Subject: AP: ET PM says deal over Timor Sea gas unlikely by December target date

Also- Woodside Issues New Warning on East Timor Project

Associated Press October 29, 2004

East Timor prime minister says deal over Timor Sea gas unlikely by December target date

East Timor's prime minister said Friday it was unlikely a deal would be reached with Australia by a December target date over how to share revenue from a US$5 billion (euro 3.9 billion) natural gas project in the Timor Sea.

Mari Alkatiri's comments came after a third round of talks had ended without an accord on the project in an area where the maritime boundary is in dispute.

The prime minister said the two sides weren't even close to an agreement.

"If you can really get into a solution ... by December, good. It's good for all of us. But we are not rushing because we do believe that this timeframe is not (a) real one. It was an event timeframe," Alkatiri told reporters in the Western Australian capital of Perth.

On Thursday, Australia's chief negotiator, Doug Chester, warned that the Greater Sunrise gas field development could be abandoned if no agreement is reached by Christmas on sharing US$30 billion (euro 23 billion) in oil and gas royalties .

Chester said that the two countries had been close to striking a deal, but the East Timorese changed their negotiating position this week.

Impoverished East Timor wants a maritime border midway between the two countries, which it argues would provide Dili with an extra US$12 billion (euro 9.7 billion) in total revenue.

Australia, however, wants the border it shared when Indonesia occupied East Timor, which followed the Australian continental shelf that at some points is only 150 kilometers (90 miles) from the East Timorese coast.

That border puts the bulk of natural resources under Australia's control.

In July, Woodside Petroleum warned its Sunrise gas project in the Timor Sea would stall if the countries failed to resolve their dispute by the end of the year.

The latest talks had been aimed at achieving a solution to the dispute over resources, without setting a permanent maritime boundary, Alkatiri said.

It was not immediately clear when the next round of talks would take place.

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Woodside Issues New Warning on East Timor Project

PERTH, Oct 28 Asia Pulse/Antara - Woodside Petroleum Ltd (ASX:WPL) has again issued a warning on the future of the US$5 billion Sunrise gas project.

The firm said again today that development of the project would stall if Australia and East Timor cannot settle a maritime boundary dispute by the end of the year.

A Woodside spokesman said the company's position remained unchanged despite the third in a series of talks between the two nations ending yesterday with no agreement in sight.

"Unless we have regulatory and fiscal certainty by the end of the year the project stalls," the spokesman said.

Woodside said in July the chance to lock in significant sales contracts for the massive joint venture project could be set back years if an International Unitisation Agreement between Australia and East Timor was not signed off by the end of the year.

Australia's parliament ratified the pact in March, but East Timor wants an agreement to set a permanent maritime boundary.

Woodside Petroleum, Shell, ConocoPhillips and Osaka Gas are partners in the Sunrise development that is believed to have enough gas to support a 5.3 million tonne per annum liquified natural gas development.


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