SovereignWealthFunds.comTimor-Leste Petroleum Fund
Timor-Leste Petroleum Fund: what it invests in
Geography Global
Timor-Leste Petroleum Fund: how big it is, and on what basis
In US dollars: about USD 18.61B. Reported in US dollars.
Return 2025 9.92%
Timor-Leste Petroleum Fund: what it publishes
Published 10 · Partly 0 · Not published 0
Our 10 item score. It measures what is public, not how well a fund is run.
At a glance. The Petroleum Fund holds all of Timor-Leste's oil and gas revenue and invests it in offshore bonds and listed equities. The central bank runs it for the Ministry of Finance. It was worth USD 18.61 billion at end 2025 and USD 18.43 billion at 30 June 2026. With Bayu-Undan output ended in June 2025, budget transfers are now paid from the balance and returns. S1 S4
Key points
- Returned 9.92 percent in 2025 and 4.67 percent a year since 2005. S1
- Targets a 3 percent real return; at least half must sit in cash and investment grade bonds. S1
- Transferred USD 1,451.9 million to the State Budget in 2025, against an estimated sustainable income of USD 551.9 million. S1
- Split since July 2021 into a Liquidity Portfolio covering three years of withdrawals and a Growth Portfolio. S1
- Six external managers plus internal central bank mandates; mostly passive. S1
- Holds one private debt asset: loans to Timor Gap E.P. valued at USD 535.2 million. S1
- Publishes monthly, quarterly and audited annual reports; IFSWF member since 2009. S5 S2
Interesting facts
- Petroleum receipts fell to USD 36.1 million in 2025 after Bayu-Undan stopped producing. S1
- Its counter-cyclical rule moves 150 percent of the liquidity shortfall to the Liquidity Portfolio after a year with returns above 6 percent. S1
- It held shares in 1,435 companies at end 2025, all through index-based mandates. S1
Mandate and goals
The Fund serves Article 139 of the Constitution: fair use of natural resources and a mandatory financial reserve. The law frames it as a tool for wise petroleum management for current and future generations and for sound fiscal policy. S1
- Earn a 3 percent real return over the long run. S1
- Fund State Budget transfers approved by Parliament. S1
- Invest only in offshore financial assets. S1
- Hold at least 50 percent in fixed interest and at most 50 percent in listed equities, 5 percent in other assets and 3 percent per non-sovereign issuer. S1
How it invests
| Industries | . Sector agnostic S1 |
|---|---|
| Asset classes | Public equities, Fixed income, Private credit S1 |
| Stages | Public markets, Credit S1 |
| Geography | Global. About 84 percent United States by market investments; about 91 percent US dollar after hedging S1 |
| Direct / through funds / co-invest | No / No / No S1 |
| Ticket size | No ticket size; assets are held through index mandates. S1 |
| External managers | Six external managers chosen by central bank tender: BIS, Schroders, State Street, BlackRock, Barings and Franklin Templeton S1 |
| Co-investment programme | No co-investment programme. S1 |
Asset mix: US Treasuries 0 to 3 years (Liquidity) 15.6%, US Treasuries 3 to 5 years 28.22%, US Treasuries 5 to 10 years 8.08%, Developed ex-US Treasuries, hedged 7.95%, US TIPS 1 to 10 years 8.04%, Equities, MSCI World ex-Australia 23.3%, Equities, MSCI World Australia 0.76%, Equity factors 8.06% (as of 2025-12-31) S1
Past investments
| Year | Investment | Type | Sector | Stage | Amount |
|---|---|---|---|---|---|
| 2019 | Loans to Timor Gap E.P.. Financed the purchase of a 56.56 percent Greater Sunrise interest; 4.5 percent interest; fair value USD 535.2M at end 2025. S1 | Direct investment | Energy: oil and gas | Credit | USD 650M |
| 2023 | US TIPS mandates. Inflation-linked bond mandates awarded to Barings and Franklin Templeton. S1 | Fund commitment | Multi-sector | Public markets | 10 percent of Growth Portfolio |
| 2025 | Equity factor mandate. Mandate wording amended with effect October 2025. S1 | Fund commitment | Multi-sector | Public markets | 8.06 percent of market investments |
| 2012 | BlackRock equity mandate. Appointed as the equity share rose from 20 to 40 percent. S1 | Fund commitment | Multi-sector | Public markets | Not published |
| 2011 | State Street mandate. External manager appointed 14 September 2011. S1 | Fund commitment | Multi-sector | Public markets | Not published |
| 2010 | Schroders mandate. External manager appointed 8 October 2010. S1 | Fund commitment | Multi-sector | Public markets | Not published |
| 2009 | BIS mandate. Bank for International Settlements appointed 3 June 2009. S1 | Fund commitment | Multi-sector | Public markets | Not published |
Case studies
Timor Gap loans: buying into Greater Sunrise S1
- What: Lent to four Timor Gap E.P. subsidiaries to buy the ConocoPhillips and Shell interests in the Greater Sunrise venture.
- When: April 2019
- Size: USD 650M
- Why: A Council of Ministers decision under the petroleum activities law to secure a national stake in the field; partners are Woodside (33.44 percent) and Osaka Gas (10 percent).
- Outcome: A 2025 proposal would delay the first interest payment to April 2033 and extend maturity to April 2042.
Liquidity and Growth split S1
- What: Divided the Fund into a Liquidity Portfolio of short US Treasuries and a Growth Portfolio of 65 percent bonds and 35 percent equities.
- When: July 2021
- Size: USD 2.82B Liquidity; USD 15.25B Growth (end 2025)
- Why: To fund three years of budget withdrawals without forced sales of growth assets.
- Outcome: In 2025, USD 1,602.8M moved from Growth to Liquidity under the counter-cyclical rule.
Raising the equity share S1
- What: Lifted equities from 20 to 40 percent after a 2011 law raised the ceiling to 50 percent.
- When: 2012 to 2014
- Size: Not published
- Why: The 3 percent real return target assumed a 40 percent equity share.
- Outcome: Equities returned 22.01 percent in 2025.
Investment process
Parliament sets the law. The Minister of Finance sets investment policy with the Petroleum Fund Policy and Management Office. The central bank implements it and appoints managers. An Investment Advisory Board gives published, non-binding advice; a Consultative Council advises Parliament. S1
| Committee | Role |
|---|---|
| Investment Advisory Board | Independent advice to the Minister on strategy and mandates S1 |
| Petroleum Fund Consultative Council | Advises Parliament on the Fund S1 |
- The Investment Advisory Board advises on strategy and benchmarks. S1
- The Minister of Finance decides policy and must be satisfied with each manager's capital, insurance, record and references. S1
- The central bank tenders and monitors mandates under the Operational Management Agreement. S1
- Parliament approves withdrawals against the estimated sustainable income. S1
How to approach: No route for outside proposals is published. Asset managers can watch for central bank tenders; contact details are on the central bank site. S3
Size and returns
- Headline size: USD 18.61B (Fund market value, as of 2025-12-31) S1
- In US dollars: about USD 18.61B. Reported in US dollars.
- Balance at 30 June 2026: USD 18.43B (Fund market value, as of 2026-06-30) S4
- Balance at 31 May 2026: USD 18.75B (Fund market value, as of 2026-05-31) S5
- Return, 2025: 9.92 percent S1
- Return, 2005 to 2025: 4.67 percent a year S1
- Size over time (USD billion): 2024 18.27, 2025 18.61, 2026-06 18.43 S1 S4
Leadership
| Name | Title | Since |
|---|---|---|
| Santina J.R.F. Viegas Cardoso | Minister of Finance S1 | Not published |
| Helder Lopes | Governor, Banco Central de Timor-Leste S1 | Not published |
| Tobias Ferreira | Executive Director, Petroleum Fund Management Department S1 S7 | Not published |
| Felicia Claudinanda da Cruz Carvalho | Vice-Minister of Finance S1 | 2023 |
| Regina de Jesus de Sousa | Director General of Treasury S1 | Not published |
| Olgario de Castro | Chairman, Investment Advisory Board S1 | 2008 |
| Torres Trovik | Member, Investment Advisory Board S1 | 2006 |
| Michael Drew | Member, Investment Advisory Board S1 | 2017 |
| Juvinal Dias | President, Petroleum Fund Consultative Council S1 | Not published |
Governance and transparency
- Legal basis: Petroleum Fund Law No. 9/2005, amended by Law No. 12/2011 and Law No. 2/2022 S1
- Oversight: National Parliament, Ministry of Finance, central bank, Investment Advisory Board and Consultative Council S1
- Auditor: Ernst & Young S1
- Santiago Principles: IFSWF member since 2009 with an annual self-assessment S2 S6
- Custodian: J P Morgan Chase Bank N.A. S1
- A Governance Policy agreed by the Ministry and central bank in 2025 sits alongside a reviewed statement of ten investment beliefs. S1
Transparency score: 10.0 of 10 (band 5 of 5). Our own 10-item rubric; see the methodology page.
History
| Date | Event |
|---|---|
| 2004 | Bayu-Undan production begins. S1 |
| 2005-08-03 | Petroleum Fund Law enacted. S1 |
| 2009 | Joins IFSWF; BIS appointed as manager. S1 |
| 2011-09-28 | Equity ceiling raised to 50 percent. S1 |
| 2019-04 | Loans to Timor Gap E.P. for Greater Sunrise. S1 |
| 2019-08-30 | Maritime Boundary Treaty with Australia in force. S1 |
| 2021-07 | Liquidity and Growth portfolios created. S1 |
| 2023-04 | TIPS mandates added. S1 |
| 2025-06 | Bayu-Undan stops production. S1 |
| 2026-08-07 | Q2 2026 report released. S7 |
For family offices
The Fund invests only through public market mandates and one state loan, so there is no route for family office co-investment. S1
Reports
- Petroleum Fund Annual Report 2025: http://www.laohamutuk.org/Oil/PetFund/Reports/PFAR25en.pdf S1
- Quarterly report, Q2 2026: https://laohamutuk.org/Oil/PetFund/Reports/PFQR26q2en.pdf S4
- Santiago Principles self-assessment 2025: https://www.ifswf.org/assessment/tlpf-2025 S6
Common questions
How big is the Petroleum Fund?
USD 18.61 billion at end 2025 and USD 18.43 billion at 30 June 2026. S1 S4
What did it return in 2025?
9.92 percent, and 4.67 percent a year since 2005. S1
Who manages it?
The central bank is operational manager, the Minister of Finance sets policy and six external managers run parts of the portfolio. S1
Where does new money come from?
Very little: Bayu-Undan stopped producing in June 2025 and receipts were USD 36.1 million that year, so withdrawals come from the balance and returns. S1
Is it an IFSWF member?
Yes, a full member since 2009. S2
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Sources
- S1Ministry of Finance, Petroleum Fund Annual Report 2025 with audited statements
- S2IFSWF, Timor-Leste member page
- S3Banco Central de Timor-Leste, About the Petroleum Fund
- S4BCTL, Petroleum Fund quarterly report Q2 2026
- S5BCTL, Petroleum Fund report page
- S6IFSWF, Santiago Principles self-assessment 2025
- S7BCTL, press release on the Q2 2026 quarterly report
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