Subject: LUSA: Despite Pressure, Dili To Stick with Timor Gap Tax Demands - Alkatiri

14 Aug 01 11:37 East Timor: Despite Pressure, Dili To Stick with Timor Gap Tax Demands - Alkatiri

East Timor will not back off its tax demands for oil and natural gas operations, despite pressure from oil companies, says Mari Alkatiri, one of Dili's chief negotiators.

In an interview with Lusa Monday, Alkatiri also said that a new proposal for the construction of an offshore natural gas processing plant would replace earlier plans for the building of a plant in Darwin, Australia.

The oil operators "think that we are in a weak position, that we will given in", Alkatiri said, "but this is not going to happen" in a new round of negotiations set for next week.

"We want a negotiated settlement because we are partners in the same business, but we will not given in to what was an aberration we inherited from the (previous) accord between Australia and Indonesia", he added.

An accord signed between Dili and Canberra on July 5 replaced the 1989 treaty between Australia and Indonesia, giving Dili rights over 90 percent of Timor Gap resources.

Details of Dili's tax demands have not been made public.

Alkatiri also said that Shell Development Australia had proposed the construction of an offshore natural gas processing plant, costing about 40 percent less than earlier plans by Phillips Petroleum for a USD 3 billion plant in Darwin.

"It's a new factor that falls like a fly into honey", said Alkatiri, adding that Dili would "advance with this process", forgetting "pipelines to Australia".

An offshore processing plant would mean a 90-10 percent tax split benefitting [sic] East Timor over Australia, he stressed.

SAS -Lusa-

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