Australian opposition calls for Timor Gap deal review

Australian opposition calls for Timor Gap deal review

SYDNEY (Reuters): Australia's Labor opposition urged Prime
Minister John Howard's government on Wednesday to review its
Timor Gap oil sharing treaty with Indonesia as East Timor pushes
for independence.

But Deputy Prime Minister Tim Fischer said talk of a review of
the special arrangements in the Timor Gap -- located in a
specially designated Zone of Cooperation -- was premature. "This
is absolutely premature... there's no question of change of
sovereignty at this time," Fischer said. "It (the treaty)
stands."

Australia said on Tuesday it was changing its policy on East
Timor and would support a drive for self determination for the
Indonesian-run province, located about 400 kms (250 miles) north
of Australia's northwest coast.

But political analysts stressed any such arrangement would
take a decade or so to negotiate, if ever.

"Clearly any meaningful arrangements for autonomy should allow
control by the East Timorese people over their natural
resources," Labor's foreign affairs spokesman Laurie Brereton
said.

Indonesia unilaterally invaded East Timor in December 1975
after Portugal, the former colonial power, pulled out.

Australia is the only Western country to recognize Indonesian
sovereignty over East Timor.

The Timor Gap treaty was signed by Indonesia and Australia in
1989 and splits the sea between East Timor and Australia into
three zones, one Australian, one Indonesian and the Zone of
Cooperation (ZOCA) shared by Australia and Indonesia.

Under its terms, revenue from production from the ZOCA is
shared equally between Australia and Indonesia.

Oil production from the region's Elang, Kakatua and Kakatua
North fields, run by Australia's Broken Hill Pty Co Ltd, started
in July 1998.

More substantial production is expected to come on stream in
2002 after development of the A$1.5 billion Bayu-Undan natural
gas and condensate field.

BHP and Phillips Petroleum Co, another big stakeholder in the
gap, also have proposed building a plant in the region to process
gas reserves.

Revenues from the Timor Gap are estimated to eventually reach
some US$11 billion based on reserves of 30 million barrels of oil
and 175 million barrels of liquefied petroleum gas as well as
plentiful supplies of condensate and natural gas.

"This revenue stream could contribute very significantly to
development of East Timor and the well being of the East Timorese
people," Brereton said.

Brereton also called for the Howard government to begin
preliminary discussions with exiled East Timorese resistance
leader Jose Ramos Horta and jailed guerrilla leader Xanana Gusmao
on possible future arrangements for the Zone of Cooperation.

The East Timor resistance has said it would be prepared to
negotiate with the Australian government and individual companies
on oil exploitation rights for the Timor Gap.