Canberra, Dili resume tough resource negotiations

Canberra, Dili resume tough resource negotiations

Australia and East Timor resume negotiations Tuesday on sharing billions of dollars in oil and gas reserves under the Timor Sea, with Canberra battling accusations it is bullying its tiny, poverty-stricken neighbor to seize the lion's share of the resources.

The talks in the East Timor capital Dili focus on the location of a maritime boundary between Australia and East Timor, which became the world's newest nation when it gained independence from Indonesia in 2002.

At stake are oil and gas resources worth an estimated US$32 billion and Australia, which played a key role in helping East Timor gain independence, has since been widely criticized for waging a Goliath versus David battle for the undersea wealth.

Canberra is insisting that a 1972 maritime boundary agreed with Indonesia remain in force.

That boundary lies at the edge of Australia's continental shelf, giving Canberra two-thirds of the sea area between the two nations and most of the resources -- including the giant Greater Sunrise gas field.

East Timor wants the maritime boundary to lie midway between the two countries, giving it most of the resources.

The conservative government of Prime Minister John Howard withdrew from the International Court of Justice's maritime boundary dispute mechanisms two months before East Timor gained independence, preventing third-party arbitration from settling the issue.

The two sides signed an interim Timor Sea Treaty in 2002 that portioned out returns from oil and gas resources in a small zone known as the Joint Petroleum Development Area (JPDA).

Under the deal, East Timor receives 90 percent of royalties generated in the JPDA, which Australia last week said would be worth about $14.5 billion over the next 20 years at current world oil prices, or nearly $2.0 million per day.

But the deal gave Australia 80 percent of the revenues from the far larger and more lucrative Greater Sunrise field. -- AFP