Subject: Woodside expects E Timor to buckle over gas field

also Timor 'can't dump' gas pact

ABC News

May 7, 2010

Woodside expects E Timor to buckle over gas field

By Jane Bardon

Woodside says it expects the East Timorese people will force their Government to overturn a decision to block Woodside processing gas from the Greater Sunrise field on a floating platform.

Both East Timor and the Northern Territory had hoped to persuade Woodside to establish an onshore site in their jurisdictions.

Woodside chief executive, Don Voelte, says the offshore plan will still be worth $13 billion each to East Timor and Australia.

He does not think the East Timorese Government will carry out its threat to break an international treaty to block the plan.

"A treaty that was very defined, not done under duress, and done with much due dilligence and they're walking away from it now? I dont think that's going to work."

The Territory Chief Minister, Paul Henderson, says other companies are likely to follow Woodside's decision to build its processing plant offshore, instead of on the Australian mainland.

Mr Henderson says the Territory and other mainland jurisdictions have to accept that it is cheaper to process offshore in many cases.

"We are going to see more and more of these remote fields processed offshore, that's the reality of where technology is heading," he said.

"But there is an upside to this as well: there are many discovered fields to the north of Darwin that are too small on their own to support bringing offshore platforms and pipelines to Darwin."

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The Age

Timor 'can't dump' gas pact

LINDSAY MURDOCH, DARWIN

May 8, 2010

WOODSIDE chief executive Don Voelte has hit back at threats by East Timorese leaders to veto the multibillion-dollar Greater Sunrise joint venture in the Timor Sea, saying, ''Believe me, they can't walk away from it.''

Speaking a day after East Timorese Prime Minister Xanana Gusmao refused to meet him and other representatives of the venture consortium in Dili, Mr Voelte said East Timor's credibility would be damaged if it reneged on a treaty signed only 2½ years ago.

''But that is not the issue - we will win it on the merits of the program,'' he told journalists in Darwin.

Mr Voelte said that under the treaty East Timor and Australia did not have a legal right to veto. ''They are required to approve the project as long as they come to a conclusion it is the right option on a commercial basis using good industry practice.''

East Timor's leaders last week reacted angrily to an announcement that the consortium would build one of the world's first floating liquefied natural gas platforms above the field.

They repeatedly have demanded the gas be piped to a processing plant in East Timor and said they would not approve a floating platform or piping the gas to an existing plant in Darwin, another option considered by the consortium.

Mr Voelte denied an accusation by the regulator of East Timor's petroleum industry that Woodside had failed to comply with its legal obligations before announcing its plans for a floating platform.

The Age revealed yesterday that the independent National Petroleum Authority had criticised Woodside in a confidential letter for failing to provide detailed reports and findings on all three development options for the field before deciding on the floating platform.

''Absolutely false and wrong,'' Mr Voelte said when asked about the authority's accusations. ''We have followed every one of our legal commitments … we have great legal advice that we have followed and we will not make a mistake in that regard.''

Mr Voelte said that next week Woodside would send to the regulator, as it was obliged to do, a ''big, thick'' comprehensive field development plan.

He said East Timor had done its own surveys and if there were disagreements about the project ''we are happy to sit down with them and come to the truth''.

Mr Voelte said the floating platform would maximise benefits to East Timor and Australia, ''which we believe is worth over $13 billion to each country''.

He said it was a ''country-building project'' for East Timor. ''I think when we give them all the details and the transparency they are going to have a very difficult time … vetoing the project.''

Mr Voelte said Woodside was not looking for a fight with East Timor.

Asked about Mr Gusmao's refusal to meet him in Dili, he said it would be hard for the Prime Minister to ''hold that position''.

''Positions change,'' he said.


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