Sat, 11 Sep 1999

Indonesia has no claim over Timor Gap: Minister

JAKARTA (JP): Indonesia will most likely have no territorial claim over the Timor Gap if and when East Timor becomes an independent state, Minister of Mines and Energy Kuntoro Mangkusubroto said on Friday.

Geographically, the Timor Gap is closer to East Timor than to Indonesia's West Timor, Kuntoro said.

Financially, however, the loss of the Timor Gap would not prove to be a big blow to Indonesia, he said.

The US$3.07 million in royalty payments which Indonesia has earned from the Timor Gap since October of last year "is insignificant", he said.

Indonesia and Australia signed the Timor Gap treaty in 1989, allowing for the joint exploration and exploitation of the seabed, which is believed to contain large hydrocarbon deposits.

The two countries have overlapping territorial claims in the Timor Gap. However, with East Timor now likely to become an independent state, the border dispute would have to be resolved by East Timor and Australia, Kuntoro said.

East Timorese rejected Indonesia's offer of autonomy within Indonesia in the UN-sponsored ballot on Aug. 30, which amounted to a vote for independence. However, the results of the ballot are subject to the endorsement of the People's Consultative Assembly, which will meet in November.

The joint exploration efforts in the Timor Gap resulted in the discovery of oil in 1998 in the Elang-Kakatua-North Kakatua field, operated by United States-based Phillips Petroleum Co. The field produces 16,000 barrels of oil per day.

With a reserve of 30 million barrels, the field will likely be closed next year, Kuntoro said.

The Bayu-Undan field, operated by Phillips Petroleum Co. and Australian-based Broken Hill Pty. Ltd., is not expected to begin production until 2002. The field has an estimated reserve of 350 million barrels of oil and three trillion cubic feet of natural gas.

Kuntoro said other exploration activities in the joint operation zone failed to discover significant oil reserves.

Australian officials have said that although current oil production in the Timor Gap is limited, the area is one of the richest sources of hydrocarbon outside of the Middle East. (02)