East Timor’s president has approved a decree allowing use of the country’s petroleum fund for a $650 million buyout of Royal Dutch Shell and ConocoPhillips’ holdings in the Greater Sunrise gas project, a proposal he had vetoed in December but which subsequently won overwhelming parliamentary backing.

Under East Timor law, the president can veto a bill once but must then ratify it if the bill wins a parliamentary vote of approval.

Purchases of the Shell and ConocoPhillips holdings would give East Timor a majority stake in the project, along with remaining partners including Australia's Woodside Petroleum and Japan's Osaka Gas.

In December, President Fransisco Guterres vetoed the decree saying it could allow the petroleum funds to be misused and called for the proposal to be revised.

The decree removes a 20% cap on state participation in oil projects and allows Sunrise and other projects to bypass approvals by parliament in future.

But Guterres “promulgated” the decree on Jan. 17 as required by law, according to a statement from his office.

“There was no change in its wording, as previously submitted for promulgation,” said the statement from Guterres’ chief of staff, Fransisco Maria de Vasconcelos.

The president’s approval of the decree “does not mean a political or legal judgment favorable to said decree,” Vasconcelos said.

Discovered in 1974, the Greater Sunrise fields, which hold around 5.1 trillion cubic feet of gas, straddle the maritime border between Australia and East Timor, and a dispute over the border has delayed the project's development.

Offshore