Australian Lawmakers Expected To OK Timor Gas Deal

CANBERRA (AP)--Australian lawmakers moved closer Wednesday to passing legislation letting Australia and East Timor share a gas and oil field - a deal some lawmakers say shortchanges one of the world's poorest nations.

Under the deal, Australia would take about 80% and East Timor 20% of royalties from the Greater Sunrise field, which some analysts say could hold A$40 billion in gas and oil.

Some opposition lawmakers say that's unfair to the fledgling nation.

"What a terrible, terrible situation," Green Party leader Bob Brown said in Parliament.

"If I feel angry about it, how must the East Timorese feel?"

But the legislation appeared certain to pass after the opposition Labor Party Wednesday agreed to support it. Senators ran out of time for a vote, but one was expected Thursday.

The Australian government and newly independent East Timor struck the deal last year, based on a maritime border between them drawn in the 1970s by Australia and East Timor's former ruler, Indonesia.

That border placed 80% of Sunrise in Australia's hands and 20% in a joint development zone shared between Australia and Indonesia.

Now independent, East Timor disputes that border and has begun negotiating with Australia for a new one that delivers more of Sunrise - and more royalties. Its leaders agreed to the revenue sharing deal as a way of getting money quickly while drawn-out maritime border negotiations continue.

But the East Timorese Parliament has yet to ratify the deal.

East Timor's Prime Minister, Mari Alkatiri, has accused Australia of delaying border negotiations while continuing to issue mineral exploration licenses around Sunrise, and says Australia's continued claims to 80% of Sunrise "undermine prospects for its (the royalty deal's) approval."

Members of the U.S. Congress have also questioned the deal.

Democratic Congressman Barney Frank of Massachusetts, along with 53 colleagues, wrote to Australian Prime Minister John Howard, criticizing his government for failing to give a time frame to settle the boundary.

The U.S. lawmakers wrote: "Given the overlapping claims of the two countries, we would strongly hope that any revenue from disputed areas be held in escrow until a permanent boundary is established."

Australia's Parliament Wednesday rejected an amendment proposed by a minor party, the Australian Democrats, that would have forced the government to hold in trust any tax revenue from Sunrise until permanent boundaries are
determined.

Cabinet minister Eric Abetz defended Australia's plan to negotiate with East Timor on the new border once every six months.

Alkatiri, who maintains East Timor is entitled to all of Sunrise under international law, wants monthly meetings.

"While delaying on negotiations, Australia has issued new licenses in disputed areas near Sunrise and is continuing to derive revenues from other disputed parts of the Timor Sea," he said in a statement quoted in Parliament.

AAP

Tuesday March 23, 08:47 PM

Timor gas laws set to fire

Developers of the $10 billion Greater Sunrise oil and gas field are expected to overcome one of their last hurdles on Wednesday.

The Senate is poised to pass laws giving effect to an agreement between Australia and East Timor to develop and commercialise oil and gas resources in the Sunrise and Troubadour fields, collectively known as Greater Sunrise.

A caucus spokeswoman said Labor would support the expedited passage of the bill.

A Senate economics committee report examining the bill was tabled on Tuesday, but was not made available to the media due to printing problems.

Greater Sunrise is being developed by a joint venture between Woodside, ConocoPhillips, Shell and Osaka Gas.

The $7 billion project is expected to generate government revenues of $10 billion over the life of the project, with about 82 per cent going to Australia.

Current estimates are that 20.1 per cent of the resources lie in the joint petroleum development area and 79.9 per cent in Australian jurisdiction.

But East Timorese MPs and supporters have disputed the boundaries and called for further talks over a fairer distribution of revenue.

To date, the joint venture has spent $200 million on exploration, appraisal and concept development.

Woodside told the committee inquiry the joint venture could not progress the development of Greater Sunrise without the certainty provided by the laws.The Australian Democrats will propose an amendment to keep any revenue from
the fields in trust until maritime boundaries were resolved.

Democrats foreign affairs spokeswoman Natasha Stott Despoja said the government should not help itself to resources that potentially belonged to East Timor.

"For a nation which played such a crucial leadership role in assisting East Timor's transition to independence, it is tragic Australia is now treating our poorest neighbour so patronisingly and with such contempt," Senator Stott Despoja said.

Labor used the lower house debate to accuse oil companies and the government of trying to push the laws through parliament to put pressure on the East Timorese government over the seabed borders, but voted with the government.

-end-