1. Timor (2 x 23)
1. Timor (2 x 23)
East Timor faces tough talks
on boundary, oil and gas
JP/16/Timor
Dow Jones
Canberra
East Timor, the world's newest nation, will have trouble
settling its disputed maritime boundaries with Australia, Stephen
Sherlock, an analyst at the Australian Parliament library, said
Thursday.
At stake are potentially huge royalties from energy production
in the area.
East Timor wants to settle the issue in such a way as to
increase potential revenue from the development of oil and gas
resources in the Timor Sea, between the two nations, but it isn't
in a very good bargaining position.
"Actually they don't really have any leverage to make
Australia come to the negotiating table," he said in an interview
on Australian Broadcasting Corp. radio.
If Australia says it doesn't want to negotiate new boundaries,
then the only way for East Timor to bring Australia to the table
is by applying enough domestic or international pressure to do
so, he said.
East Timor could theoretically line up with Indonesia on the
issue and seek joint talks on the issue, but "there's no sign
that Dili and Jakarta are getting together or even that there's
any serious discussion in either capital about it."
"It's something that may happen in the future but there's no
sign of it actually happening" now, he said.
"Since the issue potentially involves major economic assets,
the success of future trilateral relations between East Timor,
Indonesia and Australia may depend on a final resolution," he
said in a research paper issued by the library.
East Timor came into existence May 20, and immediately signed
the Timor Sea Treaty with Australia.
The treaty is the fundamental document setting out how the
economic benefits of energy developments in a Joint Petroleum
Development Area in the Timor Sea are shared between the two.
The treaty, which hasn't yet been ratified, was established
without prejudice to the setting of maritime boundaries between
the two nations.
East Timor didn't establish maritime boundaries with Australia
or any other nation and it didn't inherit any boundaries that
existed prior to May 20.
Sherlock said East Timor agreed to put aside the seabed
boundary issue because it didn't want to jeopardize a possible
flow of revenue that likely will come from energy production in
the Joint petroleum Development Area in the next several years,
namely the Bayu-Undan project, operated by Phillips Petroleum Co.
First stage of Bayu-Undan, to strip condensate and liquefied
petroleum gas from wet natural gas and reinject the dry gas into
the offshore reservoir, is scheduled to begin production early in
2004.
Australia refused to agree to a new seabed boundary and new
talks on the matter might have stalled investment in energy
exploration and production in the area, he said.
In June, Prime Minister Mari Alkatiri said East Timor will
make its claim for the maritime boundary with Australia "under
international law."
East Timor previously has said it wants the boundary set at
the midpoint between the two nations.
2. Pipe ( 4 x 10)
China signs
deal for
US$8.5b
pipeline
JP/16/Pipe
Deal signed for US$8.5b China gas pipeline
Agence France-Presse
Hong Kong
Chinese energy giant PetroChina Co, has signed a framework
agreement with an international consortium led by Dutch/Shell
Group to build an US$8.5 billion east-west gas pipeline, it
announced Thursday.
Company vice president Wang Fucheng told a press conference
that Petrochina would hold a 50 percent stake in the 4,000-
kilometer (2,500-mile) pipeline.
Shell, along with consortium partners ExxonMobil of the United
States and Russia's OAO Gazprom, will each have a 15 percent
interest.
The remaining five percent will be held by Chinese oil firm
Sinopec.
The pipeline will cost $5.2 billion to build, with the
remaining $3.3 billion spent on operating costs.
Two junior partners were also named, the Hong Kong-listed
China Light Power and Hong Kong China Gas Co., although no
details were given as to the nature of their involvement.
The ambitious project, one of the largest of its kind ever in
China, will bring natural gas from the Tarim Basin in the
country's northwestern Xinjiang region to bustling and energy-
hungry Shanghai in the east.
Construction of the pipeline has been delayed for several
months because of the prolonged negotiations between PetroChina,
one of China's main state-controlled oil and petrochemicals
groups, and the consortium.
The terms of ExxonMobil's involvement was only announced on
Monday, although it had been known the U.S. firm wanted to take
part ever since the Shell-led consortium agreed to the 45-percent
stake late last year.
At the news conference, Wang said about 35 percent of the
total project investment would be equity financed by the
consortium partners, with the rest financed using debt.
PetroChina's investment in the whole project will amount to
$2.7 billion and the company had still to decide how this would
be financed, Wang said.
The company did not rule out the possibility of an issue on
China's yuan-denominated A-share market, he added.
The pipeline project has attracted criticism from human rights
groups, who say the non-ethnic Chinese inhabitants of Muslim-
majority Xinjiang are unlikely to see any benefits.
On Wednesday the London-based Free Tibet Campaign -- the
pipeline will also run through Qinghai province, formerly part of
Tibet -- said the project was "unlikely to be in the interests"
of local people.
3. Korea (1 x 21)
Bank raises S.Korea growth forecast
JP/16/Korea
South Korean central bank raises GDP growth forcast to 6.5 percent
Agence France-Presse
Seoul
South Korea's central Bank of Korea (BoK) on Thursday raised
its 2002 economic growth forcast to 6.5 percent, saying the
economy would see a full recovery in the second half.
BoK governor Park Seung said the expansion would be spurred by
solid domestic consumption and recovering exports and investment.
"Exports and capital investments will recover in real terms in
the second half, becoming the main engines for the fully-fledged
economic recovery in the second half," he said.
"This year's economic growth is expected to stand at 6.5
percent," the governor said, adding gross domestic product (GDP)
is forecast to grow 6.1 percent in the first half and 6.8 percent
in the second half.
The new forecast is higher than the BoK's projection of 5.7
percent in April and the government's revised forecast of 6.0
percent.
4. World ( 1 x 21)
Judge sets trial date for WorldCom
JP/16/World
WorldCom faces March trial for securities fraud
Gail Appleson
Reuters
New York
A federal judge set a March trial date on Wednesday for
scandal-plagued telecommunications group WorldCom Inc. on alleged
securities fraud and named a former top regulator to oversee that
no key documents are shredded and no excessive payouts are made
to top officers.
U.S. District Judge Jed Rakoff set March 31 as the tentative
date for the Securities and Exchange Commission to begin
presenting its case accusing the Clinton, Mississippi-based
WorldCom of violating securities laws by covering up $1.22
billion in losses by improperly booking $3.85 billion in
expenses.
The SEC is seeking unspecified monetary penalties and to bar
the company from violating securities laws again.
Rakoff also appointed Richard Breeden, a former head of the
Securities and Exchange Commission, to ensure no documents are
destroyed by the company and that no payments that exceed
$100,000 are made to current or former executives.
"I want a hands-on monitor who will report to me what's going
on," Rakoff said, adding that Breeden will be free to "look into
every nook and cranny to fulfill his function."
Breeden's appointment follows allegations that bankrupt energy
trader Enron Corp.'s auditor, Andersen, and telecommunications
provider Global Crossing Ltd. shredded documents that could have
shed light on the companies' accounting methods. Enron also
awarded bonuses to key staffers as the energy company's problems
deepened.
A WorldCom spokeswoman declined to comment on the judge's
move.
WorldCom's Chief Executive John Sidgmore on Tuesday tried to
allay fears on Wall Street that the company would file for
bankruptcy protection or break up its core assets, but he made
clear that its position was dependent on negotiations for new
credit lines.
"This (bankruptcy) is not our preferred path," he told
reporters during a 45 minute grilling by 100-plus reporters on
Tuesday. "And I think, fundamentally, the real issue hinges on
what the banks do right now."
Despite its woes, the company staved off a delisting of its
two tracking stocks that was set for Friday by appealing Nasdaq's
claim that WorldCom no longer met the requirements.