In a letter to the Court of Appeal sent 30 January, 23 parliamentary members argued that the decree could allow the petroleum fund to be misused.

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

Timor-Leste’s constitution specifies that the nation’s Petroleum Fund Law must include a mandatory financial reserve.

Following the judgement on Wednesday, Manual Tilman, a lawyer, said the court had approved “immediate” transfer of funds, but warned some changes were found unconstitutional.

"LAP (Article 22) is welcomed and the government may take money to immediately buy the shares, but the government must also see article 2 regarding the Maritime Boundaries Treaty," Tilman said.

In order to push forward with the government’s bold onshore gas-processing industry plan, Tilman said the government must ratify the Maritime Boundary with Australia and revise the nation’s tax and environment regulations.

The ruling comes after Sara Lobo, the Acting Minister of Finance, said the government would execute the purchase of Greater Sunrise holdings by transferring money from the Petroleum Fund to its State-owned company TimorGap.

Under the plan, Lobo said 5% of the Petroleum Fund (about $800 million) would be invested in TimorGAP, while the percentage of the fund invested in stocks would be reduced from 40% to 35%.

Lobo said TimorGAP would be obligated to use the investment to exploit known oil and gas fields that are commercially competitive and that would contribute to development and diversification of Timor-Leste’s economy.

TimorGAP will pay 4.5% interest on the investment and comply with reporting requirements.

The buy-out of Shell and ConocoPhillips holdings gives Timor-Leste a majority stake in the Greater Sunrise project, along with remaining partners Japan’s Osaka Gas and Australia’s Woodside Petroleum.

The move by Timor-Leste government to become a majority stakeholder in Greater Sunrise follows the agreement between Timor-Leste and Australia on a new maritime boundary signed in March 2018, 18 months after a UN court forced Australia to renegotiate its existing boundary treaty with Timor-Leste

Under the new treaty, Timor-Leste will give up 10 per cent of its royalties if the gas is piped to and processed in Timor-Leste rather than Darwin, Australia. Timor-Leste would receive 70 per cent of an estimated $US11 billion royalties, based on revenues of $US65 billion, over the project's life, the Australian Financial Review reported September 2018.

The Australian government has said it is undecided about where the gas from Greater Sunrise should be processed.