest elsewhere unless special incentives are offered to buy into the Sunrise project.
The deals show that the companies trust Timor-Leste’s capability to carry out the Sunrise project. Shell and ConocoPhillips will no longer be involved in Sunrise. They are happy to receive Timor-Leste’s money in return for pulling out of a project that will not be developed in ways they believe are the most profitable.
A pipeline from Sunrise to Beaçu is not technically feasible. Although this may have been true 15 years ago, today everyone agrees that it is possible to run an undersea gas pipeline across the deep, steep Timor Trench between Sunrise and Beaçu.

However, it is likely to be more expensive and riskier than other development models.
There is no need to analyze or compare alternative development options for Sunrise. La’o Hamutuk believes that Sunrise development should maximize the benefits for Timor-Leste’s people, while minimizing costs and risks, and all possible options should be compared by independent experts, leading to a decision based solely on economics, not politics or ideology. Proponents of the pipeline to Beaçu have not released (or not done) recent comparisons of it with other options, such as a pipeline to the existing Darwin LNG plant or floating LNG.
Timor-Leste’s investment in this project will be $650 million. Participants in a joint venture are responsible to pay their portion of the capital and operating costs of the project, in return for receiving part of the profits. In addition to the $650 million to buy 56.56% participation, Timor-Leste will have to invest more than $10 billion to enable Sunrise oil and gas production.
Changes to legislation are required for these deals to move ahead. The Sunrise buy-in could proceed under existing law, without amending Petroleum Activities Law 13/2005.
The President vetoed participation in the Sunrise project. The President did not veto participation in the joint venture, as this was not in the legislation presented to him. The vetoed law amending Petroleum Activities Law 13/2005 includes a clause allowing the Petroleum Fund to be directly invested in TimorGAP, which contradicts Petroleum Fund Law 9/2005 (as amended in 2011).

However, there are other ways to finance the project, including through the State Budget. The 2019 budget approved by Parliament and pending Presidential promulgation or veto includes $650 million to purchase participation, but no legislation to finance the billions in investment that the Sunrise project will require has been submitted.
An amendment to the Petroleum Activities Law is needed to allow Timor-Leste to own more than 20% of a petroleum project. TimorGAP already owns 50% of two onshore Production-Sharing Contracts (PSCs), 100% of offshore PSC S0-15-01, and 24% of PSC JPDA 11-106. Existing law does not prevent Timor-Leste from owning 30% or more of Sunrise, as the 20% limit does not apply to purchased participation.
It requires two-thirds (44 Members) or a majority (33 Members) of Parliament to override a Presidential veto. This is subject to debate; the Constitution is ambiguous as major issues require 2/3 of those present, while others require an absolute majority of Parliament. On 10 January, 41 Members of Parliament voted to override the President’s veto of the amendment to the Petroleum Activities Law (only one voted against, as Fretilin walked out), and the effectiveness of this action may be tested in court.
The purchase agreements are too complicated to be evaluated by the Audit Chamber of the Appeals Court (Camara da Contas). The proposed legislation removes all petroleum-related contracts and other related legal documents from prior review by the Audit Chamber, forever. It is not limited to purchase agreements, or to Sunrise, and could also apply to financing agreements for any petroleum-related project.

In December, Special Representative Xanana Gusmão told the GMN-TV audience that the purchase agreements are too complicated for the Audit Chamber to understand, and that Timor-Leste should trust the undisclosed “Due Diligence” reports by PriceWaterhouseCoopers (PWC). La’o Hamutuk believes that the agreements’ cost and complexity is exactly why transparency, checks and balances, and prior independent review are essential.
The purchase agreements and “Due Diligence” reports are public documents. Although the Special Representative emphatically announced at Dili Convention Center (on national television) that these documents are public, they have not been made available, although La’o Hamutuk has asked TimorGAP and the Maritime Boundaries Office for them.
The current Petroleum Fund Law permits part of the fund to be invested in Sunrise. Article 15.1 of Petroleum Fund Law No. 9/2005 as amended in 2011 specifies that all of the Fund’s investments must be outside of Timor-Leste. Other clauses in Article 15 say that up to 5% of the investments can be ‘non-traditional’ (i.e. other than bonds and stocks), and that no more than 3% can be in any one company. Although the (vetoed) alteration of the Petroleum Activities Law opens the possibility for the Fund to be invested in TimorGAP, it does not revise the Petroleum Fund Law.

Parliament could allocate money through the State Budget process to invest in the Sunrise field (the proposed 2019 budget includes $650 million to pay ConocoPhillips and Shell, and the Petroleum Fund will finance 88% of the State Budget). This would be a legal way for the Petroleum Fund to pay for part of the Sunrise Project without damaging the security, transparency and accountability of the Petroleum Fund.
Timor-Leste will have to pay fines to the companies if payments are not made by March 2019. The agreement with ConocoPhillips says that if $350 million is not paid by the end of March, Timor-Leste will pay interest (not a fine) on the unpaid balance. Some say that the charge would be less than the investment return Timor-Leste receives from the Petroleum Fund, so Timor-Leste could benefit financially by paying later. We do not know if there is an absolute deadline for making the payment.

The payment to Shell is not due until March 2020.
Money invested by companies and Timor-Leste in the Sunrise project will be repaid, with 127% more added, just as was done for the companies who invested in Bayu-Undan. (In other words, a $100 investment will be repaid with $227.) This is partly true. However, Bayu-Undan’s tax regime was designed to favor the companies’ interests over those of governments, and Sunrise doesn’t have to use the same system. Even if Sunrise uses these earlier rules, this would apply only to the investment at the field (upstream), but not to the purchase of participation, or to the pipeline and LNG plant.

As gas is sold, money is used to repay investors, and Timor-Leste will get 56.56% of this, with the rest shared among the other investors. These repayments will reduce the royalties and taxes Timor-Leste will receive from Sunrise oil and gas production, so larger capital costs may not benefit the State.
Timor-Leste has received more than $5 billion because it diversified Petroleum Fund investments into the stock market starting in 2012. Between January 2013 and the end of November 2018, the Petroleum Fund received $1.9 billion in interest and dividends, which would have been received even if all the investments had remained in bonds. Its stock investments grew in value by $2.3 billion during that period, during which the global stock prices did very well.

During the same period, the Fund received $6.9 billion in oil and gas revenues and lost $0.7 billion due to changes in currency exchange rates.
The Sunrise project will succeed because Timor-Leste’s leaders are determined to make it work. Even if Timor-Leste obtains low-cost, low-risk financing, and the design, construction and management of the Greater Sunrise project are done perfectly, some factors are not within Timor-Leste’s control. Sunrise will be producing LNG for a quarter of a century, and the price of natural gas could drop drastically as non-conventional sources (i.e. fracking) continue to grow, or as renewable energy replaces fossil fuels. The consequences of climate change could cause nations to tax (or even outlaw) burning oil and gas, undercutting the economics of Sunrise. None of this is certain, but it is a serious risk.
If the project is approved expeditiously, Greater Sunrise will provide enough revenue to Timor-Leste in time to prevent the Petroleum Fund from being drawn down to zero in about ten years. La’o Hamutuk estimates that Timor-Leste’s Petroleum Fund could be empty by 2027 even if the State does not spend or invest in the Sunrise project. If the Fund is invested (directly or through the State Budget) in Sunrise and Tasi Mane, it could be empty several years sooner.

If everything goes as planned, proponents of the Sunrise project expect production to start toward the end of 2026. However, the experience of Bayu-Undan and other projects is that significant revenue does not come in until about two years after production begins, because production ramps up slowly and capital investors must be repaid first. Even if Sunrise goes perfectly, Timor-Leste will probably face several years of austerity – not having enough money to pay for basic services – unless the economy is rapidly diversified into non-oil sectors.
If Greater Sunrise does not produce the expected revenue and profit, project financers (especially China) could impose severe sanctions on Timor-Leste. This is worrisome, but might be correct. Having loan agreements reviewed by the Audit Chamber will reduce or avoid this danger.

In some countries, including Sri Lanka, Myanmar and Angola, loan agreements have forced gas and oil producers to sell to the lender at below-market prices, or have allowed foreign lenders to take ownership of key infrastructure. However, if the project is profitable, there is no need to sign financing agreements which impose harsh conditions on Timor-Leste – and, if it is not, it shouldn’t be done in the first place.
All the proposed components of the Tasi Mane Project are necessary to bring the Sunrise pipeline to Timor-Leste. The Greater Sunrise pipeline and LNG project require the infrastructure at the offshore Sunrise field, the undersea gas pipeline, and the LNG plant and tanker jetty at Beaçu. It does not need the South Coast highway, Betano refinery or the Suai Supply Base. No economic or technical reason prevents Beaçu LNG from going ahead even if the other components are cancelled. Each component of the Tasi Mane Project should be decided separately, with its own independent, objective, cost/benefit/risk analysis.