Australian lawmakers to approve Timor Sea gas deal

Australian lawmakers to approve Timor Sea gas deal

Rod McGuirk, Associated Press, Canberra, Australia

Australian lawmakers on Wednesday were expected to approve legislation paving the way for Australia and East Timor to carve up a gas and oil field, a deal minor political parties say short changes one of the world's poorest nations.

Under the deal, Australia will take about 80 percent and East Timor 20 percent of royalties from the Greater Sunrise field, which some analysts say could contain up to A$40 billion (US$30 billion) worth of gas and oil.

Opposition lawmakers say that is unfair to the impoverished fledgling nation.

"What a terrible, terrible situation," an emotional Green Party leader Bob Brown said in Parliament. "If I feel angry about it, how must the East Timorese feel?"

But the legislation appeared certain to become law after the opposition Labor Party agreed to support it.

The Australian government and newly independent East Timor struck the revenue sharing deal last year, based on a maritime border between the two neighbors which was drawn by Australia and East Timor's former ruler, Indonesia, in the 1970s.

That border placed 80 percent of Sunrise exclusively in Australia's hands and 20 percent in a joint development zone shared between the two countries under a treaty.

East Timor disputes that border and has begun negotiating with Australia for a new one that delivers more of Sunrise and, with it, a larger share of its royalties. It agreed to the revenue sharing deal as a way of getting money quickly from the gas reserves while drawn-out maritime border negotiations continue.

But even now the East Timorese Parliament has yet to ratify the revenue deal.

East Timorese Prime Minister Mari Alkatiri has accused Australia of delaying border negotiations while continuing to issue mineral exploration licenses around Sunrise and that Australia's continued claims to 80 percent of Sunrise "undermine prospects for its (the royalty deal's) approval."

Members of the U.S. Congress have joined in East Timor's criticism of Australia.

Barney Frank, Democratic congressman from Massachusetts, along with 53 colleagues, wrote to Australian Prime Minister John Howard criticizing his government for failing to give a time frame to settle the boundary.

The U.S. lawmakers wrote: "Given the overlapping claims of the two countries, we would strongly hope that any revenue from disputed areas be held in escrow until a permanent boundary is established."

The Australian Parliament on Wednesday rejected an amendment proposed by a minor party, the Australian Democrats, that would have forced the government to hold in trust any tax revenue generated by Sunrise until permanent boundaries are determined.

Government Cabinet minister Eric Abetz defended as reasonable Australia's plan to negotiate with East Timor on the new border once every six months.

Alkatiri, who maintains East Timor is entitled to all of Sunrise under international law, wants the meetings to be held monthly.

"While delaying on negotiations, Australia has issued new licenses in disputed areas near Sunrise and is continuing to derive revenues from other disputed parts of the Timor Sea," he said in a statement quoted in Parliament.