Subject: Transcript: East Timor looks to Timor Gap oil for revenue

Australian Broadcasting Corporation PM News Monday, October 11, 1999 6:35

East Timor looks to Timor Gap oil for revenue

MARK COLVIN: And now to the economics of East Timor as an emerging independent state. The East Timorese have their sights set on oil and gas resources in the Timor Sea as a major source of revenue. Already, Fretilin Party, Dr Mari Alkatiri, is calling for the Timor Gap Treaty to be renegotiated.

Today he met Phillips Petroleum executives to reassure them that East Timor wants oil and gas development to continue in the zone of co-operation. And as Heather Stewart reports, Federal Resources Minister, Senator Nick Minchin, believes the East Timorese' interest in the Treaty is a positive sign.

HEATHER STEWART: The Timor Gap Treaty was signed in 1989, between Australia and Indonesia, leading to oil and gas exploration in the zone of co-operation. But the Treaty has long been a sore point with the Timorese, who claim it is illegal.

Fretilin Political Party Vice President, Dr Mari Alkatiri.

MARI ALKATIRI: It's still considered that the Treaty is illegal and we are willing to renegotiate everything with the Australian government as soon as East Timor becomes independent.

HEATHER STEWART: Today Dr Alkatiri met Phillips Petroleum executives to reassure them that while the East Timorese people want to see the Treaty renegotiated, they also want oil and gas exploration to continue in the zone.

Dr Alkatiri has told PM Xanana Gusmao and other East Timorese political leaders will meet in Darwin on Wednesday to discuss the Treaty and other issues in the lead up to the October 19th announcement from Jakarta. The reason - they don't want an independent East Timor to be caught out with no official line on certain issues.

MARI ALKATIRI: All of us don't want to have a vacuum, even for holidays a vacuum, for this. We, all of us would like for the project to keep going. This is the problem.

HEATHER STEWART: Jim Godlove (phonetic) is the Darwin Area Manager for Phillips Petroleum, which has a major interest in the zone of co-operation.

JIM GODLOVE: Phillips operations within the zone of co-operation have a legal basis in the Treaty. Consequently a continuation of the Treaty is fundamental to our ability to continue to progress existing production from the e-line (phonetic) Kakatu oil field and progress development of the much larger Biundan (phonetic) gas field.

So, it is fundamental that the Treaty and the commercial and fiscal terms under the Treaty and the administrative functions, the joint authority if you will authorised by the Treaty, continue into the future.

HEATHER STEWART: Mr Godlove says the company has an expectation operations will continue when the Treaty is renegotiated with East Timor.

JIM GODLOVE: Petroleum development under the terms of the Treaty will have very significant benefits to East Timor and Australia into the future. I think that that fact will be recognised by those involved in any future negotiations on the Treaty, and consequently they will want to assure that those critical terms are maintained.

So long as that happens, we would not be unnecessarily concerned that those changes would adversely affect our project.

HEATHER STEWART: And Federal Resources Senator, Nick Minchin, believes the East Timorese political leaders' early interests in the Treaty is a positive sign.

NICK MINCHIN: Well, we've very encouraged by the statements of Ramos-Horta saying that East Timor would honour the Treaty. We're very encouraged that East Timorese leaders are going out of their way to reassure the companies involved of the ... you know, that there will be a certain and secure investment environment. That's very important for the future of East Timor so we welcome those positions.

MARK COLVIN: The Federal Resources Minister, Senator Nick Minchin, speaking to Heather Stewart.

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