Talks on Timor Sea issue near end

Talks on Timor Sea issue near end

Agence France-Presse, Sydney

Australia and its tiny neighbor East Timor are moving closer to a deal on sharing billions of dollars' worth of oil and gas reserves under the Timor Sea.

With talks due to wind up later on Thursday in Dili, the two sides are discussing an agreement that would allow work to start on the Greater Sunrise oil and gas field, which has an estimated A$9 (US$7 billion) worth of reserves.

East Timor, which was Asia's poorest nation upon independence in May 2002, would get greatly increased payments in return for shelving talks on the maritime boundary between the two nations for 60 years, The Australian newspaper reported.

"It's a constructive discussion and we're progressing well," the paper quoted a senior Australian foreign affairs official, Doug Chester, as saying.

Chester said East Timor has proposed a deal that would allow Greater Sunrise to go ahead "and provide them with human resource development, industry development and an increase in revenue share.

"In return they've offered to put off talks on a maritime boundary for a considerable period of time," he was quoted as saying.

Foreign Minister Alexander Downer said separately that "this time we hope that we can make real progress.

"The report I had late last night was that these talks were going well," he told Channel 7 in an interview.

Australia headed a peacekeeping force which played a key role as East Timor moved towards independence. But the dispute over oil and gas resources worth an estimated $32 billion has soured relations.

Canberra is battling accusations it is bullying Dili to seize the lion's share.

The dispute is over where the boundary should run. Australia insists that a 1972 maritime boundary agreed with East Timor's former ruler Indonesia remains in force.

That boundary, at the edge of Australia's continental shelf, gives Canberra two-thirds of the sea area and most of the resources -- including Greater Sunrise.

East Timor wants the boundary to lie midway between the two countries, giving it most of the resources.

Downer said Australia's interest "isn't to rip off East Timor" but maintained that the north-south boundary had been resolved in negotiations on the 2002 Timor Sea Treaty.

That pact created a Joint Petroleum Development Area (JPDA) situated between the boundary claimed by each side, with East Timor receiving 90 percent of revenues from that area and Australia 10 percent.

But the deal gave Australia 80 percent of the revenues from Greater Sunrise.

Downer said East Timor is trying to expand the boundaries of the JPDA to the east and west, an issue which also involved Indonesia.

"Now we say that there is no basis in international law for that," he told Channel 7.

Australian supporters of East Timor have been waging a shame TV advertising campaign -- dismissed by Downer as "absurd rhetoric" -- against Canberra.

The Timor Sea Justice Campaign said the final two ads in a series of five have been rejected by the Commercials Advice Division of Free TV Australia, which represents all of Australia's commercial free-to-air television licensees.

The advertisements feature World War II veterans who served in East Timor criticizing Prime Minister John Howard over the talks.

"Obviously, the Australian government isn't keen for these messages to become public," said campaign spokesman Tom Clarke.