Australia denies Timor oil treaty revoked by RI

Australia denies Timor oil treaty revoked by RI

CANBERRA, Australia (AFP): Indonesia's suspension of naval exercises off East Timor did not amount to a suspension of the Timor Gap oil treaty with Australia, Foreign Minister Alexander Downer said Thursday.

The oil-rich Timor Gap lies off East Timor's south coast. Under the treaty Australia and Indonesia share oil revenue from the Timor Sea.

Reports from Jakarta this week said Indonesia had frozen the Timor Gap treaty because of a serious downturn in relations between the two countries over East Timor.

But Downer insisted the treaty between Indonesia and Australia was still valid.

"Indonesia has not suspended or frozen the Timor Gap Treaty," he told parliament.

The suspension of naval exercises and patrols by Indonesia in the zone had absolutely no link to the Timor Gap Treaty, Downer said.

"The activities under the Timor Gap Treaty are exploration for and production of petroleum resources. And those activities are still continuing and will continue even when East Timor separates from Indonesia."

Downer said the Australian government was now developing a transitional strategy for the shift of sovereignty over the gap from Indonesia to East Timor.

Australian officials said this week they had begun talks with East Timorese leaders over the Timor Gap treaty.

An Australian-led multinational security force is now working to restore stability in the territory ravaged by an Indonesian- backed terror campaign since it opted for independence in its August 30 ballot.

Australia's leading of the force and its criticism of human rights abuses in the territory have prompted fierce accusations of betrayal in Indonesia and Foreign Minister Ali Alatas has dubbed relations between the two countries as being at an all- time low.

Resistance leader Xanana Gusmao, who announced Thursday he would be returning to East Timor next week, told businessmen in Melbourne on Monday that oil would be among its major exports when it becomes independent.

The Indonesian government said on September 7 that it was fully prepared to cancel the treaty signed in 1989 with Australia over oil and gas extraction rights in the sea between Timor and Australia.

"That treaty was between the government of Indonesia and Australia, but because East Timor will in the future no longer be Indonesian territory, for legal reasons, that treaty can no longer be implemented," Mines and Energy Minister Kuntoro Mangkusubroto said.

The area in the Timor Sea covered by the treaty is believed to hold hydrocarbon reserves worth some US$8billion but only around $1.1 million worth of oil and gas was drawn from it last year.