Timor-Leste Petroleum Fund

Country: East Timor

Established: 2005

US$ Billion: 6.3

Transparency Rating: 6

Origin: Oil, gas

Firm Investment Style: Index

Entity Structure: Fund


Summary:
Timor-Leste’s government announced the inception of the Timor-Leste Petroleum Fund in August of 2005. The Minister of Planning and Finance of the Government of Timor-Leste, is responsible for managing the fund. The Minister of Planning and Finance, however, signed an agreement with the Banking and Payment Authority to also take responsibility of the fund.

By late 2006, the Timor-Leste Petroleum Fund had reached U.S. $1,011,763,807. Due to the Bayu-Undan project, which yielded an estimated 25-year field life of wet gas, profitability increased. By the end of 2007, the fund’s balance was slightly over U.S. $2 billion.

 Strategy & Objectives:
The Petroleum Fund Law requires that not less than 90 percent of the portfolio be invested in debt instruments and deposits denominated in U.S. dollars. The fund is currently mandated to invest only in US and other sovereign debt instrument

Governance:
The Government of Timor-Leste, represented by the Minister of Planning and Finance, is responsible for the overall management and investment strategy of the Petroleum Fund. The Petroleum Fund law gives the responsibility to the Banking and Payments Authority (BPA) to undertake the operational management of the Fund under an agreement with the Minister. A Management Agreement between the BPA and the Ministry of Planning and Finance was signed in 2005.