Oil giant may pull out of Timor project
Oil giant may pull out of Timor project
Agence France-Presse Sydney
Australian oil giant Woodside Petroleum warned on Wednesday that it may abandon its multi-billion dollar Timor Sea oil and gas project in a move that would threaten the economy of East Timor, one of the world's most impoverished nations.
Woodside's threat followed a pledge by Australia's opposition Labor leader Mark Latham to start new talks with East Timor on its protracted border dispute with Australia if he wins the upcoming election.
Woodside believes that, far from settling the long-running dispute, a new round of talks would stretch them out indefinitely, throwing the entire project into doubt.
Australian Foreign Minister Alexander Downer said he would suspend talks with East Timor over the issue, which he said was being politicized by Latham, arguing that there would be no point in going ahead with them.
Woodside is the lead developer in the Greater Sunrise gas project, the revenues from which will be the primary source of income for one of the world's poorest and newest nations.
It says it is difficult to develop the field and lock in supply contracts amid continued uncertainty.
"Without resolution, the project will stall," a Woodside spokesman said. "What happens after that is anyone's guess. It could be abandoned or it could not be abandoned."
The Australian and East Timor governments are locked in protracted negotiations over boundary lines after East Timor said it wants the border redrawn to half way between the two countries, which would effectively give it a greater share of the gas revenues.
Prime Minister John Howard's conservative government has been accused of bullying the fledgling nation by claiming ownership of the oil-rich continental shelf two-thirds of the way across the Timor Sea under the terms of an agreement with Indonesia when it controlled East Timor.
East Timor Prime Minister Mari Alkatiri said last month redrawing the boundary would be worth an additional US$12 billion in revenue for his country over the "next generation", compared with $4.0 billion under the existing arrangement.
Latham, who opposed Australia's decision to lead a UN-backed military force to East Timor to stem the bloody rampage by pro- Indonesian militia after the East Timorese voted for independence in 1999, said last week that a Labor government would start negotiations from scratch because "bad blood" had dominated the existing talks.
Foreign Minister Downer subsequently threatened to suspend the talks, throwing the whole project in doubt.
Australian Prime Minister John Howard said Latham's comments were unhelpful and could threaten the gas project's future.
"Nobody should assume that investment doesn't go where the most attractive bargain is to be found; that's always been the case," he told reporters.
"It is in everybody interests that we bring these negotiations to an end as soon as possible."
The Australian newspaper said Woodside's new chief executive Don Voelte would travel to East Timor this week when he will emphasize that the Sunrise partners may have no choice but to abandon the project if the squabble is not resolved.