Howard defends Timor Leste oil deal as fair

Howard defends Timor Leste oil deal as fair

Agence France-Presse, Sydney

Australian Prime Minister John Howard on Wednesday defended as "fair and generous" a deal with impoverished Timor Leste over billions of dollars in oil and gas reserves under the disputed Timor Sea.

Howard, speaking after a meeting here with Timor Leste President Xanana Gusmao, did not reveal how much each country would get from the carve-up under which Dili would defer claims over their maritime border.

An acrimonious dispute between Australia and Asia's newest and poorest nation over the reserves under the Timor Sea had seen religious groups, war veterans and rights activists pressing Canberra to give Timor Leste a fair deal.

"It is a very fair and generous arrangement for Timor Leste," Howard told reporters. "It will mean that country will receive several billion dollars (more) over the years ahead than would otherwise have been received under the earlier arrangement."

Howard denied Australia had acted unfairly towards the fledgling nation, saying: "We have always accepted the need to help the people of East Timor (Timor Leste), consistent with our obligations to the Australian taxpayer."

Gusmao, who is on a week-long visit to Australia, did not speak to the media after meeting Howard briefly at the Australian leader's official Sydney residence, Kirribilli House.

Timor Leste's Foreign Minister Jose Ramos Horta, who is accompanying Gusmao, said on Wednesday however that the broad political terms of the pact had been agreed and the last technical details were being worked out.

"I believe it's now only a matter of a few weeks, maybe in the month of August, when we will sign the agreement on Greater Sunrise," he told the Australian Associated Press. "As the agreement stands at the moment it's a very fair one for both sides. Our side is pleased with the outcome so far."

He said the two countries would defer any decision on where their maritime boundary should be fixed for 50 years to allow oil and gas projects to go ahead.

Under the deal, according to earlier reports, Australia's tiny northern neighbor would receive a larger share of revenues from the Greater Sunrise oil and gas field in return for dropping the boundary dispute.

It would also continue to receive a 90 percent share of revenues from the previously agreed Joint Petroleum Development Area, worth more than A$10 billion (US$7.5 billion).

The dispute blew up when Australia, which headed a peacekeeping force that played a key role in Timor Leste's independence from Indonesia in 2002, insisted that a 1970s sea boundary agreed with Jakarta should remain in place.

That boundary gives Canberra two-thirds of the sea area and most of its energy resources, estimated to be worth A$32 billion, including 80 percent of the large Greater Sunrise field.

Timor Leste wants the boundary to be set at the mid-point between the two countries, which would give it most of the resources.

Dili has said the resources revenue was the tiny country's only chance of ending its dependence on foreign aid and accused Australia of trying to cut its financial lifeline.

Australia withdrew from the International Court of Justice's maritime boundary dispute mechanisms in 2002, preventing an independent arbiter from settling the issue.

Oil companies had threatened to scrap Timor Sea projects if the two governments did not end their squabbling over the resources revenue, saying their clients were uncomfortable at the failure to resolve major issues.