East Timor Claims Windfall From Maritime Boundary Pact

East Timor would get access to up to US$12 billion worth of oil and gas under a maritime boundary the impoverished country wants set between its coast and Australia, East Timor Prime Minister Mari Alkatiri said Monday.

That figure compares with likely revenues in the order of US$4 billion under a temporary treaty between Dili and Canberra, Alkatiri said in a speech to the Southeast Asia-Australia Offshore Conference for energy producers in the northern city of Darwin.

While Australia and East Timor have agreed to a treaty to carve up a resource-rich area of the Timor Sea, the deal is only temporary, pending a fixed boundary between the two nations.

The interim deal allows East Timor to take 90% of government revenue from the so-called Joint Petroleum Development Area, including the ConocoPhillips-operated Bayu Undan field and part of the Woodside Petroleum-operated Sunrise project.

However, East Timor has so far refused to ratify a second revenue-sharing deal known as the International Unitization Agreement. Under this deal, 80% of Sunrise - believed to hold the largest deposits of gas and oil in the Timor Sea - falls within Australian waters and the remaining 20% in the joint development area.

Alkatiri has accused Australia of bullying one of the world's poorest nations by dragging out the talks and refusing to accept a maritime boundary in the middle of the 600 kilometers of sea separating the two countries.

Australia, instead, argues the boundary should be the edge of the continental shelf, which in some places is just 150 kilometers from East Timor's coastline and more than 450 kilometers from Darwin.

Alkatiri said that Australia's refusal to have a "neutral third party" resolve the dispute "suggests an uncertainty about the strength of Australia's legal case," Dow Jones Newswires reported.

Under the current temporary deal, East Timor will "most likely receive revenues in the order of US$4 billion over the next generation," he said.

However, international experts believe that a permanent maritime boundary midway between the countries would give East Timor "significantly greater resources in the Timor Sea - providing revenues potentially in the order of US$12 billion over the same time based on known reserves," Alkatiri said.

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