Australia, E. Timor agree on treaty

Australia, E. Timor agree on treaty

CANBERRA (AP): After almost a year of negotiations, Australia
and East Timor have agreed to the terms of a new treaty dividing
royalties from oil under the Timor Sea, Prime Minister John
Howard said Tuesday.

Howard said Foreign Minister Alexander Downer and Industry
Minister Nick Minchin reached agreement this week with
representatives from East Timor and the United Nations authority
administering the territory during its transition to
independence.

"There was an agreement concluded between Sen. Minchin and Mr.
Downer negotiating on behalf of the Commonwealth, and people
negotiating on behalf of the new emerging state of East Timor,"
Howard told reporters.

Howard said on Monday night he had given the go-ahead to
Downer and Minchin to travel to East Timor this week to formally
sign the treaty.

In East Timor's capital, Dili, Nobel Peace laureate Jose
Ramos-Horta, who acts as the territory's foreign minister,
welcomed the agreement and said the deal would guarantee the
tiny, nascent nation US$400 million a year from 2004.

"This was the best possible outcome for East Timor," he said.

Canberra and the U.N. Transitional Authority in East Timor
have been negotiating the treaty since October last year to
replace an earlier treaty between Australia and Indonesia that
divided up the royalties on a 50-50 split.

UNTAET and East Timor's new leadership have argued for a 90-10
split favoring the fledgling state, but Australia was initially
reluctant to be so generous.

According to an Australian official who spoke on condition of
anonymity, the breakthrough came with Canberra relenting to East
Timor's position during talks last Thursday. Both countries were
eager to have the treaty signed as the impasse was holding up
investment by oil companies.

The UNTAET and East Timorese negotiators have taken the draft
agreement back to Dili where it will be considered next Tuesday
by the transitional Cabinet.