East Timor wants a new gap treaty with Australia

East Timor wants a new gap treaty with Australia

SYDNEY (Agencies): East Timor wants to dismantle the Timor Gap
treaty and draw up new maritime boundaries, putting virtually all
the petroleum-rich Australia-Indonesia joint development area
under Dili's control, a report said Thursday.

The National Council of Timorese Resistance (CNRT) wants
agreement with Canberra on a new international boundary by the
time Dili's first independent government is established next
year, according to The Australian.

"We are doing everything we can to have this settled and ready
to be signed by the first elected leader of the new East Timor
nation," said Mari'e Aikatiri, CNRT's economic planning chief.

"We are not thinking of renegotiation but a new treaty."

Talks between Aikatiri and Peter Galbraith, political chief of
the UN Transitional Administration in East Timor (UNTAET), were
expected to be held in Canberra Thursday.

The CNRT is seen as East Timor's government-in-waiting and
wants a seabed boundary drawn between East Timor and Australia as
the starting point for negotiations on a new Timor Gap oil and
gas revenue-sharing deal.

It would effectively give East Timor crucial fiscal gains, but
Australia would lose significant royalty revenue.

AFP reported that Australian Foreign Minister Alexander Downer
said his government was prepared to listen to the East Timorese
case but emphasized the need for a stable political climate in
the area.

"The Timor Gap Treaty arrangements will be a matter for
agreement in due course between Australia and East Timor," his
spokesman said.

"But, both parties are fully aware of the commercial
importance of maintaining stability in the Timor Gap regime."

Meanwhile, a Phillips Petroleum Co executive said on Thursday
Australian, East Timorese and United Nations officials have told
oil companies renegotiation of the Timor Gap Treaty would not
hurt their oil and gas plans, .

Companies led by operator Phillips have invested hundreds of
millions of dollars in the Timor Gap and are counting on the
terms of the treaty to stay the same or at least not hurt the
economics of their development projects.

Phillips Darwin area manager Jim Godlove said companies had
made clear to Australian, East Timorese and United Nations
officials it was essential to keep a legal and administrative
regime in place and make sure the tax, cost recovery and
production sharing terms for the companies were not worsened.

"A fiscal regime equivalent to the one that we're operating
under right now -- no more onerous -- must remain in place,"
Godlove told Reuters.

The Timor Gap Treaty was signed between Australia and
Indonesia in 1989.

Earlier this year UNTAET, the UN authority which took control
of East Timor after the territory voted for independence from
Indonesia in August, formally replaced Jakarta as partner in the
regulation and administration of petroleum operations.