Subject: AP: The oil treaty between Australia and East Timor delayed

The Associated Press April 17, 2002

Australia Oil Treaty Delayed

CANBERRA, Australia (AP) - The signing of a treaty between Australia and East Timor over oil and gas revenue may be delayed due to ``technical differences,'' Australian Foreign Minister Alexander Downer said Wednesday.

Australia negotiated the agreement last year with East Timor's U.N. administrators on the division of royalties from oil and gas reserves in the Timor Sea. The accord was to be converted into a treaty on May 20, the day East Timor is scheduled to become an independent nation.

However, East Timor's newly elected Prime Minister Mari Alkatiri last week questioned his country's share of the royalties.

He said the position of maritime boundaries between Australia and East Timor - drawn up by U.N. and Australian officials last year and on which the split was based - would deprive East Timor of a fair share of money from one of the two oil and gas fields.

Downer said Australia would try to resolve the dispute before May 20, but conceded that the treaty signing may be delayed. ``They are technical differences,'' he said.

Under the current agreement, East Timor receives 90 percent and Australia 10 percent of royalties from the Bayu Undan oil and gas field. The field lies much closer to East Timor than Australia. Dili also will receive 18 percent of royalties from a second field, Greater Sunrise, while Canberra will get the rest. That field lies closer to Australia than East Timor.

Alkatiri was elected as prime minister last August. On Wednesday, independence leader and former guerrilla commander Xanana Gusmao was officially declared the winner of East Timor's first presidential election, the United Nations said.

The tiny half-island state was a Portuguese colony for four centuries until 1975. Nine days later, Indonesia invaded and occupied the territory until 1999, when a U.N.-sponsored ballot was held. Since then, the United Nations has governed East Timor in preparation for nationhood.

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