Subject: AKI: New govt. 'inexperienced' for talks with Australia says ex-PM


3 September 2007

East Timor: New govt. 'inexperienced' for talks with Australia says ex-PM

Dili - East Timor's former prime minister Mari Alkatiri, has said that the country's new government does not have the experience needed to carry out negotiations with Australia over lucrative energy reserves in the Timor Sea.

East Timor and Australia will soon begin discussions on where to construct a natural gas plant needed to jointly exploit the energy fields that lie between the two countries.

"This government does not have experience and I doubt it will get it [the pipeline]," Alkatiri told Adnkronos International (AKI) referring to the gas pipeline that will bring the natural gas supplies to East Timor.

The gas fields in question are the highly lucrative Greater Sunrise field, which lies beneath the Timor Sea.

The fields have been contested by both Dili and Canberra for many years but the two sides recently agreed to jointly exploit the gasfield and to equally share the revenues, estimated at about 20 billion dollars over the next 20 years.

The agreement, however only looks the 'upstream' procedure - the operations to explore and extract the gas and petrol in the fields.

Alkatiri, the leader of the Fretilin party, the biggest party in the country and the former ruling party, is considered to be the main player behind East Timor's gains in the negotiations with Australia.

Fretilin won the most seats in East Timor's elections in June, but was excluded from government after former resistance leader Xanana Gusmao formed a majority coalition and was named prime minister.

It will now be up to the new government led by Xanana Gusmao, to negotiate with Canberra regarding the 'downstream' contracts, which refer to the transport and the transformation of the gas to liquid as well as refining the natural gas.

Some experts have said that it is of vital importance for the development of East Timor that the natural gas plant be constructed in East Timor.

East Timor is today among the poorest countries in Asia.

However other observers have said that the continuing political and social instability in the country makes the former Portuguese colony a risky destination for major investments.

There were outbreaks of violence in East Timor following the June elections.

The decision of where to construct this industrial plant will be made by the energy consortium that controls Greater Sunrise. The Australian company, Woodside, controls the majority stake in the consortium with 33.4 percent of the operation.

The other partners include ConocoPhillips with 30 percent, Royal Dutch Shell PLC with 26.6 percent and Osaka Gas Co. with 10 percent.

The decision by the consortium will however have to be accepted by the Timor Sea Designated Authority (TSDA), a body that includes representatives of the two countries and the institute which administers the jointly exploited gasfields.

The TSDA has the power to veto any decision made by the consortium which means that Woodside and its partners need the political support of both governments.

The talks between the two countries are due to begin soon.

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