Australia slammed for Timor gas deal

Australia slammed for Timor gas deal

Agencies Sydney, Australia

Canberra was accused on Monday of robbing East Timor of billions of dollars after parliament signed off on a controversial treaty with the impoverished nation covering oil and gas reserves in the Timor Sea.

Parliament passed legislation on Monday allowing Australia and East Timor to share revenue from a Timor Sea gas and oil field in a deal that a Greens lawmaker said robs one of the world's poorest nations of vital revenue.

Australia would take about 80 percent and East Timor 20 percent of royalties from the Greater Sunrise field, which some analysts say could hold A$40 billion Australian (US$30 billion) in gas and oil.

The treaty relates to development of resources in the Greater Sunrise field, valued at A$7.0 billion ($5.2 billion), by world energy giants Woodside, ConocoPhillips, Shell and Osaka Gas.

It is expected to generate revenue of A$10 billion over its three- to four-decade life and will create at least 3,000 jobs during construction.

But the Australian government has come under fire from Dili and left wing politicians at home because the treaty gives Canberra interim rights to 82 percent of revenues until the two countries settle where their maritime boundary should fall.

Australia wants to keep the maritime border agreed with Jakarta after Indonesia invaded East Timor in 1975, which would give it the lion's share of the reserves.

But Dili argues that Jakarta only agreed to that deal in exchange for Canberra's recognition of its annexation of East Timor and the border should lie at the mid-point between the two countries, in line with standard international practice.

Canberra has already issued exploration licenses in the disputed area, a move criticized by Dili and Australian left-wing Greens Senator Bob Brown.

"We're going to rob the poorest country in Southeast Asia to line the pockets of the government and the oil companies of the richest country," Brown said.

Brown was joined in his opposition by members of the Australian Democrats.

"It is ironic that the Australian government played such a crucial role in helping East Timor achieve legal independence but is now acting like bushrangers for oil," said the Democrats' Senator Natasha Stott Despoja.

Bills mirroring the Australian legislation are expected to pass the East Timor parliament after Prime Minister Mari Alkatiri said his government was committed to honoring the agreement.

But his government has taken Australia to task for issuing licenses in the disputed Timor Sea areas, which are the subject of talks to resume next month, and for refusing to agree a timeframe to settle the border issue.

Australia withdrew from the International Tribunal for the Law of the Sea in March 2002 before the dispute reached the arbiter.