Subject: LUSA: Dili, Canberra remain apart on Timor Sea Treaty ratification

Australia Expects Delays
In Sea Treaty With East Timor and RA
Continuing talks with Australia over Timor Sea Treaty

27-11-2002 13:15:00. Notícia nº 4385884…

East Timor: Dili, Canberra remain apart on Timor Sea Treaty ratification

Dili, Nov. 27 (Lusa) - East Timor and Australia agreed to disagree Wednesday on a calendar for ratification of the oil and gas Timor Sea Treaty.

After meeting in Dili with an Australian delegation, headed by Foreign Minister Alexander Downer, Prime Minister Mari Alkatiri said he considered ratification of the treaty, signed on the country's May 20 independence day, a priority.

Alkatiri told Lusa he expected the Timorese parliament to ratify the treaty within a matter of weeks.

Downer, on the other hand, said Canberra needed new legislation prior to ratification, predicting ratification would take place in February.

The two sides made clear they also have different timelines for continuing negotiations over the offshore Greater Sunrise gas field, which falls outside the joint development area covered by the treaty.

Alkatiri said Dili was not in a hurry to complete the negotiations over the field, estimated to contain USD 40 billion in gas reserves.

In contrast, Downer said he hoped agreement on how to share Greater Sunrise could be reached by year's end.

ASP/SAS -Lusa-

Received from Joyo Indonesia News

Dow Jones Newswires November 27, 2002

Australia Expects Delays In Sea Treaty With East Timor

JAKARTA -- Australian Foreign Minister Alexander Downer said Wednesday he doesn't expect the Timor Sea Treaty will be ratified until February, which could delay a gas development by ConocoPhillips (COP) in the sea between the two countries.

East Timor remains committed to a year-end deadline to ratify the treaty, which gives the world's newest nation a 90% share of royalties from oil and gas pumped from a joint development area, with Australia getting the remainder.

But Australia wants to first sort out a dispute over the larger Sunrise gas field, which falls largely outside the joint development area, and is therefore not covered by the Timor Sea Treaty. Sunrise may contain as much as $40 billion in gas reserves, much larger than other fields in the area.

Under current maritime boundaries, agreed with Indonesia in the 1970s, 80% of Sunrise falls in Australian waters. But East Timor - which became formally independent in March after three decades of Indonesian occupation - is claiming a maritime boundary with Australia that would potentially take in all of the Sunrise fields.

On a one-day trip to East Timor to discuss the dispute, Downer said he hoped both sides could reach agreement on the so-called Greater Sunrise International Unitization Agreement by the end of this year.

"The unitization agreement will be completed by Dec. 31," Downer told reporters after meeting East Timor's Prime Minister Mari Alkatiri. Canberra will send a team of government negotiators to East Timor in the first week of December.

Ratification of the Timor Sea Treaty by the Australian government is only likely in February, once the problems over Sunrise are ironed out, Downer said.

Failure to ratify the treaty by the end of 2002 means ConocoPhillips is unlikely to make its deadline for developing a $3 billion liquefied natural gas operation based on its Bayu-Undan field, which is wholly located in the joint development area.

Any delay could put at risk ConocoPhillips' contracts to start supplying LNG customers by January 2006. A company spokesman declined to comment Wednesday.

ConocoPhillips has already committed to a $1.8 billion Stage 1 development of the field under which it will produce gas liquids from the fourth quarter of 2003. But the main project is in the Stage 2 development that will involve piping Bayu-Undan gas ashore to Darwin for processing into LNG for export to Asia.

Wary of the tight timetable, ConocoPhillips has already started work on access roads at the site of the proposed LNG plant, though formal company approval still depends on ratification of the Timor Sea Treaty. East Timor says ratification is wholly separate and isn't dependent on the Greater Sunrise talks.

-By Tom Wright, Dow Jones Newswires; 6221 3983 1277;

RA: Continuing talks with Australia over Timor Sea Treaty

EAST TIMOR: 28/11/2002 10:45:12 | Asia Pacific Programs

Australia's Foreign Minister Alexander Downer has returned to East Timor for the first time since the signing of the Timor Sea Treaty in May. The visit highlights the importance of the so-called Greater Sunrise Field .. a sticking point between the two countries that was the subject of today's negotiations with the East Timorese Prime Minister Mari Alkitiri.


TEMBY: Ever since the Timor Sea Treaty was signed on East Timor's first day of independence, the Prime Minister Mari Alkatiri has refused to accept the part of the treaty which gives Australia 80 per cent ownership of the multi-billion dollar Greater Sunrise gas field. Australia's response has been to insist that a separate Unitization Agreement which would allow the development of Greater Sunrise to go ahead under Australian terms, be signed prior to ratification of the treaty. This dispute has caused a deadlock in negotiations which Foreign Minister Alexander Downer must having been hoping to break today.

DOWNER: "We had a very useful mornings discussion with the Prime Minister and with other officials here in East Timor. We want to conclude all of the details of the negotiations we have with East Timor on the unitization of the Greater Sunrise resource before the end of the year consistent with a memorandum of understanding that the two prime ministers of Australia and East Timor signed on the 20th of May this year. We're not placing undue pressure on anybody, but we are taking the view that it's in East Timor's interests as well as of course Australia's interests to get all of the outstanding issues that we can resolve consistent with a Timor Sea treaty, we get those issues resolved as quickly as possible. And we have a memorandum of understanding already on concluding the unitization agreement by the 31st of December."

TEMBY: Prime Minister Alkatiri, however, seems to have hardened his position on Greater Sunrise. He wants to create a second Joint Petroleum Development Area or JPDA to govern the disputed field.

ALKATIRI: "What I have been making clear that we will never accept a linkage between Timor Gap as a JPDA, Joint Petroleum Development Area and agreement on unitization. Because we already adopted our law and our claims are clear. What Australians think is under their jurisdiction, we claim as ours. That is why our overlapping claim has to be treated as a zone with overlappping claims. Zone out of JDPA. And that is why we think that we have to ratify the treaty, without linking the treaty itself with Sunrise."

TEMBY: So it's mainly an issue of who has what share of Great Sunrise?

ALKATIRI: "Of course, of course. It is very important having two per cent of Greater Sunrise, or one hundred per cent of Greater sunrise."

TEMBY: You want one hundred per cent?

ALKATIRI: "Our claim is one hundred per cent, yes."

TEMBY: While Australia has indicated that the treaty won't be ratified until next year at the earliest, and a hold up in the process would deprive East Timor of vital revenue, Prime Minister Alkatiri doesn't seem to be wavering. Instead he's begun looking in to petroleum exploration with oil companies from allied countries such as Angola.

ALKATIRI: "With or without the ratification of Timor Sea Treaty we are going to begin the other activities on oil and gas, onshore and maybe around country, twelve miles around the country."

28/11/2002 10:45:12 | Asia Pacific Programs

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