Petroleum Fund6 Feb 2024 13:14
Timor-Leste Oil Fund grows more than one billion in the fourth quarter of 2023.
6 February 2024
Report of the Central Bank of Timor-Leste shows that the values increased from 17.5 billion US dollars to 18.2 billion US dollars.
The Oil Fund (FP) increased by about one billion in the last three months of 2023. Released on Tuesday (6.02)
by the Central Bank of Timor-Leste (BCTL), the authority responsible for the management of the FP, the report highlights that, from the third to the fourth quarter of last year, the value grew from 17.5 billion to 18.2 billion.
Part of the values of the FP are invested in international financial instruments, such as securities (in countries such as the United States of America and Japan) and
equity, which involve shares. Agostino Maia, BCTL investment technician, explained that the increase in FP in the period has to do with the rise in the interest rate that central banks in the world have applied in recent times to mitigate global inflation.
"The positive return of the FP reflects the expectation and investment policy in the market, since central banks try, in the future, to reduce inflation, in order to follow its path without harming FP's investment in the international market," he argued.
Regarding the direct revenues from the exploration of oil and gas, the coordinator of the FP of the Ministry of Finance, Filipe Nery Bernardo reported that, last year, the values came only from the Bayu Undan field. Located on the maritime border of East Timor and Australia, the area is in the process of being dismantled, as its reserves have been exhausted.
With this in mind, the coordinator warned of the need to use the amount of FP with more caution. "If we can no longer improve the inflow of FP revenues, we can only do two essential things: the first is to reduce the withdrawal of the Fund, in order to follow what is provided for in the Estimated Sustainable Income (CSR) - or we can even raise less than is foreseen in the CSR. The second is to realise the value of the Government's survey so that we can review our investment strategy, in order to obtain more revenues and guarantee the Fund in the long term," said Filipe Bernardo.
The authorities, however, hope that the exploitation of oil and gas in East Timor will bring good returns and place confidence, above all, in the Greater Sunrise field, the only one with commercially proven reserves so far. Representatives of the governments of East Timor and Australia, as well as companies interested in the business are still defining an extraction plan.
The field is submerged, 150 kilometres from East Timor and 450 kilometres from Australia. According to the Maritime Border Treaty, signed between countries in 2018, if the gas is processed on the south coast of East Timor, Australia gets 30% of the revenues and East Timor with 70%; if the gas is taken for processing in Darwin LNG, Australia, 20% of the revenues stay with the country and 80% with Timor-Leste.
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