ABC

E Timor 'holding out' for better boundary deal

Monday, 19 July 2004

Prime Minister John Howard says East Timor is holding up a major resource project to get leverage in boundary negotiations with Australia.

Mr Howard says the wrangle over the Sunrise oil and gas field in the Timor Sea is being portrayed as a struggle between tiny East Timor and big Australia.

He says other countries are saying that Canberra should give in to East Timor, but this would mean giving up territory owned by Australia.

Mr Howard told Darwin commercial radio that the negotiations involve major Australian assets and a boundary previously agreed with Indonesia.

"We're talking here about altering the arrangement that we negotiated with Indonesia when Indonesia was part of East Timor," he said.

"Applying all the fairness principles that we can see, we don't see a case. And the Sunrise field can go ahead once the details of once what's called the Unitisation Agreement have been ironed out.

"We've done that, we've reached agreement on that. And the East Timorese are holding that up because they're trying to use that as leverage to get a better deal."

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