Subject: AFP: East Timor turns to China for energy exploration

Also: E Timor to woo oil, gas explorers

Last Update: Monday, December 13, 2004. 9:08pm (AEDT)

East Timor turns to China for energy exploration

East Timor will entrust China's biggest oil firm PetroChina to look for its inland oil and gas deposits, President Xanana Gusmao said on a visit to the island nation's leading donor Japan.

PetroChina will complete surveys to locate and estimate the size of oil and natural gas at the field in southern East Timor, Mr Gusmao told the Japanese business daily Nihon Keizai Shimbun.

East Timor plans to launch full-scale energy development in the field in 2006 and will welcome Japanese and other foreign companies, except for oil majors, to take part in it, he said.

East Timor, which gained independence in 2002 after more than two decades of struggle against Indonesian rule, is looking to the energy sector as a major source of income with potentially billions of dollars of revenues available.

The country's Secretary of State for Environment and Investment, Jose Fernandez Teixeira, has said parliament was due to endorse a petroleum law this week, paving the way for foreign companies to secure oil and gas exploration licences in 2005.

Mr Gusmao on Monday met Prime Minister Junichiro Koizumi and thanked Japan for giving East Timor a "great amount" of aid since it hosted an international donors' conference in 1999, Japanese officials said.

Japan also sent peacekeepers to East Timor.

Foreign Minister Nobutaka Machimura told Gusmao separately that Japan would send a mission to Dili early next year to discuss future cooperation.

Mr Gusmao told the Japanese leaders that East Timor, as a new UN member, would give "full cooperation" to Japan's bid to become a permanent member of the UN Security Council.

After leaving Japan on Monday, he was scheduled to meet Indonesian President Susilo Bambang Yudhoyono on the resort island of Bali for talks aimed at mending ties between the two countries.



The Australian

E Timor to woo oil, gas explorers

Nigel Wilson, Energy writer


EAST Timor's parliament is set to pass legislation paving the way for foreign companies to secure oil and gas exploration licences in 2005.

This will allow Chinese and Malaysian operators to take an active role in oil and gas exploration. But there is little chance of a deal that will stop the Greater Sunrise liquefied natural gas project being postponed.

East Timor sources said last night that because Australia had insisted the Greater Sunrise agreement be linked to the future of maritime boundaries between the two countries, there was little prospect of talks resuming before the end-of-year deadline set by Sunrise operator Woodside Petroleum.

But Australian government sources said it was up to the East Timorese to come back to the negotiating table with new proposals.

At this late stage there was no evidence a new strategy was being developed in Dili.

East Timor's Secretary of State for Environment and Investment Jose Teixeira has confirmed the petroleum legislation will be passed before Christmas.

He said the draft laws had been subject to nine months of talks with international industry groups and domestic stakeholders to strike a balance between competitiveness and transparency and accountability.

The aim was to create a modern, progressive petroleum law that also gave East Timor the competitive edge needed to attract investment.

The new law says all oil and gas profits earned by the state are to be deposited into a petroleum fund to be overseen by parliament and a council of advisers.

Mr Teixeira said the legislation was a vital step in laying the groundwork for foreign energy companies and other investors to begin exploring East Timor's onshore and offshore oil and gas reserves.

He flagged that East Timor will early next year launch a global roadshow to attract energy companies to commit to exploration in the areas in which it has exclusive jurisdiction, with licences to be given out shortly after.

These will exclude areas in the Timor Sea jointly claimed by Australia and East Timor.

China is already involved in a substantial onshore seismic program in East Timor, which the administration believes will lead to applications for new permits.

Woodside has said consistently that the so-called international unitisation agreement on Greater Sunrise is a matter for the Australian and East Timor governments.

Woodside's chief executive Don Voelte travelled to East Timor earlier this year to deliver the message to the country's leadership that the Sunrise partners could not keep the project mobilised indefinitely.

Shell has already withdrawn a technical team assessing the prospects for a floating LNG production facility. Woodside employees working on the project have been told they will be reassigned next year.

It is also expected this week that ConocoPhillips, one of the Greater Sunrise partners, will move in the US to have legal action brought by PetroTimor struck out.

PetroTimor has alleged breaches of US anti-racketeering laws in the handling of Timor Sea permits since it was awarded acreage by Portugal when it was the colonial power in East Timor.

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