Subject: Timor's Alkatiri to sue over `false allegations' of oil and gas bribes

The Australian

Thursday, June 5, 2008

Timor's Alkatiri to sue over `false allegations' of oil and gas bribes

Paul Toohey

A VINDICATED but bitter Mari Alkatiri, East Timor's Opposition leader, has vowed to sue political figures and journalists for reporting allegations he had received $2 million in bribes from Timor Gap's leading producer, ConocoPhillips.

The US District Court in Texas dismissed a $US30 billion claim last month brought by US oil explorer Oceanic and its Petrotimor subsidiary, which alleged ConocoPhillips had bribed Dr Alkatiri, the Fretilin party chief, to prevent Oceanic from winning oil and gas concessions in the Timor Gap.

Oceanic is reportedly appealing the ruling. ``Let them do this. We will see,'' Dr Alkatiri said from Lisbon yesterday.

``Besides being false allegations, this is really stupid.''

In 1972, according to the judgment, Australia and Indonesia agreed to jointly exploit undersea oil and gas.

In 1974, Portugal, then in control of East Timor, independently granted Petrotimor -- of which Oceanic owns 80 per cent -- the right to explore and produce in the same area, later to become known as Timor Gap.

Petrotimor lost its purported interests when Indonesia invaded East Timor in 1975.

By 1989 Australia and Indonesia had formalised their arrangement and in 1991 ConocoPhillips successfully bid to develop seabed blocks. It would go on to become the biggest operator in the petroleum field. In 2001, Oceanic asked the UN -- which held transitional power in Timor -- to honour the concessions it had been awarded by Portugal in the 70s.

This was refused.

Upon winning independence, Dr Alkatiri, East Timor's first prime minister, confirmed the ConocoPhillips contracts and ratified the Timor Gap Treaty.

According to Oceanic, this was because ConocoPhillips had bribed Dr Alkatiri with a suitcase stuffed with $2 million in cash.

The money was alleged to be held in a Darwin bank account, in Alkatiri's brother's name.

In 2001, Oceanic took ConocoPhillips to court in Australia in an attempt to recover its Portuguese concessions. The Federal Court ruled it had no jurisdiction.

In 2004, Oceanic launched a similar action in the US District Court.

That was also ruled non-justiciable, but Oceanic kept the case alive by using US racketeering laws to attack ConocoPhillips and the Timor Gap Joint Authority, on bribery grounds.

Houston judge Lynn Hughes said Oceanic's case amounted to ``50 pages of trivia''. The judge said claims that the president of ConocoPhillips ``flew to East Timor to hand an official (Alkatiri) a suitcase full of cash'' were implausible and unsubstantiated.

Oceanic claimed that if not for ConocoPhillips' bribery, it would have won concessions to the seabed. The judge said no such case had been made out.

``Oceanic may well have been the victim of international politics when it lost its Portuguese concession to the Indonesian invasion,'' the judge said.

``It cannot recover for its losses to political risk 30 years ago -- not from Indonesia, not from ConocoPhillips.''

Dr Alkatiri said: ``I never had any doubt this was false allegations now the decision is made by the court, I have decided to contact my lawyers to sue all those people who tried to damage my image on baseless allegation. I will sue everybody I can.''

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Joyo Indonesia News Service ==== ========= ==== =======


 

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