Timor Leste to get extra A$8b

Timor Leste to get extra A$8b

Associated Press, Sydney

A newly reached oil and gas revenue sharing agreement between Australia and Timor Leste may be worth up to A$13 billion (US$9.6 billion) for the tiny nation, a newspaper reported on Thursday.

Australia and its impoverished northern neighbor have been haggling for several months over how to divide up an estimated US$30 billion in revenue from oil and gas deposits under part of the Timor Sea.

The negotiations have been stalled by an ongoing maritime border dispute between the two countries that has unsettled investors and caused at least one company to suspend exploration in the Timor Sea until an agreement is reached.

Earlier this year, Australian officials presented a draft agreement to Timor Leste offering the tiny country up to A$5 billion of the oil and gas revenues in exchange for postponing the border dispute.

But after a meeting with Timor Leste President Xanana Gusmao in Sydney on Wednesday, Australian Prime Minister John Howard said the two countries had reached a final agreement that would be worth several billion dollars more to Timor Leste than the previous offer.

The Australian newspaper reported in its Thursday edition that Timor Leste is expected to receive up to A$13 billion from the deal, almost three times more than the initial offer.

In exchange, Timor Leste has reportedly agreed to defer its claim to a greater share of the Timor seabed for 50 years, which would allow energy companies to exhaust the resources before border talks resume.

Foreign Minister Alexander Downer refused to comment on Thursday on exactly how much Timor Leste stands to gain from the deal, saying it was entirely dependent on the fluctuation of oil and gas prices.

"They will do very well out of it," he told reporters after meeting with Gusmao in Sydney. "They'll obviously get many billions of dollars, but over a long period time, more than 20 years."