Veronica Brooks, Canberra – East Timor's Prime Minister, Mari Alkatiri, said Friday he believes Dili and Canberra can quickly finalize a revenue-sharing agreement covering Woodside Petroleum Ltd.'s (WPL.AU) stalled US$5 billion Sunrise gas project in the Timor Sea.
"Yes, I think it is possible this month," Alkatiri told Dow Jones Newswires in an interview.
He also said that East Timor is determined, in resolving a few outstanding "technical issues" in the text of the agreement, that the deal won't prejudice the impoverished nation's right to seek a permanent maritime boundary further down the track.
Alkatiri's comments offer greater certainty that the neighboring countries are on the cusp of completing a pact, contrasting with recent comments from East Timor President Xanana Gusmao that Dili shouldn't rush into settling the dispute over oil and gas revenues before the three-year-old nation can handle the royalties.
Earlier this month, Australia's Resources Minister Ian Macfarlane said the agreement needs to be signed urgently because Woodside, operator of the Sunrise project, is seriously looking at other development options.
According to Macfarlane, the deal thrashed out between the two countries last month in Sydney could deliver an extra US$5 billion in petroleum royalties to East Timor in addition to existing revenue arrangements.
In return, East Timor will agree to set aside negotiations on a permanent maritime border for 50 years.
But even if the deal is finalized this month, it will still take several months for the document to be ratified by parliaments in East Timor and Australia.
Alkatiri told Dow Jones Newswires the revenue-sharing treaty will help the East Timorese government eventually make much-needed investment in areas such as health, education and physical infrastructure.
As well, a portion of the revenues will be put into a petroleum fund, generating a perpetual stream of earnings that will support future generations of East Timorese.
And while conceding the yearlong negotiations between East Timor and Australia have been difficult, Alkatiri is "satisfied" with the end result.
"The relationship (between East Timor and Australia) is very good. We have managed to isolate outstanding issues from others," he said.
The key now is whether Woodside is willing to revive Sunrise, regarded as the richest prize in the Timor Sea.
A proposed liquefied natural gas export venture was shelved by Woodside late last year because of the uncertainty created by the maritime border row.
Perth-based Woodside insists that it won't proceed with further development studies until it obtains "fiscal, legal and regulatory certainty" over the project.
The company's current focus is its Browse project, located wholly in Australian waters. It is targeting a 2011 start that will export LNG to Asia, and potentially the US West Coast.