Thu, 10 Mar 2005


Timor Sea boundary negotiations to continue

Road McGuirk, Associated Press, Canberra

The latest round of negotiations between Australia and East Timor on how to divide billions of dollars in revenues from sea bed oil and gas ended on Wednesday with an agreement to hold more talks soon, a negotiator said.

East Timor's head negotiator, Jose Teixeira, declined to comment on how the negotiations in the Australian capital, Canberra, had progressed over the past three days.

"We've agreed to further talks soon," Teixeira told The Associated Press.

Australian Prime Minister John Howard and his East Timorese counterpart, Mari Alkatiri, exchanged letters to ensure the negotiations could proceed, Teixeira said. He did not describe the details of the letters.

The agreement to continue talks on how to share energy resources in the Timor Sea, which separates one of the region's richest nations from one of its poorest, appears to be a positive development.

The negotiations broke down acrimoniously last October, with each side accusing the other of derailing a solution to the dispute over where their maritime boundary should lie.

At stake is an estimated US$30 billion in seabed oil and gas royalties.

East Timor wants the border to lie in the middle of the 600 kilometers (370 miles) of sea separating the two countries.

However, Australia wants the same boundary it set with Indonesia, which occupied East Timor in 1975-1999. In some places, that boundary is just 150 kilometers (90 miles) from East Timor's coast.

Australian officials said before the most recent talks that they would seek a "creative solution" that would enable the $5 billion Greater Sunrise gas field - the largest in the Timor Sea - to be tapped without the permanent boundary question being settled.

Woodside Petroleum Ltd., one of the companies hoping to pump oil and gas out of the region, shelved the Greater Sunrise project last year because the two countries had failed to broker a revenue-sharing deal.

Australia insists that any solution must provide Woodside and its partners with legal certainty to proceed and must postpone any agreement on a permanent maritime boundary for at least 50 years.

Postponing the boundary agreement is aimed at ensuring that it remains in place until the seabed energy reserves are exhausted. Australia would pay East Timor compensation for accepting those terms.

If East Timor wants to first settle the boundary, Australia has warned the negotiations will drag on for decades.

Teixeira declined to say whether negotiations were continuing toward a "creative solution."

"While negotiations are on going, I don't think I should create any further speculation about the talks," he said. "We're working through details in respect to each party's position."

Australia's agreement to continue negotiations soon suggests a creative solution remains on the table. Before the prospect of such a solution was raised, Canberra would only agree to hold negotiations every six months, while Dili wanted the rounds to be monthly.