Australia, East Timor may split Sunrise gas revenues: Ramos-Horta
Australia, East Timor may split Sunrise gas revenues: Ramos-Horta
Bloomberg, Sydney
Australia and East Timor would share equally royalties from Woodside Petroleum Ltd.'s proposed S$3.7 billion Sunrise natural gas project under a draft accord reached this month, said Jose Ramos-Horta, East Timor's foreign minister.
The proposed agreement could provide more than $7 billion in revenue to East Timor, Ramos-Horta said today in an opinion article in the Age newspaper. The accord includes a 50-year moratorium on conflicting claims by Australia and East Timor on maritime boundaries, he said.
East Timor, or Timor-Leste, broke away from Indonesia in May 2002 after a 24-year armed struggle. It started talks in April 2004 with Australia in a bid to set its permanent boundary at a mid-point between the two countries, which would place all of ConocoPhillips's Bayu-Undan gas field, the Sunrise, Laminaria and Corallina fields under East Timor's jurisdiction.
The issue of whether gas from the Sunrise field will be processed in Australia or East Timor still has to be resolved with Woodside, the operator of the project, Ramos-Horta said. East Timor is "much closer" to the field and to liquefied natural gas buyers in Asia than Australia, while labor costs are lower in East Timor, he said.
Woodside halted work on the proposed Sunrise project on Dec. 31 in the absence of an agreement between Australia and East Timor over revenue-sharing and the administration of the field. Australian Foreign Minister Alexander Downer said May 13 the countries were "on the threshold" of an agreement.
Ramos-Horta said today in the Age that he asked Downer to consider job-creation plans for East Timorese. The Australian government should also consider a separate program on water, land and forest preservation in East Timor, in which it is "not unreasonable" to expect Woodside to participate, he said.
The draft agreement, which is "the fairest agreement possible with respect to the Greater Sunrise area," is yet to be discussed by the East Timorese and Australian cabinets, Ramos- Horta said.
The revenue from Sunrise would be in addition to East Timor's 90 percent share of royalties from an area of the Timor Sea that is jointly administered by Australia and East Timor, Downer said today in Parliament.
"This has the potential to be a very good mutually beneficial agreement," Downer said.