Also: Minchin discusses new treaty over East Timor Sea

Friday April 6, 4:14 PM

Second round Timor Gap talks end without deal

MELBOURNE, April 6 (Reuters) - Second round talks between Australia and East Timor representatives ended on Friday with arrangements for a new treaty to split petroleum revenues from the Timor Sea still unresolved. The three-day talks in Melbourne concluded on Friday, with both sides expected to meet again, possibly next month, to discuss the split of petroleum revenues from the Timor Gap region between Australia and East Timor.

"They are continuing the negotiating process and the details of the negotiations remain confidential," a spokesman for Australian Foreign Affairs Minister Alexander Downer said.

Oil revenues from an area known as the Timor Gap were formerly split equally between Australia and Indonesia under a revenue sharing agreement.

Since East Timor voted for independence from Indonesia in 1999, the United Nations Transitional Administration in East Timor has taken over Indonesia's position within the agreement while a new treaty is negotiated.

East Timor is seeking a larger share of the revenues, based on arguments that a midway sea boundary with Australia would put most of the disputed Timor Gap within its waters.

Media reports have suggested East Timor is seeking 90 percent of the revenues while Australia is prepared to offer 60 percent.

"Without going into detail, our position is more generous than has been reflected in some of the press reports," Downer's spokesman said.

A new treaty must also resolve fiscal arrangements for gas production from the Timor Gap, an issue left unclear in the original treaty as the region was seen as an oil province.

Both sides have said they are hopeful a new treaty will be finalised before East Timor gains its formal independence later this year.

Production from the Timor Gap will rise sharply from 2004 when the US$1.495 billion Bayu-Undan liquids project is due to begin output of more than 100,000 barrels per day.

The Bayu-Undan and Greater Sunrise gas reserves are also planned to underpin a domestic gas project, while exports of liquefied natural gas are targeted from about 2005.

Bayu-Undan operator Phillips Petroleum Co. has called for fiscal arrangements covering gas movement by pipeline to be finalised as soon as possible.

Minister says political situation in East Timor is stable ABC News Online Apr 9 2001 4:02 PM AEST

Minchin discusses new treaty over East Timor Sea

The Federal Government is willing to make concessions in order to open the Timor Sea to mining interests.

The Minister for Industry and Resources, Senator Nick Minchin, says the Government is willing to concede a significant slice of potential revenue to East Timor.

Under the 1989 Timor Gap Treaty Australia and Indonesia agreed to split the profits from one of the petrol rich zones evenly.

But since East Timor voted for independence, a new treaty has to be negotiated and Senator Minchin says the division of profits is still being discussed with East Timor's transitionary government.

"That's a matter for negotiation we've indicated that we are prepared to move well away from the current 50-50 split in favour of East Timor," he said. Senator Minchin says a new treaty needs to be agreed with East Timor before mining can begin.

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