Timor Gap no bonanza: Downer

Timor Gap no bonanza: Downer

SINGAPORE (AFP): Australian Foreign Minister Alexander Downer
on Tuesday rejected fears of a Gulf-like scenario arising from
any dispute over the potentially oil and gas rich Timor Gap area
if East Timor becomes independent.

He said Canberra believed a treaty governing the joint
exploration of petroleum in the area between the troubled
Portuguese colony of East Timor and Australia would continue to
be enforced even if it had to be amended.

Downer also said based on Australia's assessment, there was
not going to be a petroleum bonanza in the area.

"I would make this point to you that people who think that
somehow the Timor Gap has such wealth in it that it will be like
the Persian Gulf living around East Timor are only doomed to be
disappointed," he said.

Downer, here to attend a bilateral ministerial committee
meeting ahead of a visit to Indonesia, was responding to a
question from the floor after delivering a lecture on "Australia
and the region."

Australia and Indonesia are bound by the Timor Gap treaty,
which covers the control of offshore oil and gas reserves, but
officials have raised the possibility of a review of the pact if
East Timor becomes independent.

Indonesia has floated the possibility of letting go of the
troubled former Portuguese colony if an autonomy proposal for
East Timor is rejected by its people.

The autonomy outline is being finalized in talks with Portugal
and the United Nations.

Downer said Australia's assessment of the potential in the
Timor Gap showed "this isn't going to be to a growing oil and gas
bonanza that many hope -- although we will hope that, it will be
nice for us too.

"Our expectations is that Timor Gap treaty will just continue
but we weren't thinking of giving them the whole of the Timor Gap
right up to the beach of Australia. And that might not come as a
surprise to anybody," he said.

In December 1989, Indonesia and Australia signed an agreement
on the joint exploration of the Timor Gap where they have
overlapping border claims.

The agreement, that came into force in 1991, splits the 35,000
square kilometer (14,000 square mile) sea bed, believed to be
potentially rich in oil and gas, into three zones.

Indonesia and Australia each control one zone while the third
and largest is jointly administered with a 50-50 income split.

The contracts awarded so far, involving Mobil, Australian
Broken Hill Pty Ltd (BHP), Woodside, Shell, Phillips, Boral
Energy, Marathon and Enterprise, have been for the jointly
operated zone.

Downer said if East Timor became independent, then it would
inherit the Timor Gap treaty according to the principle of
successor state and there would be some "consequential
amendments" to the pact that would have to be made.

BHP

In a related development, BHP Indonesia president Harriet
Richards said in Bali on Tuesday that should there be any change
in the legal framework in the Timor Gap Treaty, BHP, as the lead
unit operator for the region's Elang, Kakatua and Kakatua North
fields, would abide by the changes.

Richards said on the sidelines of the Indonesia-Australia
Business Council business forum that BHP would not take any
position in the current development concerning East Timor.

"It depends on each sovereign country to rule on the fate of
the Timor Gap Treaty. The position of BHP would be wherever we
operate, all across the world, we operate under the prevailing
law," she said.

She said BHP had allocated A$130 million for the development
of the Timor gap project.

Indonesian Foreign Minister Ali Alatas has said that there
will be no changes in the legal status of the Timor Gap treaty,
unless East Timor got its independence.

Indonesian ambassador to Australia Wiryono Sastrohandojo said
also in Bali on Tuesday that should East Timor get its
independence, the treaty should be renegotiated.

"If they get independence, that (the Timor seabed boundary)
should be re-measured, which one belongs to West Timor, which one
goes to East Timor. Automatically that (the treaty) will change.
Maybe, they (East Timor) will make their own treaty with
Australia, or tri-parties, I don't know," Wiryono added. (rid)