Asia Times November 23, 2001

Indonesia seeks to cash in on Timor Gap

KUPANG, Indonesia - Indonesian Foreign Minister Hasan Wirajuda has backed renewed negotiations on the issues of the Timor Gap and Timor Sea border between Australia and East Timor, according to a local official.

The minister' support has been conveyed in a letter to Governor of East Nusa Tenggara (NTT) Piet A Tallo, spokesman for the NTT provincial administration Nani Kosapilawan said on Thursday. The support is based on the consideration that the sea border between Australia and East Timor might create fresh problems in the future, Nani said. The minister in his letter also asked the governor to study and collect data on the issues and discuss them with the Foreign Affairs Ministry.

Australia and Indonesia signed the Timor Gap Treaty on December 11, 1989, which enabled petroleum exploration and development in an area between the then Indonesian province of East Timor and northern Australia. East Timor and Australia on July 5 initialled the Timor Gap agreement governing the joint administration by both countries of oil and gas developments in the Timor Sea, most noticeably that East Timor will receive 90 percent of the production of oil and gas in the Joint Petroleum Development Area (JPDA) over a 20-year period. This differs considerably from the 1989 treaty, which provided for a 50:50 split.

Australian Prime Minister John Howard said of that agreement: "It's very fair to the new state of East Timor, but it's also an arrangement that's good for Australia ... It will be a way of giving some revenue security to the new country which is going to be a very poor country and need a lot of assistance, but not to an unreasonable degree."

Chairman of the Golkar party Faction in the Nusa Tenggara Timur (NTT) provincial Legislative Council (DPRD) Mell Adoe said that the people of Timor Island, in the western part of NTT, also wish to obtain oil and gas from the Timor Gap. Such deposits are now being sought by the "Peduli Timor Barat" Foundation and the NTT DPRD's Working Group on the Timor Gap, as most of the oil fields are located near Timor Island in the western part of NTT.

Based on these considerations, the foundation and DPRD has recommended that Jakarta consider the aspirations of the people in NTT's western part of Timor with regard to the oil and gas in the Timor Gap, Adoe said. Minister Hasan Wirayudha should therefore promote Indonesia's diplomatic measures on the Timor Gap in an effort to reach a new agreement, despite East Timor's secession from Indonesia through the UN-sanctioned popular vote on August 30, 1999.

"As a member of the East Nusa Tenggara society, I will feel relieved if the Timor Gap issue gets proper response from the Foreign Affairs Ministry as the Timor Gap does not belong to East Timor alone," he said. "We hope Jakarta can play a maximum role in the renegotiations on the Timor Gap agreement with Australia."

Meanwhile, the cancelation of a gas pipeline from the Timor Sea to Darwin has hurt Australia's Northern Territory. The Territory's government will deliver a mini-budget next week saddled with an unsustainable A$95 million (US$48.91 million) blowout in the deficit. The Territory's economy experienced no growth last financial year and remains flat.

The light at the end of the tunnel was, for awhile, Phillips Petroleum's proposal to build the A$1.5 billion gas pipeline to feed A$13 billion in on-shore developments including two methanol plants. But Phillips shelved its pipeline in August over a tax dispute with East Timor and left Darwin's promise of an industrial sector in limbo.

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