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."