Subject: AU: US calls for fair Timor deal

Also: US seeks fair oil, gas deal for Timorese

The Australian

US calls for fair Timor deal

By Nigel Wilson, Energy writer and Roy Eccleston, Washington correspondent


THE battle over the Timor Sea's vast gas reserves intensified yesterday with political delays to the Greater Sunrise field development coinciding with a call from senior US Congress members for Australia to accelerate talks on a new maritime boundary with East Timor.

At stake are billions of dollars worth of reserves from existing and future gasfield developments in the Timor Sea, with the fledgling nation of East Timor seeking a new boundary that would vastly increase its share income.

In Canberra, a federal Government bid to put pressure on East Timor was thwarted yesterday when the Opposition sent legislation covering development of the Greater Sunrise gasfields to a committee for review.

Resources Minister Ian Macfarlane introduced bills designed to give legislative force to the so-called international unitisation agreement (IUA) between East Timor and the Greater Sunrise partners -- Woodside, ConocoPhillips, Shell and Osaka Gas. Ratification of the IUA, which sets the amount of revenue East Timor can take from Sunrise, is essential for the $6 billion development to proceed. Under the Timor Sea Treaty, signed in May 2002, Australia and East Timor agreed that 20.1 per cent of Sunrise should be in the Joint Petroleum Development Area, where East Timor is entitled to 90 per cent of production.

But the IUA provides that the revenue split can be redetermined by agreement at any time and on the final delimitation of maritime borders.

The legislation would have put pressure on East Timor to ratify the IUA. But East Timor has indicated it will not ratify the agreement unless Australia sets a timetable for talks on shifting the maritime boundary between the two countries.

East Timor wants the boundary outside Australia's economic zone to a mid-point between the two countries, a move that would give it greater access to billions of dollars in revenue from existing and future fields.

East Timor Prime Minister Mari Alkatiri has also called on Australia to stop producing from oil and gas reservoirs in the Timor Sea that could ultimately come under East Timor's administration.

Last night, Opposition resources spokesman Joel Fitzgibbon said the Government had attempted to bulldoze the legislation through both houses of Parliament in one day.

The Opposition blocked the legislation in the Senate and sent it to a committee for review. Its report will not be made for another two weeks.

Earlier, influential members of the US Congress joined international criticism of Australia for moving too slowly on revenue-sharing arrangements with East Timor.

Barney Frank, Democratic congressman from Massachusetts, along with 53 colleagues, has written to Prime Minister John Howard criticising his Government for failing to give a time frame to settle the deal. Mr Frank said an agreement should be possible within three to five years.

Australia should "move seriously and expeditiously in negotiations with East Timor to establish a fair, permanent maritime boundary and an equitable sharing of oil and gas resources in the Timor Sea", the letter said.

"Given the overlapping claims of the two countries, we would strongly hope that any revenue from disputed areas be held in escrow until a permanent boundary is established," it said.

Australia held talks with East Timor on the maritime boundary in November and has agreed to hold another round next month.

See also



US seeks fair oil, gas deal for Timorese

Washington March 11, 2004

US legislators have urged Australia to negotiate its maritime boundary with East Timor to give the tiny nation a fair share of Timor Sea resources.

The fate of substantial oil and natural gas deposits between Australia and newly independent East Timor depends on a boundary agreement to be hammered out between the two countries.

In a letter to Prime Minister John Howard, 53 members of the US House of Representatives urged Canberra to establish a "fair, permanent maritime boundary and an equitable sharing of oil and gas resources".

Massachusetts representative Barney Frank, who initiated the letter, said a fair agreement would help East Timor rebuild, alleviate mass poverty and avoid long-term dependence on foreign aid.

After winning independence from Indonesia in 2002, East Timor's parliament passed a law claiming a 200-nautical-mile exclusive economic zone from the island and sought negotiations for a permanent maritime boundary with Australia.

Canberra agreed to the talks, which were first held last November, but declined to accept a timetable for resolving the issue. The next round of talks is scheduled for April 19 to 23.

The US legislators urged Australia to hold monthly meetings as sought by East Timor, rather than the twice-yearly talks Canberra has insisted on.

"The world is watching closely how Australia treats East Timor," said Karen Orenstein, the Washington co-ordinator of the East Timor Action Network. "Australia will lose the goodwill it generated in 1999 if it cheats East Timor out of the tens of billions of dollars of petroleum revenue."

In 1999, an Australian-led force helped stem pro-Indonesia militia violence that followed East Timor's vote for independence.


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