Subject: Letters to Guardian on Timor Oil
Letter published in the Guardian, UK Friday, October 24 2003
Australia the oil bully
The Australian High Commissioner believes that the interim legal
framework for Timor Sea petroleum development is a winner for East Timor
(letters, October 20). In fact, the real winner is Australia.
Under arrangements East Timor signed on its first day of independence,
Australia receives revenues from about 59% of the deposits that are closer
to East Timor than to Australia. Under accepted legal principles, these
deposits would belong to East Timor, but Australia responded reluctantly
to requests to begin negotiations on a maritime boundary; preliminary
talks begin next month, but as the Australian foreign ministry said:
"We wouldn't start putting time frames on it."
If a boundary settlement is not agreed while there is still oil under
the sea, Australia's withdrawal from international legal mechanisms for
settling boundary disputes will leave the tiny nation without recourse.
Many programmes, including some funded by Australia, teach East Timor
about the rule of law. But the lesson of Australia's position is that if
the booty is rich enough, law is irrelevant. It prefers to bully a country
that needs oil to fund basic health care and education.
Australia claims to be a major benefactor of East Timor, but its
assistance pales in comparison with the tens of billions of dollars it
will reap from East Timor's resources under current arrangements. In fact,
Australia has taken in more (over $1.2 bn) from the Laminaria oilfield
than it has given East Timor in aid. This field began production in 1999
while the smoke was still rising from East Timor, but more than 70% of its
oil has already been extracted and sold.
Jesuina Cabral Charles Scheiner Institute for Reconstruction
Monitoring, Dili, East Timor
Oil deal is a winner for East Timor
Monday October 20, 2003 The Guardian
A legal framework for developing the petroleum deposits in the Timor
Sea for the benefit of Australia and East Timor is already complete (Anger
in East Timor as Australia plays tough over gas reserves, October 14). The
Timor Sea treaty and Sunrise unitisation agreement are a win-win package
for both countries and a fair basis for developing resources for mutual
benefit and underpinning East Timor's economic viability. The treaty gives
East Timor 90% of production from the Joint Petroleum Development Area.
This is generous compared with the 50:50 split in the former treaty with
Indonesia, especially given that Australia maintains its long-standing
claim to the entire continental shelf off Australia.
The revenues East Timor will receive as a result of this distribution
will be a major contribution to creating a sound economic base and
long-term stability. Development of the oil and gas resources, including
the major Bayu-Undan field, is proceeding and revenue has already started
The treaty contemplates unitising the Sunrise deposit on the basis that
20.1% of the resource lies within the JPDA and 79.9% is attributed to
Australia. The unitisation agreement confirms that distribution. Neither
instrument prejudices future maritime boundaries between Australia and
Australia's removal of maritime boundary disputes from compulsory
dispute settlement reflects our view that such disputes are best settled
by negotiation, not litigation. We are looking at engaging with East Timor
on these issues soon. The purpose of the treaty is to enable the
development of the resources of the JPDA, notwithstanding the competing
claims. Both sides understand this and the importance of not letting the
issue of permanent delimitation generate uncertainty, and potentially
delay, or even lead to the cessation of oil and gas production.
Australia has been in the front line of support for East Timor's
transition to independence. It remains a lead donor and is among the
largest contributors of personnel - military, police and civil
administrators - to the UN mission. We remain committed to continuing to
assist the new nation's development.
Michael L'Estrange Australian High Commissioner
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