Subject: AFR: Ramos-Horta Pours Oil On Troubled Treaty Waters

Australian Financial Review

July 16, 2003 Wednesday

Ramos - Horta Pours Oil On Troubled Treaty Waters

James Eyers

East Timor's Foreign Affairs Minister, Jose Ramos-Horta, has reassured investors that Timor is happy with the treaty on sharing the Timor Sea's oil wealth with Australia, despite claims by a cabinet colleague last month that it was unfair.

Dr Ramos-Horta told a recent briefing in Sydney that the ratification of the Timor Sea Treaty between East Timor and Australia in March would allow East Timor to increase spending on vital infrastructure and attract foreign investment. The treaty gives the country 90 per cent of the royalty revenues from the Bayu-Undan gas project.

"We have secured an arrangement that will deliver to East Timor, by 2004-05, predictable revenue." Dr Ramos-Horta said.

"It doesn't make East Timor a Kuwait, but it will meet all our budgetary requirements and will bring some significant input into our budgetary strategy."

East Timor's Secretary of State for Tourism, Environment and Industry, Jose Teixiera, said last month that East Timor should be entitled to more of the revenue from the project, which is being developed by ConocoPhillips.

Mr Teixiera said East Timor had a legitimate claim to move the seabed boundary between Australia and East Timor to the middle point, which would give East Timor control of virtually all the Bayu-Undan and the still to be negotiated Sunrise gas fields.

But Dr Ramos-Horta said the treaty had been fairly negotiated.

exploration and sharing of the oil and gas in the Timor Sea," he said.

"When you negotiate oil and gas, even Mother Teresa becomes tough. And John Howard has never claimed to be Tom Cruise or Mother Teresa. But he has been a genuine friend of East Timor. "

Dr Ramos-Horta said Prime Minister Howard's "paramount personal obligation" was to protect Australia's interests.

"We are the ones who have to try to outsmart [Australia] if we can," he said.

He said Australia was making a "serious commitment" in Solomon Islands, but questioned whether the operation would lead to long-term security in the South Pacific.

"At the end of the day, it will be us, the people in these islands, who will have to show maturity, leave behind our disagreements, our ambitions, and think of the greater good of the world economy," Dr Ramos-Horta said.

He said Australia should provide more training for East Timor's military and police to reduce the terrorist threat in the region.

"In Timor, we need Australian support in continuing to strengthen our defences, our security forces, our police and our counter-terrorism [capabilities].

"We don't have any experience in counter-terrorism," Dr Ramos-Horta said.

"Poverty leads to renewed security challenges."

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