Also - ETGOV: East Timor committed to International Unitisation Agreement for Greater Sunrise

21-10-2002 18:09:00. Notícia nº 4248061

East Timor: Dili wants deal on Timor Sea gas field by Dec. 31, says PM

East Timorese Prime Minister Mari Alkatiri said Monday that his country remains committed to concluding a utilization agreement for the Greater Sunrise gas field in the Timor Sea, despite an Australian oil company involved in the project claiming that Dili is seeking to delay the deal.

Australia and Timor signed the Timor Gap treaty on May 20, although this agreement to establish a 62,000 sq km joint petroleum development zone will not be ratified until the two countries agree on maritime boundaries.

Senior Canberra foreign ministry and treasury officials have said recently that development of the Greater Sunrise field, estimated to be worth USD 3.3 billion, cannot proceed until the Timor Gap treaty and utilization agreement are simultaneosly ratified.

The Greater Sunrise field lies 20 percent in the Timor Sea Joint Zone of Cooperation and 80 percent in Australian waters. Canberra is therefore keen to get the project under way as soon as possible.

David Maxwell of Woodside Petroleum, one of four companies involved in the project, told the Treaties Committee in the Canberra parliament recently that Dili was trying to stall the utilization deal - designed to streamline taxing and administration of the field - to derive more benefits from the agreement.

However, Mari Alkatiri expressed "total surprise" at these comments, saying that the Woodside representative had not brought the matter up at a recent meeting in Australia.

"The truth is that Timor remains committed to the date of Dec. 31 for the conclusion of the utilization accord.

But Timor will not be pressurized by Woodside, or anyone else, to sign an agreement that is unfair for the people of Timor", Alkatiri said in Lisbon on a state visit to Portugal.

Dili`s foreign minister, Jose Ramos Horta, told Lusa recently that it was crucial to find "a compromise solution to break the deadlock" over Greater Sunrise, which would have to be "more advantageous for Timor".

Ramos Horta said Dili "would like the biggest possible share", although it believes Canberra is negotiating in "good faith" and not attempting to damage Timor`s interests.

"They don't want to deal with the question of maritime frontiers, as they fear this will damage their regional interests, particularly with Indonesia, with whom they have a border that is currently beneficial for Australia", Dili`s foreign minister said.

ASP/CJB -Lusa-

REPÚBLICA DEMOCRÁTICA DE TIMOR-LESTE Office of the Prime Minister

Media Release:

East Timor committed to International Unitisation Agreement for Greater Sunrise

21 October 2002

At a hearing of the Australian Parliament's Committee on Treaties on Monday 14 October, senior Woodside Petroleum representative David Maxwell speculated that East Timor may allow negotiations with Australia over the Greater Sunrise gas field to `drag' as a `negotiating tactic' to `extract more value out of the unitisation agreement'.

"These statements are incorrect and extremely unhelpful," said East Timor Prime Minister Mari Alkatiri today, from Portugal. "The statements also came as a surprise, since Mr. Maxwell did not make his views known to my Government in Perth meetings, which took place only days before Mr. Maxwell testified before the Committee.

"The fact is that East Timor remains committed to a 31 December 2002 deadline for the conclusion of the Sunrise Unitisation Agreement. But East Timor won't be pushed by Woodside, or anyone else, into signing an Agreement which is unfair to the people of East Timor."

East Timor has indicated that it will not sign a Unitisation Agreement which is prejudicial to the location of future maritime boundaries, or which is inequitable. East Timor has no maritime boundaries with Australia. East Timor's position on Greater Sunrise is entirely consistent with international law and with the Timor Sea Treaty, signed by Australia and East Timor on 20 May this year.

The Greater Sunrise negotiations concern the unitisation of the gas field, which straddles the Eastern perimeter of the Timor Sea Treaty revenue sharing area. `Unitisation' refers to the process by which a petroleum deposit, which lies across an international boundary or the boundary of a contract area, is treated as one single unit for purposes of technical and commercial development and, as far as possible, for regulatory, administrative and fiscal purposes.

The Greater Sunrise field may contain 8.35 trillion cubic feet of gas. In the Timor Sea Treaty, East Timor and Australia committed to the equitable unitisation of the Greater Sunrise field on the basis that 20.1% lies within the Treaty area, and 79.9% is attributed to Australia.

The Greater Sunrise joint venture partners have not yet agreed on a development proposal for the field.

END