E. Timor gets oil royalties from Australia
E. Timor gets oil royalties from Australia
SINGAPORE (Dow Jones): Newly independent East Timor received
its first oil royalty payment from Australia last week, according
to an Australian official at the department of Industry, Science
and Resources.
The payment of A$6 million (about US$3.2 million) covered
royalties on production from the Elang oil fields, located in
Area A 91-12 of the jointly administered Zone of Cooperation.
The Zone of cooperation - which is split into three sectors -
covers an area of disputed offshore territory rich in
hydrocarbons stretching between Australia's northern coast and
East Timor.
East Timor wants to renegotiate the terms of the existing Zone
of Cooperation treaty, agreed between Australia and Indonesia in
1989. However, it signed a memorandum of understanding with
Australia in February, temporarily maintaining the 50-50 Zone A
royalty split in force between Australia and Indonesia prior to
East Timorese independence.
The first round of treaty renegotiation took place between the
Australian government the provisional East Timorese government
Oct. 9-11 in East Timor's capital, Dili. East Timor wants a
redrawing of the treaty's boundaries, and a larger share of
royalties.
A date for the second round of talks has yet to be fixed.
The Australian official pointed out that A$150 million in aid
has been earmarked for East Timor over the next four years. This
figure could fall if East Timor's revenue from oil royalties
rises.
Currently, only the Broken Hill Proprietary Co.-operated Elang
fields, comprising Elang, Elang West and Kakatua, are producing
oil in the treaty area. But there are a number of producing
fields in offshore territory very close by, including the
Woodside Petroleum Ltd.-operated 150,000-barrel-a-day Laminaria-
Corallina field. It is unclear whether these fields lie in
territory disputed by East Timor.
Royalties will rise once liquids production begins at the
giant Phillips Petroleum Co.-operated Bayu Undan gas and
condensate field, which, like Elang, is located in Zone A 91-12
of the treaty area. Philips issued initial engineering contracts
for Phase One of the field development - comprising condensate
and liquid petroleum gas production - in October.