East Timor wants Sept-Oct border talks with Australia

Reuters, 08.26.03, 1:11 AM ET

By Michelle Nichols

CANBERRA, Aug 26 (Reuters) - The world's newest nation, East Timor, wants to begin negotiations soon with Australia to draw a maritime border in the resource-rich waters between them.

East Timor Prime Minister Mari Alkatiri wrote to Australian Prime Minister John Howard on Monday suggesting a late September or early October timeframe for the talks, Alkatiri's legal adviser, Alisa Newman Hood, told Reuters on Tuesday. "We presume the Australians will need a little bit of time to get organised, as will we, but we imagine that wouldn't be more than a couple of weeks or a month," said Newman Hood, adding East Timor would like to agree a border in three to five years.

Negotiations are likely to be heated with billions of dollars worth of oil and gas royalties at stake. The Timor Sea holds the Greater Sunrise and Bayu-Undan gas fields and the Laminaria, Corallina, Elang/Kakatua/Kakatua North oil fields.

East Timor's Foreign Minister Jose Ramos-Horta said the reserves in the Timor Sea were worth around A$30 billion, Australian Broadcasting Corporation radio reported on Tuesday.

East Timor, which gained independence in 2002 after a successful 1999 referendum to break away from Indonesian rule, has promised to use royalties to help alleviate poverty, create jobs and improve education in the nation of 760,000.

It claims the maritime boundary is 200 nautical miles from its coastline, which is consistent with East Timor's entitlement under international law and the United Nations Convention on the Law of the Sea.

But Australia is also allowed a boundary 200 nautical miles from its coast and this overlaps with East Timor's entitlement.

"These negotiations can, by their very nature and complexity, take a good deal of time. I don't know how long such negotiations will take, but we're happy to sit down with East Timor," said Australian Foreign Minister Alexander Downer on Monday.

AUSTRALIA A BULLY

The two countries enforced a treaty in March to act as a temporary revenue-sharing treaty until a maritime boundary is drawn. It splits revenue from a shared 62,000 sq km (23,900 miles) region 90:10 in favour of East Timor.

The Timor Sea Treaty, which could be worth up to A$8 billion ($5 billion) in revenue to East Timor, nullified a previous agreement that split the revenues equally between Australia and Indonesia.

But a separate, more controversial agreement had to be drawn up for the potentially lucrative Greater Sunrise gas field, which currently lies 20.1 percent in the treaty area and 79.9 percent in Australian waters.

East Timor accused Australia of bullying it into signing the Sunrise deal. It believes if a maritime boundary was drawn along the median line between the Australia and East Timor then most, if not all, of Greater Sunrise would be in East Timor waters.

"For the East Timor side of course it would be great if ... John Howard were to pretend that he is Mother Theresa and simply give us 100 percent of our claims. I don't think he is going to do that," Ramos-Horta told ABC radio.

The Greater Sunrise venture, operated by Woodside Petroleum, aims to begin supplying liquefied natural gas (LNG) to Asian markets by 2009 by constructing the an LNG production plant at sea. Other shareholders are Royal Dutch/Shell, ConocoPhillips and Osaka Gas Co Ltd.

Bayu-Undan is operated by ConocoPhillips and has a deal to supply three million tonnes of LNG annually for 17 years from 2006 to Tokyo Gas and Tokyo Electric Power Co.

Other shareholders in the venture are Santos Ltd, Japanese energy group INPEX Corp, Eni unit Agip, Tokyo Electric Power and Tokyo Gas Ltd. ($1=A$1.54)

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