US eying East Timor gas & oil?

John Gardener

More than 50 US Congress members — including both Democrats and 
Republicans — have sent a letter to John Howard, castigating him 
and the Australian Government on the oil and gas treaty signed 
with East Timor (Timor Larosae).

The criticism hinges on the areas claimed by both the East Timor 
and Australian Governments under the East Timor Sea Treaty and 
the Joint Petroleum Development Treaty. Australia has claimed — 
under provisions sometimes accepted under UN treaties — that the 
Australian zone include all areas covered by the Australian 
continental shelf. Using these continental shelf provisions, 
Australia has claimed around 65 percent of the Timor Sea, as the 
continental shelf extends roughly 200 kilometres into the Timor 
Sea.

During the negotiations, Australia's Foreign Minister, Alexander 
Downer reportedly bullied his East Timorese counterpart saying: 
"Your claims go almost to Alice Springs. You can demand that for 
ever for all I care We are very tough. We will not care if you 
give information to the media. Let me give you a tutorial in 
politics — not a chance."

Contention

The drawing of the boundary has remained a major point of 
contention between the East Timor and Australian Governments. 
East Timor argues that the maritime boundary be redrawn according 
to the UN Convention on the Law of the Sea (UNCLOS).

If the maritime treaty boundaries were redrawn on these lines, 
Australia would not only lose access to virtually all Timor Sea 
gas and oil, it would also lose control of about 25 percent of 
its continental shelf in that region.

This would remove any Australian control over virtually all Timor 
Sea oil and gas fields and, in particular, the enormous Greater 
Sunrise gas field. Under the current Joint Petroleum Development 
Treaty provisions, Australia has 80 percent control over the 
Greater Sunrise field, with East Timor controlling the remaining 
20 percent.

This change would also mean that West Timor (part of Indonesia) 
could claim similar maritime rights over its adjoining gas and 
oil fields — a new oil-rich Brunei.

The Howard Government retaliated against the East Timorese claim 
and withdrew from the UN maritime border rulings and refused to 
recognise UN rulings on the question.

The US Congress members supported the redrawing of the East Timor 
Sea Treaty along the lines favoured by East Timor.

The Greater Sunrise field has not yet been developed. Apart from 
the obvious treaty problems, there have also been differing 
engineering views on the project.

Proposals

There are a number of proposals being considered: that the gas be 
piped to Darwin for processing, linking into a proposed gas 
pipeline being built between Darwin and the neighbouring Bayu-
Undan gas field; that the gas be processed at sea on a floating 
Liquid Natural Gas processing plant; and that the gas be piped to 
East Timor for processing there. Until the treaty is finalised, 
it is unlikely there will be any final decisions made on 
processing.

The letter to Howard follows hot on the heels of a lawsuit 
brought in a Washington (US) court alleging that one of the US 
companies involved in the East Timor oil and gas exploitation, 
ConocoPhillips, had bribed the East Timor Prime Minister, Mari 
Alkatiri, and "... had paid Mr Alkatiri about US$2 million in 
bribes to secure his support for ConocoPhillips' stake in 
exploring the Timor Sea for oil and gas ...".

These allegations have been strongly denied by Mr Alkatiri, who 
is taking steps to bring his own lawsuit against the company 
making the allegations.

Bitter struggle

The letter to the Howard Government by the US Congressmen 
indicates that there is a bitter struggle between different oil 
and gas corporations — between those owing their allegiance to 
the US and those supported by the Australian Government.

In this contest between the giant corporations the interests of 
the East Timorese government and people will certainly come off 
second or third best.

One of the interesting points about the Timor Sea gas and oil 
contest is the complete absence of the largest oil company in the 
world, the giant US corporation Exxon-Mobil or one of its 
subsidiaries. It is very, very rare for major fields to be 
developed without Exxon's participation. Strange indeed.