Subject: AFP: E.Timor PM hails agreement with Australia on Timor Sea oil and gas

E.Timor PM hails agreement with Australia on Timor Sea oil and gas

Friday December 9, 2005, 6:47 pm

DILI (AFP) - East Timor's prime minister has hailed a deal reached last month with Australia to settle a maritime border dispute over billions of dollars in revenue from Timor Sea oil and gas deposits.

"This is a good agreement for Timor-Leste (East Timor) but it is also a good agreement for Australia," Mari Alkatiri said in his first comments since the agreement reached in Australia's city of Darwin on November 29.

"This agreement also opens the way for the construction of a pipeline between Greater Sunrise and Timor-Leste and for the installation of a refining facility that will be the start of petroleum activities on Timorese soil," he said in a statement.

Tiny East Timor has been locked in a struggle with its huge southern neighbour over the resource revenues since it gained independence from Indonesia in 2002.

The dispute blew up when Australia insisted that a 1970s Timor Sea boundary agreed with Jakarta should remain in place after independence.

That boundary gave Canberra two-thirds of the sea area and most of its energy resources, including 80 percent of the large Greater Sunrise field.

East Timor wanted the boundary to be set at the mid-point between the two countries, giving it most of the resources.

The new deal will be formally signed in Sydney on January 12 next year by the two countries' foreign ministers, the statement said.

"Timor-Leste has not compromised its legal claim and legal position in respect of the question of maritime boundaries. This agreement takes account of the essential interests of both Timor-Leste and Australia," Alkatiri said.

The two countries have agreed to defer for 50 years any final decision on where their maritime boundary lies.

East Timor, one of the world's poorest nations, is already receiving 90 percent of revenues from a "Joint Petroleum Development Area" (JPDA) and this will continue.

"Today, we receive 90 per cent of the revenues of the JPDA, and with this new agreement, we will receive a total of 50 per cent of the Greater Sunrise," Alkatiri said.

Oil companies had deferred work on the Greater Sunrise project because of the two governments' squabbling over the resources split.

Dili had said the resources revenue was its only chance of ending its dependence on foreign aid

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