The Australian

September 30, 2004 Thursday All-round First Edition

Unease at restart of Timor Sea talks

Nigel Wilson, Energy writer

MARITIME boundary talks between Australia and East Timor resumed in Darwin yesterday against a background of increasing concern in the new nation that the process is far too rushed.

But in Adelaide, Foreign Minister Alexander Downer said it was still his ambition to have the negotiations concluded by Christmas.

Woodside, the operator of the Greater Sunrise gas project in an area of the Timor Sea where Australia's jurisdiction is being challenged, has warned development will go on hold unless it has clarity on legal and fiscal arrangements by the end of the year.

As the talks began, a coalition of East Timorese non-government groups put out a statement urging Australia to respect East Timor's national sovereignty and negotiate as an equal partner.

The statement rejected "creative solutions" to the boundary dispute, maintaining that a permanent boundary should be based on current international legal principles along the median line between the two countries' coasts.

They also demanded Australia return to the international dispute resolution process for maritime boundaries of the International Court of Justice and the International Tribunal for the Law of the Sea from which Australia withdrew shortly before signing the Timor Sea treaty in May 2002.

East Timor president Xanana Gusmao said at the opening of East Timor's parliament in Dili last week that there were doubts relating to the meeting between Foreign Minister Jose Ramos Horta and Mr Downer in Canberra last month when they spoke of an "open window" and of "Christmas gifts".

There were questions concerning the need to speed up the process of boundary negotiations and whether concessions had already been made to the Australian Government on the maritime borders, Mr Gusmao said.

In an interview with the Portuguese newsagency Lusa earlier this week, Mr Ramos Horta warned that the secondary benefits of the Bayu Unda project in the Timor Sea went to Australia even though 90 per cent of the revenue went to East Timor.

He said that situation would have to be altered in other Timor Sea exploration areas.

"Any agreement will have to include downstream benefits to East Timor," Mr Ramos Horta was quoted as saying.

The Darwin talks are a continuation of negotiations that began last week in Canberra where it was reported that good progress had been made.

The Timor Sea's oil and gas reserves are estimated to be worth more than $42 billion and all three oil and gas fields, Bayu Unda Laminaria/Corallina and Greater Sunrise, are closer to East Timor than Australia.

Under an interim deal, East Timor will get 90 per cent of government revenue from the joint petroleum development area, including the ConocoPhillips-operated Bayu Unda field, but only 18 per cent of the proposed Sunrise development.