Subject: Australia expects East Timor gas pact in months

Australia expects East Timor gas pact in months

Tue Sep 13, 2005 10:35 AM ET

By Marguerita Choy

PARIS, Sept 13 (Reuters) - Australia expects to finalise a deal with East Timor in the next few months that will split the revenue from the disputed Greater Sunrise gas field, a government official said on Tuesday.

Greater Sunrise operator, Australia's Woodside Petroleum Ltd. (WPL.AX:), froze the $5 billion project in December last year after talks between East Timor and Australia collapsed over the biggest gas resource in the Timor Sea.

Both sides have repeatedly said since April they expect a pact to be finalised soon with only minor details to be sorted out, with East Timor last putting a timeframe of August for the pact.

"Agreement has been reached but it has not been formally signed. We are hopeful it will be signed in the next few months," said John Griffiths, director general of offshore resources at the Australian ministry of industry, tourism and resources.

"It depends on agreement by the governments at the highest level. The Australian prime minister is sympathetic to the issue with East Timor," he said on a visit to Paris.

About 20 percent of Greater Sunrise, which holds an estimated 8 trillion cubic feet of gas and up to 300 million barrels of condensate, lies in the Joint Petroleum Development Area (JPDA) and the rest in what Australia claims is exclusively in their jurisdiction.

Under the JPDA, 90 percent of revenues go to East Timor and 10 percent to Australia.

But under the yet-to-be formalised pact, East Timor has agreed to shelve talks on drawing up a permanent sea border in exchange for dividing revenues from the field.

"We have agreed to keep the maritime boundaries and joint development area but are giving more revenue from that field, 50 percent, to East Timor," Griffiths said.

East Timor, which gained independence in 2002 after centuries of Portuguese colonial rule and 24 years of occupation by Indonesia, is depending on oil and gas revenues to rebuild its economy and wean itself from foreign aid.

Griffiths said the Australian government was keen that the project proceeds.

"Australia provides a lot of aid to East Timor, and wants to see that they have their own revenue and are on a surer footing," Griffiths said.

The joint venture was aiming to make its first liquefied natural gas (LNG) deliveries from the project by 2010.

The project's other stakeholders are: ConocoPhillips (COP.N: Quote, Profile, Research), Royal Dutch/Shell (RDSa.L: Quote, Profile, Research) (RDSb.L: Quote, Profile, Research) and Japan's Osaka Gas Co. Ltd. (9532.T: Quote, Profile, Research). Woodside is 34 percent-owned by Shell.

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