Subject: AP: Australia, East Timor Agree to a Framework to Share Timor Sea Oil and Gas

Thursday March 10, 8:09 am ET

Australia, East Timor Agree to a Framework to Share Timor Sea Oil and Gas Riches

CANBERRA, Australia (AP) -- Australia and East Timor have agreed on a framework for sharing US$30 billion (euro23 billion) in sea bed oil and gas royalties, Australia's Foreign Minister said Thursday.

Negotiators representing one of the region's richest nations and one of the poorest met in Canberra for three days this week to discuss where their common maritime boundary should lie in the Timor Sea.

"I think we made very good progress, though there have been times in the past where I thought we were really getting there and it's gone backward," Foreign Minister Alexander Downer told reporters in the southern city of Melbourne.

"I think we've got the framework of an agreement nutted out; we've got more details still to work through but I think we're making very good progress with East Timor," he added.

Downer and his East Timorese counterpart Jose Ramos Horta, a 1996 Nobel Peace Prize laureate, had predicted mid last year that an agreement would be settled by last Christmas.

But monthlong negotiations broke down acrimoniously last October, with each side accusing the other of derailing a solution.

East Timor's head negotiator, Jose Teixeira, said the new round this week ended with agreement to continue talks soon.

East Timor wants the border to lie in the middle of the 600 kilometers (370 miles) of sea separating the two countries.

However, Australia wants the same boundary it set with Indonesia, which occupied East Timor in 1975-1999 which is much closer to East Timor.

Australian officials said before the most recent talks that they would seek a "creative solution" that would enable the US$5 billion (euro3.8 billion) Greater Sunrise gas field -- the largest in the Timor Sea -- to be tapped without the permanent boundary question being settled.

Woodside Petroleum Ltd., one of the companies hoping to pump oil and gas out of the region, shelved the Greater Sunrise project last year because the two countries had failed to broker a revenue-sharing deal by the company's Christmas deadline.

Australia insists that any solution must provide Woodside and its partners with legal certainty to proceed and must postpone any agreement on a permanent maritime boundary for at least 50 years.

Postponing the boundary agreement is aimed at ensuring that it remains in place until the seabed energy reserves are exhausted. Australia would pay East Timor compensation for accepting those terms.


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