| Subject: E
Timor May Begin Getting Oil Royalties In A Few Weeks
Associated Press November 29, 1999 E Timor May Begin Getting Oil Royalties In A Few Wks JAKARTA (AP)--Devastated and impoverished East Timor could start receiving royalties from the Timor Gap undersea oil and gas field within a few weeks even though the territory's independence movement Monday declared as illegal a treaty covering production there. The field lies between East Timor and northern Australia. Until now, royalties from its fledgling production were divided between Indonesia and Australia under a controversial 1989 treaty. East Timor is expected to assume Indonesia's revenues, currently a few million dollars a year, now that it has broken away from Indonesia following an Aug. 30 independence vote. However, a senior East Timorese independence movement official indicated the treaty might have to be reworked. Mari Alkatiri, a vice-president of the National Council of East Timorese Resistance, said transitional arrangements - possibly a trust fund - should be set up quickly so that petroleum companies can pay the half-island territory, which is in desperate need of cash to fund reconstruction after the turmoil and violence that followed the independence ballot. He said petroleum companies now operating in the Timor Gap area must be allowed to keep working. Timor Gap Treaty Considered As Illegal Alkatiri cast doubt over the future of the 10-year-old Timor Gap Treaty and on suggestions that East Timor would automatically take over Indonesia's role as laid out in the pact. He said East Timor's independence movement has been discussing "a way out" of the treaty in talks with the United Nations, which is currently administering the territory, along with Portugal, its former colonial master, and Australia. "We still consider the Timor Gap Treaty as an illegal one. And no one state can succeed to an illegal treaty. This is a point of principle," he told reporters. "We aren't going to be a simple succession state for the treaty." Oil and gas are expected to develop into an important source of income for East Timor along with coffee exports and, in the future, tourism. Although current production is small, some Australian officials say the region could become one of the richest new hydrocarbon areas outside the Middle East. An estimated $2.1 billion has been spent to explore and tap its reserves so far. The boundaries under the treaty form a zone that divides administration and ownership. The northern part has been administered by Indonesia, with Australia holding rights to 10% of royalties on any oil found. The southern part is administered by two Australian state governments, with Indonesia having 10% royalty rights. In between is a 61,000-square-kilometer "zone of cooperation" administered jointly by Australia and Indonesia, where royalties on any oil found are split 50:50. Phillips Petroleum Co. (P), based in Bartlesville, Oklahoma, currently pumps 33,000 barrels of oil a day. The Australian company Woodside Petroleum Ltd. (A.WPL) expects its $890 million oil project to come on-line by the end of this year. Back to November Menu Note: For those who would like to fax "the powers that be" - CallCenter V3.5.8, is a Native 32-bit Voice Telephony software application integrated with fax and data communications... and it's free of charge! Download from http://www.v3inc.com/ |