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Company disputes Timor Sea oil rights

[This is the print version of story
http://www.abc.net.au/am/content/2004/s1057642.htm]

AM - Wednesday, 3 March , 2004 08:10:23 Reporter: Anne Barker

TONY EASTLEY: A United-States oil company has launched a multi-billion dollar lawsuit against Australia, Indonesia and the oil giant, Conoco Phillips, alleging they robbed the company of its right to develop the vast oil and gas reserves in the Timor Sea.

Oceanic Exploration claims its subsidiary, PetroTimor, was given exclusive rights by Portugal to develop the reserves before Indonesia invaded East Timor.

In court documents lodged in Washington, Oceanic claims it was illegally deprived of its rights and it wants up to $30-billion in compensation.

Anne Barker reports.

ANNE BARKER: Oceanic's 100 page statement of claim, lodged in a district court in Washington, makes extraordinary allegations of theft, bribery and corruption.

Virtually on page one it sums up the magnitude of the case involved.

EXCERPT FROM STATEMENT OF CLAIM: This lawsuit is about the theft of one of the world's major hydrocarbon reserves, valued at over US $50-billion. The defendant's efforts take place over a 30-year period, as Australia, Indonesia and Conoco Phillips, stole plaintiff's oil and natural gas rights granted to it by Portugal.

ANNE BARKER: Oceanic claims an agreement with Portugal in 1974 gave its subsidiary, PetroTimor, the sole concession to develop the Timor Sea.

Local staff had spent years gathering seismic information and mapping the ocean floor.

But in the years after Indonesia invaded East Timor, Oceanic alleges that Conoco Phillips conspired with the Indonesian and Australian Governments to seize control of the oil fields.

EXCERPT FROM STATEMENT OF CLAIM: Conoco Phillips had been paying bribes to Suharto and his cronies for at least 20 years. As a result of these payments, Indonesia gave Conoco Phillips Timor Sea exploration data stolen from Oceanic and PetroTimor during Indonesia's invasion of East Timor. Conoco Phillips used this data to seek to secure the lion's share of exploration rights for the most promising of the geographical blocks in the Timor Sea.

ANNE BARKER: East Timor's Prime Minister too, Mari Alkatiri, was allegedly bribed, with cash payments of at least US $2.5-million.

The court documents even give details of his ANZ bank account in Darwin where the money was allegedly held.

And Australia, it's alleged, conspired to deprive Oceanic of its exploration rights by supporting East Timor's invasion, and later bullying
an independent East Timor for the biggest share of the oil fields.

EXCERPT FROM STATEMENT OF CLAIM: Certain politicians in Australia, since at least the late 60s, coveted the Timor Sea oil and natural gas fields. They first sought, unsuccessfully, to negotiate with Portugal to stake out a claim. Australia, seeing an opportunity to negotiate more favourably with Indonesia at the expense of East Timor, remained publicly silent, but behind the scenes encouraged Indonesia to seize East Timor.

ANNE BARKER: Oceanic lost a separate case against Australia in the Federal Court last year.

The US case is lodged under the RICO Act, or Racketeer Influenced and Corrupt Organisations Act, and to succeed it must prove the two governments and the oil giant engaged in a pattern of corrupt behaviour over many years.

Conoco Phillips has refused to comment on the case.

The Office of Foreign Minister Alexander Downer has described the allegations as fanciful.

TONY EASTLEY: Anne Barker reporting from Darwin.

© 2003 Australian Broadcasting Corporation

Oceanic is seeking compensation of at least $US10 billion.
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Wednesday March 3, 06:14 PM

E Timor PM denies bribery accusation

East Timor's Prime Minister Mari Alkatiri has denied he accepted bribes to secure the exploration interests of oil giant ConocoPhillips in the Timor Sea.

A US oil company has made the allegation in a lawsuit against ConocoPhillips and the Australian and Indonesian governments.

Oceanic Exploration has lodged court documents in Washington alleging that ConocoPhillips bribed Indonesian and East Timorese officials to secure a stake in the Timor Sea.

It alleges that Portugal granted Oceanic the development rights in 1974 but Australia, Indonesia and ConocoPhillips conspired to steal the concession after Indonesia invaded East Timor.

Oceanic alleges ConocoPhillips paid Mr Alkatiri more $US2 million.

His office in Dili says the Prime Minister rejects the allegations as vexatious.