Australia ready to concede ground on Timor oil treaty
Australia ready to concede ground on Timor oil treaty
CANBERRA (AP): Australia said Monday it is willing to make significant concessions to reach an agreement with East Timor on sharing royalties from the Timor Sea oil fields.
The petroleum and gas reserves in the Timor Sea between Australia and East Timor were originally carved up under a treaty Canberra negotiated with Indonesia in the 1980s and early 1990s.
Indonesia gave up its place in the treaty after East Timor voted for independence in 1999.
The United Nations Transitional Authority in East Timor (UNTAET) is negotiating a new treaty with Australia on behalf of the fledgling nation.
Oil and natural gas are expected to develop into an important source of income for cash-strapped East Timor along with coffee exports and, in the future, tourism.
UNTAET and East Timorese leaders believe the original treaty, which split royalties equally, was biased in favor of Australia.
The treaty was based on Australia's continental shelf, which extends well into the Timor Sea area.
UNTAET maintains that under international law a line should be drawn halfway between East Timor and Australia in carving up the reserves. Some analysts believe this could give East Timor up to 90 percent of revenue.
Australia had said it would not budge from the earlier division of revenue. But following the latest round of negotiations in Melbourne last week, the government has signaled it will give more ground.
"We've indicated that we are prepared to move well away from the current 50-50 split in favor of East Timor," Industry Minister Nick Minchin said Monday at an oil and gas conference in Hobart.
Minchin said he hoped East Timor understood there was a need for urgency in signing a treaty.
"There is a sense of urgency about this given the substantial prospective investments and the billion dollar decisions that need to be made very soon. I think the next couple of months are critical," he said.
UNTAET's representative at the negotiations, Peter Galbraith, indicated negotiations were not going well.
"I would like to be able to stand before you and declare the Timor Sea is open for business, unfortunately at the moment I am unable to do so and I cannot say when it will be open for business," he said.
Galbraith said UNTAET was still aiming to divide sovereignty over the fields on an equal basis.