Between Formal Sovereignty, Fiscal Risk and the Future of National Development
Liga ba artigu ida ne'e iha lian Tetum
La'o Hamutuk recognizes that the agreements signed by TimorGAP, E.P. to purchase the shares in Greater Sunrise from Osaka Gas Australia and Woodside Energy changes its ownership structure. However, we see a need for a critical and transparent assessment, especially of costs, financial responsibility, operational capacity and real benefits to the people of Timor-Leste and to future generations.
Acquisition changes shareholding structure
Greater Sunrise was discovered in 1974, but still has not started production, due to Indonesia’s illegal occupation, maritime border disputes, disagreement over where to process the gas, and difficulties in agreeing on a viable development model, as well as because no potential investors have come forth.
Timor-Leste has previous experience with acquiring a stake in Greater Sunrise. In 2019, the Government bought 30% participation from ConocoPhillips and 26.56% from Shell Australia, totaling a 56.56% share now owned by TimorGAP. After buying this stake with $650 million borrowed from the Petroleum Fund, TimorGAP has not yet begun to repay this loan.
On 2 September 2026, TimorGAP announced an agreement to purchase an additional 10% stake from Osaka Gas Australia. Then, on 27 October 2026, TimorGAP signed a purchase and sale agreement with Woodside Energy to purchase its 33.44% stake in Greater Sunrise. The agreement with Woodside sets a maximum price of $200 million, which will be paid in stages, mostly after Greater Sunrise begins production. The amount to be paid to Osaka Gas is still secret.
After the agreements with Osaka Gas and Woodside receive necessary approvals, TimorGAP will own 100% of Greater Sunrise. These agreements do not only change the percentage of participation, but also raise important questions about the commercial reasons that led ConocoPhillips, Shell, Osaka Gas and Woodside to sell their interests, and about the capacity of TimorGAP and Timor-Leste to assume responsibilities previously shared with international partners.
La'o Hamutuk believes that the companies' decisions to sell their stakes indicates that they expect that Greater Sunrise is commercially unviable or not as profitable as they would like; perhaps they do not want to wait longer for a project that has already been in process for 52 years. However, their decisions to abandon Greater Sunrise should be clearly and objectively analyzed, and our Government should explain how it will ensure technical, operational and financial capacity to develop the project, including how much capital or total investment will come from the Petroleum Fund, potential risks and how to manage them, and whether there are foreign investors ready to advance several billion dollars. If not, where will the money come from? TimorGAP and other project proponents must not deal with this issue only through transient patriotism and secret contracts by public institutions.
100% participation does not guarantee public benefit
La'o Hamutuk understands that TimorGAP's increased participation in Greater Sunrise may strengthen its influence in negotiations and commercial decisions, but that does not guarantee project viability, operational capacity or economic benefits to the State and people of Timor-Leste. The enlarged share also increases capital requirements and financial liability. La'o Hamutuk estimates the capital cost for Greater Sunrise upstream at more than $16 billion, not including the cost of paying for Osaka Gas and Woodside's stakes. When these two participants, who would have shared investment and risk, sell their interests, TimorGAP's responsibility increases by $7 billion.
It is important to distinguish between commercial participation and sovereign authority to make decisions. Part of Greater Sunrise is still in Australian territory and the field is under the Special Regime established by the 2018 Maritime Boundary Treaty between Timor-Leste and Australia. Major decisions, including development plans, are subject to governance mechanisms and consensus under the Treaty. Therefore, even when TimorGAP owns the entire project, this does not mean that Timor-Leste alone can make all decisions regarding the development of the project.
For La'o Hamutuk, economic sovereignty is not measured only by the percentage of participation in the project, but must be measured by technical and financial capacity, bargaining power, transparency, risk management and the ability to transform petroleum resources into sustainable public benefit. Therefore, the fundamental question is not only whether Timor-Leste will control 100% participation but increased commercial interest and capital needs; the effective obligations depend on the contract and financing mechanisms.
Financial Risk and the Assets of Future Generations
The acquisition experience in 2019 showed that a stake in Greater Sunrise has major financial consequences. TimorGAP borrowed $650 million from the Petroleum Fund with an annual interest rate of 4.5% and repayment over 18 years after a grace period of eight years, which ends in 2027 but will probably be extended.
The participating interest is valued at zero in TimorGAP's financial statements, due to uncertainty about the project's fiscal benefits and regulatory regime. Therefore, we need careful assessment of investment risk while the development concept, commercial conditions and fiscal structure remain undecided.
La'o Hamutuk is concerned that the new acquisition will increase the capital needs and financial responsibility of TimorGAP and Timor-Leste, while the financing structure is not clear to the public. Therefore, the Government must explain where the financing will come from -- borrowing, the State budget, the Petroleum Fund or other sources -- and who will be responsible when development costs increase or the project is delayed.
Regarding the possibility of participation of or investment from Chinese companies, this could bring opportunities for capital, technology and market access, but will also pose financial, contractual and geopolitical risks, especially with Australia. There have been discussions about the involvement of Chinese companies, but so far there is no agreement for their participation in the project.
The Petroleum Fund is a national asset derived from non-renewable natural resources; therefore, it must be managed responsibly to benefit current and future generations, and not treated as an unlimited source of financing for speculative projects whose returns are still unclear.
Extractive dependence and the need for alternatives
La'o Hamutuk's fundamental concern is not only the acquisition price or the amount to be borrowed, but that Timor-Leste continues to place high hopes on extraction and the oil and gas industry, while productive sectors do not receive enough investment or priority.
This situation carries a risk known in the development literature as the resource curse: when a country depends on revenue from non-renewable resource extraction, it concentrates political decisions and public investment in the extractive sector, while productivity, sustainability, local industries employment and economic diversification are ignored.
We need to consider Timor-Leste's experience, which shows that decades of depending on the Petroleum Fund and investing in capital-intensive projects crowds out opportunities to build a strong, sustainable and diversified productive economy.
Political prioritization should not replace cost-benefit and risk analyses. Every extractive project needs to be technically, commercially and financially viable, with expected public benefits that justify the costs, obligations and risks that the State and the people take on. Petroleum projects are a principal cause of climate change and bring many other social and environmental impacts. The climate crisis requires structural changes in the global economy, including discussions on phasing out fossil fuels. If Greater Sunrise eventually produces LNG, it could operate until 2055, by which time fossil fuels may be outlawed.
Timor-Leste needs to shift from extractive dependency to a productive, renewable, diversified and sustainable economy. This requires prioritizing agriculture and food sovereignty, fisheries, local product processing, small and medium-sized industries, renewable energy, sustainable tourism, education, health, human resource development and productive infrastructure.
Investment in these sectors can increase national production, reduce dependence on imports, create community jobs and improve household incomes. In this way, Timor-Leste can build an economy that will sustain the country even after its oil and gas resources are exhausted. Economic diversification not only supports neglected sectors, but can also build productive capacity, increase the value of national products, create markets and ensure that economic benefits are shared by all our people.
Call for transparency and public accountability
La'o Hamutuk calls on the Government and TimorGAP to publish complete information on the recent acquisitions from Osaka Gas and Woodside and on the Greater Sunrise project, including costs, commercial rationale, investment strategy, payment terms, models and underlying assumptions, sources of financing, capital obligations, potential liabilities, and social and environmental impacts. The public, especially affected communities should be informed about TimorGAP's capacity, operational and technical partners, estimated development costs and projected net state revenue and consulted meaningfully.
We urge the Government to get an independent, objective economic and financial assessment before making a final investment decision, including analyses of the risks of delay, cost increases, price and market changes, and comparison with investment opportunities in productive sectors. The National Parliament and other oversight institutions should exercise independent control.
La'o Hamutuk does not oppose development, national sovereignty or the use of non-renewable resources. However, we are against development models that continue to increase extractive dependence and impose financial risks on our people and future generations, while ignoring productive, renewable and sustainable alternatives.
Conclusion
The agreements to increase TimorGAP's stake in Greater Sunrise do not guarantee that Timor-Leste will receive greater public benefits and could exacerbate the crisis when the Petroleum Fund is exhausted. Increased participation must be accompanied by operational capacity, financing, transparency and institutional accountability.
For La'o Hamutuk, economic sovereignty is not merely about controlling the percentage of participation in an oil and gas field. Real sovereignty is the capacity to make informed decisions, protect public assets, ensure intergenerational justice and transform limited natural resources into a productive, renewable, diversified and sustainable economy. The Government must ensure that the development of Greater Sunrise does not increase dependence on the Petroleum Fund, but instead contributes to a productive economy, sustainable employment and the protection of public assets for today's and tomorrow's generations.
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