HT Lee – When Howard claimed Australia is generous by giving East Timor a 90% share of the royalties – what he forgot to mention is that it is only for one of the three oil and gas fields off the Timor Sea – Bayu-Undan.
Under the terms of the treaty, East Timor is not getting a 90% share of the gas field of Greater Sunrise which is three times the size of Bayu-Undan – it is only getting an 18% share of Greater Sunrise and no share at all in the oil field of Laminaria/Corralina.
The treaty continued to maintain a joint petroleum development zone – the JPDA. Its boundary is based on the same boundary as 'Zone A' of the now defunct 1989 Timor Gap Treaty with Indonesia. It favours Australia because it recognises Australia's use of the continental shelf seabed boundary rather than the internationally accepted median-line (half way) boundary between the two coastlines.
East Timor under international law is entitled to its own exclusive economic zone (EEZ). The whole of the JPDA including at least 80% if not the whole of Greater Sunrise, and 100% of Laminaria/Corralina should fall within East Timor's EEZ – if the median-line and eastern and western lateral boundaries are recognised and applied.
Under the terms of the treaty – the revenue sharing in the JPDA is 90:10 in favour of East Timor but no revenue sharing in Australia's EEZ. We therefore have a classic situation here of: "What's yours is partly mine. But what is mine is wholly mine."
At stake is an estimated tax revenue – expressed in cumulative dollars of the day of $US50 billion from the three oil and gas fields in the Timor Sea – Bayu-Undan with a gas reserve of 175 million barrels of LPG, 229 million barrels of condensate and 66 million tonnes of liquefied natural gas (LNG), returning an estimated tax revenue of US$12 billion from 2005 to 2030; Greater Sunrise with a gas reserve of 300 million barrels of condensate and 177 million tonnes of LNG, returning an estimated tax revenue of US$36 billion from 2008 to 2050; and Laminaria/Corralina with an oil reserve of 198 million barrels, returning an estimated tax revenue of US$2 billion from 2000 to 2012.
East Timor will also miss out on the estimated thousands of jobs and millions of dollars in industrial spin-off because the gas will be piped onshore to Darwin instead of East Timor.
Howard claimed by giving East Timor a 90:10 split of the oil and gas revenue in the JPDA – as opposed to the 50:50 split with Indonesia under the 1989 Timor Gap Treaty, Australia has been fair and generous to East Timor.'
However East Timorese opposition MP Eusebio Guterres disagrees. "How can you give away something that does not belong to you?" Eusebio asked.
According to Eusebio if East Timor claims its rightful maritime boundaries and EEZ – all the oil and gas fields of Bayu-Undan, Greater Sunrise and Laminaria/Corralina should belong to East Timor.
Australia and East Timor can still agree to share the Timor Sea's oil and gas resources – using a formula that would benefit both parties. "It should be East Timor, not Australia who should be dictating the terms of any agreement," Eusebio said.
Eusebio also pointed out the oil field of Laminaria/Corralina has began production and has in the past two years returned a tax revenue of US$650 to Australia. "If East Timor has had its own EEZ, that money should rightfully belong to East Timor," Eusebio said.
A spokesperson for East Timor's Prime Minister, Alkatiri said the treaty was only an interim one – it would allow Bayu-Undan to proceed as plan and begin production by 2005. East Timor would still be pursuing its rightful maritime boundaries and is confident of victory. He also believes by the time Greater Sunrise begin production around 2008, East Timor's maritime boundary would have been settled with at least 80% if not the whole of Greater Sunrise would fall within East Timor's EEZ. And under such circumstances, he felt the treaty was fair and the best deal East Timor could get for the time being.
When asked why East Timor did not just conclude a Memorandum of Understanding (MoU) covering only Bayu-Undan, his reply was they wasn't any possibility or opportunity for that to take place.
The treaty was conducted in secrecy and behind closed doors by only a handful of people. And throughout the negotiations, Australia behaved like the typical school boy playground bully and took advantage of East Timor's economic and strategic vulnerability.
East Timor was also forced to conclude the treaty because the US$360 million bridging aid the donor countries promised for the next three years was conditional to the treaty being concluded and signed.
Although the treaty does not prejudice East Timor from seeking its maritime boundaries – the decision by Attorney-General Darly Williams and Foreign Minister Alexander Downer in March to exclude Australia from the 1982 United Nations Convention of the Law of the Sea (UNCLOS), can only – as pointed out in the editorial of the Sydney Morning Herald of 17 May: "... raise suspicions that Canberra is withdrawing the only avenue of appeal effectively available to East Timor, given the unequal diplomatic weight of the parties."
By signing the treaty, many local MPs and international legal experts fear East Timor has jeopardise its changes of getting a bigger share of the oil and gas revenue of the Timor Sea – we could end up in a situation where East Timor might be successful in obtaining its rightful maritime boundaries but loosing out on getting a bigger share of Greater Sunrise.
To ensure Australia maintains its claim of the EEZ, the 'dirty tricks department' has now been put into full swing. On 22 April, a month after the announcement of Australia intention to withdraw from UNCLOS, the Minister for Industry, Tourism and Resources, Ian Macfarlane released 81 offshore petroleum exploration acreage for bidding.
Hidden among the bids is an area known as "NT02-1" – latitude: 90 24' 54.87", 90 59' 54.87" longitude: 1280 20' 04.35", 1280 50' 04.34". This is just outside the JPDA and adjacent to Greater Sunrise – an area which East Timor is contesting as within its rightful seabed boundary.
According to a UN source who do not wish to be named, East Timor had an understanding with Australia after the signing of the 5 July 2001 Timor Sea Arrangement that: "... the Arrangement does not authorise or permit, and cannot be construed as authorising or permitting, Australian exploration or exploitation of petroleum in areas outside the JPDA that are on the seabed claimed by East Timor."
Howard's and Downer's spin doctors are working overtime. But no matter how much spin they make, they cannot escape from the fact that the gas and oil fields of Bayu-Undan, Greater Sunrise and Laminaria/Corralina belong to East Timor.
As pointed out by Eusebio, you cannot give away something that does not belong to you.
The oil and gas fields in question is not Australia's to give away – they belong to East Timor. It is up to East Timor to decide how much if any they would like to give away to Australia.
As pointed out in the latest bulletin of La'o Hamutuk – The East Timor Institute for Reconstruction Monitoring and Analysis: "Canberra played a significant role in derailing East Timorese political independence from 1975 to 1999. As East Timor's independence is now imminent, Australia cannot be allowed to undermine the new country"s future.'
East Timor is the poorest nation in the region. Australia must therefore not frustrate East Timor's rightful claim to its maritime boundaries and its rightful share of the oil and gas fields of the Timor Sea.