Dennis Shanahan, Nigel Wilson – East Timor is expected to get more than $13 billion in gas royalties after a new deal with the Australian Government that is $8 billion more generous than first offered seven years ago.
The deal, which will take several weeks to put into a formal agreement, almost triples the revenue for East Timor over the next 15 to 30 years.
After meeting East Timorese President Xanana Gusmao yesterday at Kirribilli House in Sydney, John Howard said the arrangement would allow Australia's fledgling neighbour to access billions of dollars in extra royalties. "It is a very fair and generous arrangement for East Timor," the Prime Minister said.
The negotiations on developing a new and lucrative gas field to boost East Timor's economy now move to a crucial deal between East Timor and the Greater Sunrise gas project, headed by Australia's Woodside Petroleum.
Don Voelte is expected to meet East Timor Prime Minister Mari Alkatiri within days in Dili for talks on the $5billion project, which has been stalled by the delays in government negotiations.
Mr Howard also disputed previous claims that Australia had been unfair on the issue in the past.
"It will mean that that country will receive several billion dollars more over the years ahead than would otherwise have been received under the earlier arrangement," Mr Howard said.
"I reject completely the complaints that are still being made by some that Australia has been unfair and ungenerous towards the people of East Timor. We have always accepted the need to help the people of East Timor, consistent with our obligations to the Australian taxpayer."
The government-to-government deal settles the dispute between Australia and East Timor over the new nation's rights to gas revenues under an agreement sealed between Australia and Indonesia before East Timor's independence.
East Timor had rejected the boundary agreed between Australia and Indonesia, meaning there is no legally recognised boundary between the two countries.
The East Timor officials claimed that to accept the Indonesian boundary with Australia would have cost them billions of dollars in revenue.
Australia has not given way on the boundary dispute and no boundary claims will be allowed for the next 50 years.
The East Timor claim that the gas processing plant be sited in East Timor, instead of Darwin, has been left to be decided between East Timor and Woodside.
In 1998, the Australian Government first offered a $1billion share in gas revenues from the proposed Sunrise project and $4.1billion from the nearby Bayu-Undan project.
After the UN estimated East Timor could get $US30billion if it had control of the whole area, the offer was lifted to $1.8billion from Sunrise and $8.1billion from Bayu-Undan. The last offer, which was delayed last year because of the federal election, is for $5billion from Sunrise and $8.1billion from Bayu-Undan.
The Government in Dili has introduced strict financial guidelines on handling the revenues.
Modelled on the Norwegian experience for handling North Sea oil revenues but even tougher, the East Timor legislation ensures the revenues are paid into a fund that must be open to parliamentary scrutiny.