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.