Subject: OGT: Timor Sea wrangle

Wednesday, 13 November, 2002

Darwin, 13 November, OGT-The claim by the Democrats that the East Timorese are not getting a fair deal out of the distribution of Timor gas royalties has sparked a war of words in the Northern Territory.

The ABC reports that the Federal Member for the Northern Territory seat of Solomon has called on Democrat Senators to "get into a tinnie and relocate to Dili as they do not represent Australian views".

Dave Tollner's comments follow the tabling of a report calling on Australia to renegotiate the seabed boundary with East Timor.

Tollner claims the East Timorese are getting more than enough royalties and any plan to re-negotiate would see them receive nothing.

"They haven't taken in to account the work that's already been undertaken and the considerable work that the joint venture partners have undertaken," the ABC reported him as saying.

"To tear up all of that work and start again would put in to major question some of the contracts, particularly the Bayu Undan field and more than likely the Greater Sunrise field." Meanwhile, Joel Fitzgibbon, the Shadow Minister for Resources, has claimed Tollner doesn't understand the nature of the supply contract between the Bayu Undan venture partners and proposed purchasers, The Tokyo Electric Power Company Incorporated (TEPCO) and Tokyo Gas Co. Ltd. (TG).

"Bayu Undan venture partner Phillips Petroleum has expressed fear that failure to ratify the Timor Sea Treaty by year-end will put the project in jeopardy. One of the conditions of the project contract is the ratification of the Timor Sea Treaty within a specified timeframe," Fitzgibbon said.

"Phillips is very concerned that if the treaty ratification is held up by delays in the finalisation of a unitisation agreement in the Joint Petroleum Development Area, this could result in the loss of its LNG contract with its Japanese customers.

"During an interview on Top FM ... Mr Tollner said: 'This isn't the only iron Phillips has in the fire, and it's not the only place that Phillips can supply the contract from.'

"What Mr Tollner does not understand is that if the Bayu Undan contract falls over, then the Japanese are free to negotiate a cheaper price, or to cut another deal to purchase their gas elsewhere - maybe from another field within Australian waters, but possibly from another nation. Either way, Darwin would lose its job-creating LNG plant," Fitzgibbon said.

"David Tollner was attempting to defend the lack of urgency the Howard Government has displayed with respect to both the Bayu Undan and Greater Sunrise gas fields. The Government does not seem to see the urgency of the need to pipe natural gas into Darwin from both the Bayu Undan and Greater Sunrise fields. " Indeed, the Government has expressed a preparedness to jeopardise the Bayu Undan and Darwin LNG projects to maximise the tax revenue potential of the Greater Sunrise field.

"It is in the national interest that gas from both fields comes onshore to Darwin. But after more than six years in office, the Government has failed to develop a coherent strategy on the energy policy front to ensure that Australia's resources are exploited in a sustainable manner and in a way that ensures the maximisation of economic returns to the Australian community," Fitzgibbon concluded.


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