Subject: East Timor warning on oilfield control

Dominion Post (NZ)

East Timor warning on oilfield control

19 August 2003


Australia has been warned by East Timor not to play hardball over control of the oil-rich seabed in the Timor Sea.

East Timor Prime Minister Mari Alkatiri, who was in Wellington yesterday for talks with senior politicians, said that East Timor was grateful for Australian aid and for its role in leading the intervention force which established conditions for its independence from Indonesia.

But he said Timor Sea oil and gas revenues were vital to East Timor's economic development.

Australia was a big donor and "if we can get back our resources, we can reduce this assistance and burden for Australia", he said.

However, he also warned Australia not to push too hard on the issue of maritime boundaries.

"We are between two giants in this area (Australia and Indonesia) and we don't want one of them to push us to be closer to the other."

In March, Australia and East Timor signed a temporary joint development agreement covering the Timor Sea oilfields.

With revenue split 90:10 in favour of East Timor, the country stands to gain $15 billion in oil revenues over 20 years, but the deal, signed under pressure from Australia, provides for the oil to be pumped to Darwin, which will gain most from associated investment.

Dr Alkatiri said the seabed boundaries had not yet been defined.

But if the rules of international law were applied the field would be wholly in East Timor control.

East Timor regarded Australia as a friend rather than an enemy "and what we are looking for is a clear limitation of our territory and that of Australia".

A situation where claims overlapped was a deterrent to investment.

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