Timor plants to trade gas for security with Aussie

Agence France-Presse, Sydney

Australia is ready to consider a proposal by East Timor that it swap billions of dollars in disputed oil revenue for a treaty guaranteeing maritime protection, officials said Wednesday.

The plan, which would settle the thorny issue of how Australia and East Timor should split revenue from the Timor Sea's rich gas fields, was unveiled by the fledgling nation's foreign minister at a meeting of the Association of South-East Asian Nations (ASEAN) this week.

Australian officials said they had not received a formal submission from Foreign Minister Jose Ramos-Horta, but were open to proposals.

A spokesman for Foreign Minister Alexander Downer, who is attending the ASEAN meeting, said East Timor was a good friend of Australia, and "anything Timor wants to put forward will be considered."

Ramos-Horta said in exchange for sharing some of the gas proceeds from the Greater Sunrise gas field Australian coast guard boats would patrol East Timor's southern coast to protect against drugs and people smuggling, pirates and illegal fishing.

The yet-to-be-developed Sunrise field is expected to generate tax revenue of US$4.3 billion.

"We should look at the Timor Sea as a whole strategy, as an area of peace and prosperity between East Timor and Australia," Ramos-Horta said.

However, he is yet to put his plan to East Timor Prime Minister Mari Alkatiri, who has a tougher stance on the issue, and has only raised it informally with Downer.

East Timor's dispute with Australia over the Timor Sea centers on maritime boundaries and how revenue from its gas fields should be divided.

Alkatiri wants to claim a more extensive maritime boundary than Indonesia enforced during its 24-year annexation of the country.

The extended boundaries would include the Greater Sunrise field, which under current boundaries lies in an area in which revenue would be split, Australia receiving 82 percent and East Timor picking up the remainder.

Alkatiri wants all of it, and faced with the prospect of a successful challenge, Australia withdrew from the International Court of Justice for maritime disputes, stonewalling what East Timor considered a strong case.

Under Ramos-Horta's proposal, Australia would recognize East Timor's extended maritime boundaries but would also receive a significant slice of Greater Sunrise revenues, the size of which would be subject to negotiation.