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E Timor denies seabed deal reached. 21/05/2005. ABC News Online

E Timor denies seabed deal reached

East Timor's Foreign Minister has rejected reports of a $5 billion deal to resolve the dispute over the seabed boundary.

On the third anniversary of East Timor's independence, Jose Ramos Horta says the country's foreign policy objective is to maintain strong relations with its two biggest neighbours, Indonesia and Australia.

However, he says reports of East Timor considering an Australian proposal to suspend negotiations on the maritime boundary for 50 years are wrong.

"This is pure, absolutely pure erroneous speculation by the media," he said.

"So far no figures have been discussed and to put it in such a way that we agreed to shelve sovereignty for a particular price-tag, that is absolutely erroneous."

After a meeting in Sydney on May 13, the terms of an agreement were reportedly finalised by officials.

Foreign Minister Alexander Downer said after the meeting that the two countries were on the threshold of an agreement that would allow oil and gas projects to go ahead.

"Discussion were very successful, there will probably be no further need for negotiations," he said.

"The conclusion that the officials reached will be taken back to ministers in both East Timor and Australia and be given consideration.

"Assuming that the East Timor Government, as well as our government, is happy with the conclusion reached at this round of negotiations, then we will be able to move towards signing an agreement."