Subject: AU: Timor seas deadline let slip

Also: Gas interests say Fed Govt too slow on Timor treaty

Timor Sea deadline let slip

The Australian 12 DEC 2002 By Nigel Wilson * Energy writer

THE Australian Government has reneged on an understanding that it would ratify the Timor Sea Treaty by the end of the year.

Government officials confirmed last night the treaty -- between Australia and the fledgling democracy of East Timor to share Timor Sea resources -- would not be introduced to Parliament before the sitting ended tomorrow.

East Timor officials described the decision as disappointing and warned that the Australian Government would stand condemned for consigning the new country to ``decades of poverty'' if the treaty was not honoured.

And Conoco-Phillips -- which hopes to develop a $3billion liquefied natural gas complex based on the Timor Sea Bayu Undan reserves -- said the decision put pressure on continuing the project.

Last-minute representations early this week to Prime Minister John Howard by Phillips and its Bayu Undan partner, Santos, failed to sway the Government into introducing the treaty before the parliamentary recess.

Government sources blamed the decision on last week's Dili riots, which, they said, had delayed a scheduled meeting of officials to discuss the so-called unitisation agreement for the Greater Sunrise gas reservoirs. It is the first time the Government has linked ratification of the treaty to the unitisation talks.

Phillips Darwin area manager Blair Murphy said the decision put pressure on the Bayu Undan LNG plans.

Federal parliamentarians have been told the failure to ratify the treaty by year-end will put the development of Bayu Undan in jeopardy. They heard that if the timetable for the Bayu Undan development was upset, revenues would be delayed and potentially reduced if default on a heads of agreement led to renegotiation of the contract price.

But the Australian Government is unalarmed. I'm sure Phillips has been involved in many international negotiations that have not met initial time frames. This one is no different,'' a ministerial spokesman said last night.

In Dili, where treaty ratification could take place as early as today, the decision has been treated with suspicion.

``We would be concerned if this meant the Australian Government was not honouring the agreement it made on May 20,'' Jonathan Morrow, head of the East Timor Office of Prime Minister Mari Alkatiri, said. ``The Bayu Undan project is as much in Australia's interest as it is in ours.

``We'd be concerned that the Australian Government should understand that if Bayu Undan LNG does not go ahead and we do not get the revenue stream we and our donor nations have been promised, Australia would be condemning East Timor to decades of poverty.''

It was also wrong of Australian government officials to link the Sunrise unitisation talks to the ratification of the treaty. Mr Morrow said the issues were totally unrelated.

Gas interests say Fed Govt too slow on Timor treaty

ABC Online Thu, Dec 12 2002

The head of the Timor Sea Office says the company wanting to bring gas from the Bayu Undan field to Darwin cannot wait indefinitely for the Commonwealth to ratify a new treaty with East Timor.

The East Timorese Parliament is committed to a December 31 deadline but the Australian Government will not deal with the issue until at least February.

He says the company Phillips has contracts it needs to satisfy and the treaty delay is not helping.

"Phillips Petroleum have told us they need the treaty ratified and they need it done quickly. We had been advised by the Australian Government that the end of the year was a possibility," he said.

"We're not the experts in Australian treaty ratification procedures but we certainly did assume that the end of the year was a reasonable deadline."

Northern Territory Chief Minister Clare Martin says she is disappointed at the delay and the treaty should have been dealt with during the current federal parliamentary sittings.

But she says the delay does not pose any threat to the Bayu-Undan project or the gas processing plant planned for Darwin Harbour.

"As I understand it, if the ratification of the treaty makes it to the first sittings in February, that will be satisfactory," she said.


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