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Subject: Critics blast Australia-Timor Leste gas deal


Critics blast Australia-Timor Leste gas deal

ISN SECURITY WATCH (02/12/2005) - Critics of a deal between Australia and Timor Leste on disputed undersea oil and gas reserves say Asia's poorest nation is giving away too much in exchange for too little.

"If the agreement turns out to be what was announced it is not a good tradeoff," Charlie Shiner (sic), an activist with the East Timor Action Network (ETAN) who works with Timorese non-governmental organizations on these and other issues, told ISN Security Watch. "Sovereignty is an important part of independence and East Timor needs to be more careful."

East Timor is the old name for Timor Leste.

On Thursday, Australian Foreign Minister Alexander Downer said the nations had settled a long-running dispute over disputed undersea oil and gas reserves. The deal potentially gives billions of dollars to one of the world's poorest countries.

No official details were released but Downer revealed that an agreement was expected to be announced in mid-January.

The apparent agreement over the disputed seabed, oil, and gas resources and the Greater Sunrise project came in the eighth round of talks held on Wednesday in the Australian city of Darwin between negotiators from both sides, Downer said.

The Greater Sunrise project holds some 8 trillion cubic feet of gas and nearly 300 million barrels of condensate. Some 20 per cent of the project lies in the Joint Petroleum Development Area and the rest in Australia's exclusive jurisdiction. Its stakeholders are Woodside Petroleum Ltd., ConocoPhillips, Royal Dutch/Shell, and Japan's Osaka Gas Co. Ltd.

Although no details of the deal were given, the negotiations were said to be progressing along the line that Timor Leste would give up its claim to the seabed boundary for 50 years in exchange for 90 per cent of royalties from the Joint Petroleum Development Area. Downer noted that with current energy prices near all-time highs, that could net Timor Leste as much as $14.5 billion over the next 20 years.

Critics such as Shiner noted that Australia has in the past announced several times that a deal on the dispute was imminent when, in fact, none was forthcoming.

Downer told Australian Parliament on Thursday the agreement would increase investor confidence in the region.

"This is a deal which is a good one for both Australia and East Timor," he said. "It safeguards Australia's sovereign interests, and it will provide investors with the certainty needed for large-scale resource projects to go ahead."

The biggest gainer in the deal is likely to be Woodside Petroleum Ltd., which last year suspended the $5 billion Greater Sunrise gas field because the two countries failed to strike a deal by its Christmas deadline. In a statement on its Web site, Woodside said it "welcomes" the deal, but noted it had "yet to see the agreement".

"The future of the Sunrise Gas Project remains dependent on several factors including the fiscal regime under which it would operate, the cost, and location of any development and the successful marketing of the resource," the statement said.

Later, however, the firm said it was selling a stake in four undeveloped natural gas fields off northern Australia to Eni SpA for $30 million. That money could allow work on the Sunrise project to resume.

The project would certainly help Timor Leste, one of the world's poorest countries. It achieved - after brutal violence by Indonesian-backed gangs - independence from Indonesia in 2002. More than 40 per cent of its 760,000 people live below the poverty line and some 50 per cent is illiterate.

But Skinner of ETAN said because of its size and poverty, Timor Leste had few choices other than to give in to the deal and was pressured by the oil companies and the Australian government.

He and other activists point out that just before East Timor became independent in 2002, Australia pulled out of the International Court of Justice's mechanisms that dealt with boundary disputes. That mechanism would have had final say on the dispute.

Australia said it wanted a 1970 agreement with Indonesia to remain in place. That deal gave most of the boundary and resources to Australia.

Current international law places the boundary at the mid-point between the two countries, giving the Timorese most of the territory and, consequently, the resources. But those laws are not applicable because Australia is no longer party to them. (By Krishnadev Calamur in Washington, DC)



Timor Sea Justice Campaign MEDIA RELEASE

For immediate release: Thursday, 1 December, 2005.


The Australian Foreign Minister, Alexander Downer, has told Parliament that officials had initiated a resource sharing agreement with East Timor that is expected to be signed at a ceremony in mid January.

The temporary resource sharing deal reportedly involves splitting royalties from the $40 billion Greater Sunrise gas field 50/50. This is up from the miserly 18 percent previously offered, but is still well short of East Timor's rightful entitlement, under current principles of International Law.

However, Timor Sea Justice Campaign co-ordinator, Tom Clarke, was skeptical about the Foreign Minister's announcement.

"We've heard a range of claims from Alexander Downer in the past, not many of which have come to fruition, so we'll see how this unfolds. Back in May, the Australian public were told that a deal with East Timor was imminent and yet every single day that has past, the theft of oil from the contested Laminaria Corallina fields has continued," Mr Clarke said.

Mr Clarke was also quick to point out that Alexander Downer promised a 'Christmas present' for East Timor last year as well.

"It's hardly in the 'Christmas spirit' to deprive the poorest country in Asia of billions of dollars and deny a sovereign state of the right to enjoy permanent maritime boundaries. Downer is sounding more like the 'Grinch who stole Christmas' to me," Mr Clarke said.

The Timor Sea Justice Campaign claims the Australian Government's greed and self-interest has resulted in a short-sighted arrangement.

"This deal is really just a band-aid solution for one particular gas field. If more petroleum resources are discovered tomorrow, it will be back to square one. Only permanent maritime boundaries will provide legal certainty to both governments and commercial interests. " Mr Clarke said.

The campaign is continuing to call for Alexander Downer to 'finish the job' by establishing permanent maritime boundaries with East Timor in accordance with International Law.

"The issues of boundaries are integral to the process of self-determination and achieving true independence, so until the East Timorese enjoy just and fair borders, their struggle will continue and their many supporters in Australia will be here to help," Mr Clarke said.

For more information or further comments, please contact:

Tom Clarke, Co-ordinator, Timor Sea Justice Campaign, Melbourne

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