Subject: SMH: New nation seeks jump in share of oil profits

Sydney Morning Herald October 9, 2000

New nation seeks jump in share of oil profits

East Timor will tell Australia today that it wants to almost double its share of oil and gas revenues from the Timor Gap when it begins negotiations for a new treaty covering the disputed Timor Sea boundary.

A senior adviser to the pro-independence CNRT/National Congress said several options were up for discussion, including that its share of Timor Gap revenue rise to 90per cent from the current 50/50 split.

"Generally, we want an outcome to compensate the long suffering of the East Timorese people but one which both sides will feel comfortable with," said Mr Alfredo Pires, an Australian-trained East Timorese geologist and energy adviser to the CNRT (National Council of Timorese Resistance).

There was general support for the 90per cent profit share being proposed by the president of the CNRT, Mr Jose Ramos Horta, he said. The head United Nations negotiator, Mr Peter Galbraith, was also known to favour a figure close to 90per cent.

"Obviously the current arrangement is for 50/50 and that is unacceptable," Mr Galbraith said by phone from Oslo, where he is receiving advice from the Norwegian Government on the "management of oil and gas reserves".

Mr Galbraith said East Timor's maritime boundary should be about halfway between Australia and East Timor, a notion that Canberra rejects.

By declaring its support for Indonesia's occupation of East Timor, Australia was able to negotiate favourable terms with Jakarta over the rights to the oil- and gas-rich Timor Gap, a rectangular swathe of ocean bed off Timor's southern coast.

After 10 years of talks, the two countries signed an agreement known officially as the "Treaty on the Zone of Co-operation between the Indonesian Province of East Timor and Northern Australia".

The final amount of revenue sought by East Timor from the Zone of Co-operation could be offset by guarantees on training and employment opportunities for East Timorese, Mr Pires said.

"If there is a lower profit share then we would like to see more East Timorese being employed and trained on a wage parity with Australians," he said. " Regardless, we want to see movement on the issue of training for Timorese."

Canberra is likely to be generous in its talks with the UN team negotiating on behalf of a soon-to-be independent East Timor. An economically viable East Timor is much preferred to an aid-dependant country relying on an annual handout from Australia. The independence leader Mr Xanana Gusmao said last week that he believed Australia would show goodwill.

Mr Gusmao said a successful outcome to the negotiations would boost East Timor's economic recovery and strengthen business links between East Timor and Darwin.

Mark Dodd

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