Dili seen gaining 85% of Timor Gap oil

Dili seen gaining 85% of Timor Gap oil

SYDNEY (AFP): East Timor is likely to receive around 85
percent of the rich oil and gas reserves in the Timor Sea
following a breakthrough in talks with Australia on a new treaty,
government sources said Wednesday.

It is understood negotiators have also reached provisional
agreement on other aspects of the treaty which would replace a
now defunct pact between Australia and Indonesia which divided
production revenues equally.

East Timor, until recently a captive Indonesian province, had
no say in what happened to its oil and gas revenue, access to
which has been one of the major priorities of the UN transitional
authority set up to steer East Timor to independent democracy.

Backed by Australia's Labor opposition and minor parties, East
Timor originally demanded a 90-10 split of the revenue, tipped to
reach US$200 million a year within five years.

The government initially offered a 60-40 split, but agreed
earlier this year to revise the offer.

A dispute between the newly independent former Indonesian
province and Australia over royalties had led to suspension of
exploration plans worth billions of dollars by major oil
companies including Australia's Woodside Petroleum, Phillips
Petroleum and Shell.

But following the negotiations in Brisbane last week,
Australian officials say they are now optimistic a comprehensive
agreement on legal arrangements and revenue will be possible
within months.

A number of issues outstanding following the negotiations will
be discussed in further talks later this month between Australian
Foreign Minister Alexander Downer and East Timor's Economic
Affairs Minister Mari Alkatiri.

"We would describe the most recent meeting we held in Brisbane
with the East Timorese as constructive," a spokesman for Downer
said Wednesday.

"There's still more work to be done and they are looking at
resuming these talks later this month."

East Timorese businessman Leno Lopez, one of 20 delegates
flown to Australia for a two-day briefing about gas projects
planned for the disputed energy field, said the East Timorese
wanted the treaty finalized as quickly as possible.

"We have to get on with life and get this thing done as quick
as we can," he said.

"Really what people are interested in is getting this thing
going because we've got huge unemployment -- people have got no
money.

"If we drag this for too long, when will Timorese start to get
their royalties? Once the UN take off, we've got no money."

The briefing is being hosted by Australia's Northern Territory
government and Phillips Petroleum whose Bayu-Undan liquid natural
gas project is the most directly affected by the stalemate.