Subject: DJ: Australia, Timor Likely To Resume Boundary Talks In April

Australia, Timor Likely To Resume Boundary Talks In April

Tuesday March 29, 10:36 PM EST

CANBERRA -(Dow Jones)- Australia and East Timor are expected to resume maritime boundary negotiations in Dili late next month, a senior Canberra official said Wednesday.

"It's not absolutely confirmed yet but it's likely to be the last week of April and likely to be in Dili," the official from the Department of Foreign Affairs & Trade told Dow Jones Newswires.

The dates being considered for the three-day talks are April 26, 27 and 28.

The two parties will continue to focus on a "creative solution" proposed by East Timor that would allow oil and gas projects in the Timor Sea to be exploited, pending a permanent boundary being settled, the official said.

The last round of top-level diplomatic negotiations was held in Canberra in early March.

"There's still a bit of work to be done. It was all very good in March and we sorted out of a number of issues and we are getting a better understanding of what Timor is proposing," said the official.

"There's no paper on the table. That's why we probably won't finish ( negotiations) at the end of April.

"Assuming everything goes well, then you'd imagine there would need to be another discussion fairly soon after to nail it down," the official added.

Impoverished East Timor's economic well-being rests on Dili's bid for a major redistribution of royalties from the vast oil and gas deposits that lie beneath the sea that divides the two countries.

Negotiations broke down in October last year, prompting oil and gas producer Woodside Petroleum Ltd. (WPL.AU) to shelve its US$5 billion Sunrise liquefied natural gas project.

The breakdown meant Woodside couldn't meet its end-2004 deadline for legal and commercial certainty that would allow it to capture a 2010 marketing "window" for LNG exports.

Woodside has said it won't spend any more money to advance Sunrise and has reassigned staff to other projects.

Woodside owns 33.4% of Sunrise, regarded as the richest prize in the Timor Sea. Its partners are ConocoPhillips (COP) with 30%, Royal Dutch/Shell Group ( RD) with 26.6% and Japan's Osaka Gas Co. (9532.TO) with 10%.

Australia and East Timor have agreed to an interim revenue-sharing deal covering a part of the Timor Sea that takes in the ConocoPhillips-operated Bayu Undan field. This Joint Petroleum Development Area splits the government revenues 90-10 in East Timor's favor.

But East Timor has so far refused to ratify a second revenue-sharing deal known as the International Unitization Agreement. Under this deal, 80% of Woodside's Sunrise gas field would fall within Australian waters and the remaining 20% in the JPDA.

Success in the "creative solution" would mean negotiations between Australia and its northern neighbor on a permanent boundary would be postponed for decades until the Sunrise resource was exhausted.

And if the parties resort back to thrashing out a permanent maritime border, this process will take many years.

In terms of a permanent boundary, Dili wants a border in the middle of the 600 kilometers of ocean separating the two nations.

However, Canberra argues the boundary should be the edge of the continental shelf, which in some places is just 80 kilometers from East Timor's coastline. That border would put the bulk of natural resources in the Timor Sea under Australia's control.

-By Veronica Brooks, Dow Jones Newswires;


-Edited by Paul Godby

Dow Jones Newswires 03-29-05 2236ET

Back to March menu 
World Leaders Contact List
Main Postings Menu