Sub-sea resources vital for E. Timor<\/p>\n
SYDNEY (AP): Locked beneath the narrow strip of sea separating
\nAustralia and its island neighbor Timor is enough oil and gas to
\nfuel a small nation.<\/p>\n
If East Timor, the disputed territory covering half of the
\nisland, breaks away from Indonesia and becomes a new nation, as
\nexpected sometime next year, its political leaders will be
\nlooking to do just that.<\/p>\n
Securing peace in the territory, which has been wracked by
\nviolence between separatists and the Indonesian military for 23
\nyears of often brutal rule, and more recently by pro-
\nintegrationist militias, is one essential element to establishing
\na new nation.<\/p>\n
Building national fortunes from what is now a small agrarian
\neconomy dominated by commerce and government infrastructure from
\nthe faraway Indonesian capital of Jakarta is another essential
\nelement.<\/p>\n
Royalties from exploitation of the resource rich Bonaparte
\nBasin in the Timor Sea will be crucial, even if substantial
\nroyalty revenue is up to a decade away, analysts say.<\/p>\n
First, East Timorese must vote against an Indonesian offer of
\ngreater autonomy at a UN-sponsored ballot scheduled for Aug. 8.
\nCurrent President B.J. Habibie says Indonesia will let East Timor
\ngo if the offer is rejected<\/p>\n
Independent East Timor will depend on oil and aid.<\/p>\n
\"East Timor will have a heavy dependence on oil revenues and
\nforeign aid,\" immediately after the UN ballot, if it chooses
\nindependence, said Dr. Michael van Langenberg of Sydney
\nUniversity's School of Southeast Asian Studies.<\/p>\n
But East Timor is excluded from the complex treaty which
\nassigns exploration and exploitation rights to the Timor Gap, a
\nhole in the territorial waters boundary between Australia and
\nTimor.<\/p>\n
The Timor Gap treaty was signed in 1989 after more than two
\ndecades of negotiations, made possible only by Australia's
\ncontroversial 1976 decision to recognize Indonesian sovereignty
\nover East Timor.<\/p>\n
Despite being incomplete - it covers only oil and not gas,
\nwhich is increasingly being found - resources companies welcomed
\nthe treaty and exploration has boomed.<\/p>\n
Current production is small, but Australian officials say the
\nregion is one of the richest new hydrocarbon provinces outside
\nthe Middle East.<\/p>\n
Capital expenditure on the region has reached some A$3.3
\nbillion. One company estimates revenues will eventually reach
\nUS$11 billion.<\/p>\n
The boundaries under the treaty form a coffin-shaped zone
\nwhich divides administration and ownership among no fewer than
\nfour national and state governments.<\/p>\n
The northern part is administered by Indonesia, with Australia
\nholding rights to 10 percent of royalties on any oil found. The
\nsouthern part is administered by two Australian state
\ngovernments, and Indonesia has 10 percent royalty rights.<\/p>\n
In between is the 23,552-square mile Zone of Cooperation, or
\nZOCA, administered jointly by Australia and Indonesia, where
\nroyalties on anything found are split 50-50.<\/p>\n
Phillips Petroleum Co., based in Bartlesville, Oklahoma,
\ncurrently pumps 33,000 barrels a day from its Elang, Kakatua and
\nKakatua North oil fields and owns the rights to exploit other
\nfields in the Australian zone and the ZOCA, including the Bayu-
\nUndan gas field, which is due to be in production by early 2003.<\/p>\n
Australian company Woodside Petroleum Ltd. expects its A$1.37
\nbillion Laminaria-Corallina oil project to be producing by the
\nend of 1999, said corporate affairs manager Geoff Wedgwood.<\/p>\n
At least seven other finds have been made.<\/p>\n
The foreign ministers of Indonesia and Australia have agreed
\nthat at least some aspects of the treaty will have to be
\nrenegotiated if East Timor becomes independent, a prospect which
\nworries companies with interests in the region as creating
\npotential uncertainty.<\/p>\n
Jailed resistance leader Jose Alexandre Gusmao and Nobel
\nlaureate Jose Ramos Horta, expected to be key players in any new
\nEast Timorese government, want East Timor to replace Indonesia as
\nsignatory to the treaty.<\/p>\n
\"If East Timor becomes independent, Indonesia ceases to be the
\nother signatory. Timor would have to be signatory, without
\nchanging the content of the treaty,\" Ramos Horta said earlier
\nthis year.<\/p>\n
Analysts say it may be ten years before royalties are enough
\nto contribute significantly to the economy of an independent East
\nTimor.<\/p>\n
\"The Timor Gap treaty will have no impact for probably a
\ndecade,\" said Scott Burchill, senior lecturer in international
\nrelations at Deakin University. \"But it will play a major role in
\nEast Timor's economic development when it comes on stream.\"<\/p>\n
If it becomes independent, East Timor will face an urgent need
\nto replace commerce and infrastructure currently funded by the
\nIndonesian government, van Langenberg said.<\/p>\n
In addition to an estimated US$150 million a year from
\nJakarta, East Timor's industries are coffee, sugarcane,
\nsandalwood and other timber. Marble is also cut from the
\nhillsides.<\/p>\n
Dissident academic George Aditjondro says these industries are
\ncurrently dominated by family or friends of former authoritarian
\npresident Soeharto, with little return to East Timor.<\/p>\n
A newly independent East Timor must take control of these
\nindustries and royalties from resources in the Timor Sea to avoid
\ncomplete dependence on foreign aid, van Langenberg said.<\/p>\n
Australia, Brazil, former colonial power Portugal and others
\nhave pledged aid if East Timor undertakes the transition to
\nindependence.<\/p>\n
Burchill said the amount of aid will depend on Indonesia, and
\nwill skyrocket if Indonesia adopts a \"scorched earth\" policy of
\nwithdrawal, Burchill said.<\/p>\n
\"The issue of independence for East Timor is a matter of
\ninternational law and resolution between governments,\" said
\nWedgwood.<\/p>\n
\"But if there is no logical and consistent regime in place
\npeople will be reluctant to spend large amounts of money in the
\nregion.\"<\/p>",
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