Subject: AU: Woodside taps Timor over treaty
The Australian April 14, 2004
Woodside taps Timor over treaty
By David King and AFP
ENERGY giant Woodside Petroleum warned yesterday that it would not proceed with a multi-billion dollar Timor Sea gas project unless the East Timorese Parliament ratified a border treaty with Australia.
The immediate future of the $7billion Greater Sunrise joint venture became clouded yesterday after the East Timorese Prime Minister Mari Alkatiri said Dili would not ratify a border treaty known as an International Unitisation Agreement.
The East Timorese are unhappy that under the terms of the agreement they would receive only 18 per cent of the revenues from the oilfield, while Australia would get 82 per cent.
A Woodside spokesman said yesterday that the ratification of the IUA was crucial for the development of the project.
"The ratification of the IUA is a necessary pre-requisite for continuing with the plan," he said.
"We can't progress the level of expenditure required without both the legal and fiscal security that the IUA would deliver."
The agreement was ratified by the Australian Parliament last month. The second round of official talks on the boundary are scheduled to begin in Dili on Monday.
Mr Alkatiri told ABC television the Australian Government had not negotiated in good faith.
"I had always considered the Howard Government as good partners, but suddenly I realised that when billions of dollars are involved they became really bad partners," he said.
Mr Alkatiri said his parliamentary colleagues would not ratify the IUA, which was signed late last year.
"It doesn't make sense now ... to table the IUA (in) parliament for ratification," he said.
A spokesman for Mr Alkatiri said the Prime Minister still intended to submit the IUA although he did not know when.
"The process of ratification would be made easier if Australia ceased its unilateral exploitation of the disputed area and entered into good-faith negotiations to secure a permanent maritime boundary in the Timor Sea," the spokesman said.
A Woodside spokesman said negotiations on the ratification of the IUA would continue through diplomatic channels.
He said the company was confident that an agreement would be reached by the end of the year.
"The Joint Venture aims to secure a foundation customer and take a single development plan forward into the detailed design phase," he said.
"We are confident that it could be achieved by the end of the year."
Mr Alkatiri has said East Timor would call on the US to broker the deal on the disputed maritime boundaries.
The Greater Sunrise project, 550km northwest of Darwin in the Timor Sea, is expected to generate at least $10 billion in revenue.
East Timor regards the project as a financial lifeline that could lessen the nation's dependence on international aid.
Woodside is the lead partner in the Greater Sunrise Joint Venture, which also includes ConocoPhillips, Shell and Osaka Gas.
Woodside shares rose 27c to $16.67.
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