|Subject: CNN: Energy giants boost revenue
for East Timor
Energy giants boost revenue for East Timor November 30, 2000 Web posted at: 1:02 p.m. HKT (0502 GMT)
By Grant Holloway CNN Interactive Writer
PERTH, Australia (CNN) -- An agreement to jointly develop energy resources in the Timor Sea will provide a welcome revenue boost to the fledgling nation of East Timor.
Energy giants Phillips Petroleum and Woodside have agreed in principle to spend around $6 billion (Australian $11.5 billion) to bring to production gas resources in the Timor Sea, which separates Australia from Indonesia and Papua New Guinea.
As part of the deal, the partners will also build a multimillion dollar liquefied natural gas plant in Darwin, capital of Australia's Northern Territory, to process the gas.
Phillips' Bayu-Undan project lies within the Timor Sea's Zone of Cooperation Area, while about 20 percent of Woodside's Sunrise project is in the zone. Profits from resources within the zone will be shared between the development partners, the Australian government and East Timor.
It is expected that East Timor would enjoy profits of more than $50 million a year from 2004, making it that country's biggest single source of national revenue.
The deal has been welcomed by the United Nations Transitional Administration in East Timor (UNTAET), which has been supporting such a development as a means to minimize development costs and maximize returns to East Timor. The plan also has the support of Australia's federal government and the Northern Territory government.
East Timor is currently governed by UNTAET following outbreaks of violence earlier this year. The former Indonesian province voted for independence last year in a referendum. The United Nations sent a peacekeeping force, led by Australian troops, to the island to restore calm.
Following last year's vote, hundreds of people were killed and thousands of buildings were damaged. Hundreds of thousands of people fled East Timor. On September 6, three U.N. aid workers were found killed in East Timor. The deaths of the U.N. workers were linked to militias that were established by Indonesia in a failed bid to sway last year's referendum vote.
Targets more achievable
In a joint statement issued today, Phillips' chief executive officer Jim Mulva and Woodside managing director John Akehurst said cooperation was the best way to enhance the development of the gas fields.
"The intention to pursue a shared vision of regional gas development is good for all stakeholders," the statement said.
A spokesman for Woodside told CNN that the agreement made the 2004 target of delivering gas to shore from the Timor Gap more achievable.
He said the development was potentially East Timor's largest source of revenue, and one which could be sustained for 20 years or more.
The exact amount of revenue the Timorese will gain depends however on the outcome of current negotiations between all parties over profit-sharing arrangements for the Timor Gap. Those talks are not expected to be concluded until early next year.
The Sunrise project has a resource base of 9.61 trillion cubic feet of gas while the Bayu-Undan field holds 4 trillion cubic feet. The plan is to bring gas from Bayu-Undan to Darwin for processing by 2004 and have Sunrise contributing by 2006.
The gas would be used to supply industrial needs in northern Australia as well as for the more populous eastern and southern states of Australia which currently rely on dwindling reserves.
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