Received from Joyo Indonesian News

Dow Jones Newswires April 2, 2002

East Timor To Ratify Timor Sea Treaty With Australia

MELBOURNE -- East Timor Foreign Minister Jose Ramos Horta said Tuesday there will be no hitches to ratifying a treaty with Australia sharing potentially lucrative oil and gas production from the Timor Sea.

But he canvassed the possibility of later opening negotiations with Australia and Indonesia on expanding the new country's maritime boundaries, potentially giving it a greater slice of revenue from oil and gas projects in the Timor Sea.

"We can open negotiations with Australia and Indonesia to redefine our maritime boundaries," he said on Australian Broadcasting Corp. radio.

Speaking in Sydney, Ramos Horta said the treaty with Australia, agreed to in July last year, will nevertheless be ratified on or shortly after the former Indonesian province officially gains full independence May 20, Australian Associated Press reports.

Ramos Horta's assurance follows speculation that ratification of the treaty could be derailed by touted legal action to extend East Timor's seabed boundaries in the Timor Sea.

Such action is being promoted by U.S.-based exploration company Petro Timor, which is separately taking legal action in Australia's Federal Court against the Australian government and U.S.-based Phillips Petroleum (P) over rights to explore for oil and gas in the Timor Sea.

"I hope...on May 20, or 21, or within days, that East Timor and Australia would sign the interim arrangements we have reached," Ramos Horta told reporters.

"It would be very bad for East Timor's international standing if on day one of independence the very first thing we did as a major foreign policy act was to breach, fail to ratify, an international agreement that we had negotiated for two years between the United Nations and the Australian government," he said.

Ramos Horta said the new terms are far more favorable to East Timor than the previous agreement between Australia and Indonesia.

"But that doesn't tell the whole story. Australia is still the main beneficiary, but we reach agreement in good faith with Australia and we must honor it," he said.

According to Petro Timor, in December 1974 East Timor's then ruler Portugal awarded the U.S. company concessions to explore for oil in the Timor Sea. Petro Timor contends that following Indonesia's 1975 invasion of East Timor those concessions were supplanted by fresh concessions awarded to rival Phillips and other major resources companies as part of an Australia-Indonesia agreement.

Sources say East Timor's chief minister, Mari Alkatiri, is in London seeking additional legal advice on the issue of East Timor's seabed boundaries.

In 1989, Indonesia and Australia signed the Timor Gap treaty, which included a zone of cooperation where the two countries would share oil and gas reserves.

Following a vote in 1999 by the East Timorese to separate from Indonesia, Australia and East Timor began negotiating a new treaty that maintains the basic terms of the previous treaty with Indonesia.

East Timor has been under U.N. administration since 1999.

-By Andrew Trounson; Dow Jones Newswires; 61-3-9614-2664; andrew.trounson@dowjones.com

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