Australia to offer E. Timor 80% of Timor Gap oil revenues

The Australian government will offer East Timor a much larger share of the income from the contested Timor Gap oil reserves under a renegotiated resource-sharing deal, the Sydney Morning Herald newspaper reported Wednesday.
The daily quoted unnamed federal government sources as saying Australia was willing to give the new independent government in Dili 80% or more of the income from a joint production zone in the Timor Sea, which separates East Timor and northern Australia.

Revenue from the zone is currently split on a fifty-fifty basis in accordance with the Timor Gap Treaty, signed by Australia and Indonesia in 1989 during Indonesia's 25-year rule of East Timor.

Australia began negotiations with the U.N. Transitional Authority in East Timor (UNTAET) last October to work out a new deal to take effect when the fledgling nation achieves full independence.

According to the Herald, the sources said Australia was willing to offer the higher revenue split if there were no changes in the seabed boundaries, which could open up problems over Australia's border with Indonesia.

UNTAET officials have argued for a 90-10 revenue split in East Timor's favor based on most of the richest oil and gas fields being closer to East Timor.

Foreign Minister Alexander Downer will meet with Northern Territory government representatives Wednesday evening to solidify Australia's position ahead of further talks between Australia and the UNTAET next month.

A spokesman for Downer declined to confirm Australia's current position but said it would be ''more generous'' to East Timor than a previously offered 60-40 split.

Production payments from the joint production zone are expected to reach A$140 million (about $70.2 million) a year by 2004.

home.kyodo.co.jp