Canberra – Australia and East Timor representatives are scheduled to resume negotiations in May on a new treaty covering the share of economic benefits from petroleum production in the so-called Timor Gap area, a spokesman for Australian Foreign Minister Alexander Downer said Wednesday.
"There was some suggestion that the talks had stalled or collapsed," Downer's spokesman said in an interview. "We have an agreement to hold a further round of talks early next month." The spokesman was commenting after talks last week in Melbourne failed to secure agreement on the critical issue in the talks: the location of the boundary between the two nations, which could determine the share of royalties from energy production in the area.
The comments also follow a hard-hitting speech Monday to an Australian Petroleum Production and Exploration Association annual meeting in Hobart by Peter Galbraith, the cabinet member for political affairs and the Timor Sea in East Timor's transitional government.
Galbraith said without a treaty based on international law, East Timorese are prepared to wait patiently for their rights and risk losing important markets.
"I would like to stand before you and declare the Timor Sea is open for business," Galbraith told the conference. "Unfortunately at the moment I am unable to do this. I can't say when it will be open for business." Sharing the benefits of energy production in the 75,000 square-kilometers area was covered by the 1989 Timor Gap Treaty between Australia and Indonesia.
But this lapsed when Indonesia formally withdrew after East Timor's August 1999 vote for independence from Indonesia.
Its terms were continued under a temporary memorandum of understanding between Australia and the UN Transitional Administration in East Timor and East Timorese representatives, which oversee East Timor's transition to full independence, possibly later this year or early next. This temporary MOU will lapse on independence.
Boundary issue critical
At stake in the negotiations are hundreds of millions of dollars in revenue from royalties from oil and gas production in the area. And before any such disbursement, investments of billions of dollars in a range of offshore and onshore projects must take place.
Downer's spokesman said Australia remains committed to a successful outcome on a new Timor Gap agreement. "Obviously there are some complex and difficult issues that still need to be sorted through," he said. "With goodwill on both sides we're hopeful that a new treaty will be achieved. The key to that is there being goodwill and compromise on both sides." The major issue is the boundary.
East Timor wants the boundary located at the midway point between the two countries. Australia wants the boundary to remain at the edge of its continental shelf, which places it close to the East Timor south coast.
The vast bulk of energy production in the area will be on the East Timor side of any midway boundary point. Both sides claim international law supports their position.
"The current boundaries are pretty much supported in international law, so we haven't had a great deal to say about moving the boundaries, but we have been focusing on a lot of the other technical issues and also of course there's the issue of sharing of revenue," Downer's spokesman said.
"The boundaries issue isn't one we have been promoting," he said. The continental shelf is "supportable and we've not been seeking to change the boundary," he said.
Galbraith said East Timor knows Australia has difficulty resolving sovereignty in the Timor Sea. But East Timorese negotiators can't return with a a treaty "that would give East Timor less economic benefit than that which it is entitled under international law," he said.