Oil plan stalled as East Timor president vetoes state budget
By OKI RAIMUNDOS
January 23, 2019 04:52 AM
DILI, East Timor (AP) — East Timor's president has vetoed the government's budget, possibly jeopardizing plans to develop the Greater Sunrise oil and gas field, seen by leading East Timorese politicians as crucial to the impoverished country's future.
President Francisco Guterres Lu Olo said Wednesday the 2019 budget agreed to by the parliament in December would drag the country further into deficit and force it to draw down more reserves from an oil riches fund already forecast to be depleted in a decade.
In a lengthy statement, he criticized the $2.1 billion budget, East Timor's largest ever, for devoting too much to buying foreign oil assets and too little to health, education and other public services.
"These values are so low that they do not meet the minimum requirements of social services and economic growth," the statement said.
Guterres said parliament now must revise the budget, which allocates about 30 percent or $670 million to oil and gas development.
East Timor agreed in October to buy a 30 percent stake in the Greater Sunrise field off its southern coast from ConocoPhillips for $350 million. An earlier developed oil field, Bayu-Undan, is now nearly exhausted.
Development of Greater Sunrise became more feasible after East Timor and Australia settled a sea boundary dispute last year.
But oil and gas companies remain skeptical of the project because of East Timor's insistence that gas be piped to and processed on its territory rather than using existing Australian facilities.
East Timor, a former Portuguese colony, was occupied by Indonesia for a quarter century.
It gained independence after a U.N.-sponsored referendum in 1999 but reprisals by the Indonesian military devastated the East Timorese half of the island of Timor. Today, the country of 1.3 million people still faces extreme poverty.
By OKI RAIMUNDOS
Updated: January 23, 2019 04:52 AM
Created: January 23, 2019 04:35 AM
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