Timor oil

Timor oil

East Timor has finally secured its pot of liquid gold. After
protracted, sometimes bitter, negotiations with Australia over
oil and gas in the Timor Sea, agreement on the disputed Greater
Sunrise gas deposit confirms a resource-led future for East
Timor.

With the Bayu-Undan oilfield already on line, and that money
flowing, Australia's poor, vulnerable young neighbor has a real
opportunity to build a viable economy and end aid dependency for
good.

Conservative estimates suggest East Timor can count on $US15
billion in oil and gas royalties over about 40 years.

The sudden injection of large sums of easily won cash into any
economy also inevitably erodes cultures of thrift. Incompetently
or corruptly managed resource riches can make poor nations
poorer. East Timor's transparent Petroleum Fund, however, is a
prudent plan for the future.

The fund locks Timor Sea oil and gas revenue into sustainable,
long-term international investments. It is not foolproof, and
much hangs on whether returns from the fund can be translated
into prosperity. It is, however, the best possible start.
-- The Sydney Morning Herald