Subject: AFR: Downer agrees to East Timor gas talks

also: E Timor PM rules out deal

Australian Financial Review August 1, 2002

ASIA TIES

Downer agrees to East Timor gas talks

Tim Dodd in Bandar Seri Begawan

The Minister for Foreign Affairs, Alexander Downer, said yesterday Australia would examine an East Timorese plan for a new treaty to solve the looming dispute over billions of dollars of government royalties from the Greater Sunrise gas field in the Timor Sea.

Mr Downer was responding to East Timor's Foreign Minister, Jose Ramos Horta, who proposed a pact between the countries in which Australia would agree to protect East Timor's southern maritime zone in return for East Timor's giving up part of its claim to Greater Sunrise.

In Brunei, where he is attending a high-level meeting of Pacific Rim foreign ministers, Mr Downer said: "Whether we would come to an agreement with East Timor or not, it's something we'll have a look at and look forward to talking to them about it."

Mr Ramos Horta's treaty offer, which he outlined in an interview on Tuesday, opens the way to negotiations to resolve the question of national ownership of the huge Greater Sunrise field, which Woodside Petroleum, Phillips Petroleum and Shell plan to develop at a cost of about $4billion.

It is the first sign that East Timor is prepared to step back from its claims to Greater Sunrise and other oil and gas fields north of the midway line between Australia and East Timor.

Under the currently accepted formula, Australia is entitled to 82 per cent of the royalties from Greater Sunrise, but East Timor's Prime Minister, Mari Alkatiri, said on a visit to Australia last month he would push for permanent maritime boundaries that would put the entire field under East Timorese jurisdiction.

Mr Downer said he had not yet heard the treaty proposal from Mr Ramos Horta himself, although the two had a brief meeting in Brunei just after Mr Downer's arrival on Tuesday night.

But he said Mr Ramos Horta's reported comments "suggest what I've thought all along - that at the end of the day, East Timor is looking at a constructive and successful negotiation".

"Whether we would agree to exactly a trade-off like that or whether we wouldn't is another question," he said. "Certainly, it's something we're very happy to talk to them about and hear their views on.

"We have another round of talks in August, in the next two or three weeks, at the officials' level, so some of these sorts of ideas can be explored then."


Australian Financial Review August 1, 2002

E Timor PM rules out deal

Tim Dodd in Bandar Seri Begawan

East Timorese Prime Minister Mari Alkatiri yesterday split with his Foreign Minister, Jose Ramos-Horta, and ruled out any approach to Canberra to seek Australian maritime surveillance of the Timor Sea in exchange for giving up part of East Timor's claim to gas reserves.

In a statement from Dili, Mr Alkatiri's office said: "There is no proposal to link surveillance with petroleum revenues from the Timor Sea."

Mr Alkatiri has overruled Mr Ramos-Horta who, in an interview on Tuesday, outlined his plan for a treaty between Dili and Canberra in which Australia would take responsibility for policing East Timor's economic zone in the Timor Sea while East Timor would give up part of its claim to the Greater Sunrise gas field.

Mr Ramos-Horta could not be contacted yesterday, but in the statement Mr Alkatiri said he had "been in contact with the Foreign Minister, who has made it clear that he was misquoted".

"The Foreign Minister simply said that East Timor and Australia will need to co-operate on the important matter of maritime security, as an entirely separate matter from discussions on oil and gas," he said.

However, in Tuesday's interview with The Australian Financial Review and Australian Associated Press, Mr Ramos-Horta warned that East Timor's claim for full control of the Greater Sunrise gas field, announced by Mr Alkatiri last month, was unrealistic and called for a compromise deal.

"On our side, we have to be very pragmatic [and realise] that Australia will not concede such a hugely rich energy reserve," Mr Ramos-Horta said in Brunei, where he was a guest at the annual meeting of ASEAN foreign ministers.

Yesterday, before Mr Alkatiri's statement, the Minister for Foreign Affairs, Alexander Downer, had said Australia would examine Mr Ramos-Horta's proposal and he looked forward to talking with the East Timorese Government.

In outlining the idea on Tuesday, Mr Ramos-Horta had said: "Even if Australia was a reincarnation of Mother Teresa, she would be very hesitant to concede that much to East Timor. I don't think any government would give away so much, even if he or she knew she was not the legitimate owner."

Instead, he proposed to treat Greater Sunrise revenue as a separate issue to the coming talks on maritime boundaries, in which Mr Alkatiri wants to claim Greater Sunrise.

"It means that even if, on paper, our boundary would include all of Greater Sunrise, we would be able to reach a separate agreement of revenue-sharing on Greater Sunrise which would be satisfactory to Australia," Mr Ramos-Horta said.


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