Asia Pulse

February 24, 2003 Monday

AUSTRALIA'S SANTOS HOPING FOR RATIFICATION OF TIMOR SEA TREATY

MELBOURNE, Feb 24

Oil and gas producer Santos Ltd (ASX:STO) said today time was running out for the Australian government to conclude a new treaty to enable the Bayu-Undan liquified natural gas (LNG) development in the Timor Sea to proceed.

Australia wants to ratify a new Timor Sea treaty to carve up energy resource revenue from the so-called Timor Gap between Australia and East Timor.

"It's very important to East Timor, it's very important to Australia and to Santos," Santos chief executive John Ellice-Flint told Channel Nine's Business Sunday program.

"Time is running out, but I'm confident that negotiations are continuing, and, hopefully, that the East Timorese government and the Australian government see that it's to the benefit of both to sanction the treaty."

Mr Ellice-Flint said the East Timorese government had already ratified the treaty.

He said there had been no guarantees from the Australian government on when it would ratify the treaty.

"That's a political decision," he said.

"I've got confidence that they understand the significance of it." Non-ratification would "be an issue" for Santos.

But if the Australian government did not ratify the treaty, Santos would not be able to proceed with selling LNG from the project.

"The new result is we wouldn't go ahead with the project that has potential revenues of around A$30 billion (US$17.94 billion)," Mr Ellice-Flint said.

He said there was a possibility that the treaty would not be ratified.

"From my perspective I wouldn't be happy until the ink's dry on the ratification of the Timor treaty," he said.

Mr Ellice-Flint said the deadline was March 11.

"But I'm confident that at the end of the day we'll get there," he said.

ASIA PULSE

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