Mark Davis – Moves to develop massive natural gas fields in the Timor Sea face new hurdles after East Timor's government yesterday strongly disputed the Australian government's interpretation of a deal between the two countries for exploitation of the resources.

Timor's Prime Minister, Mari Alkatiri, said Canberra's claims that the Greater Sunrise gas field lay partly in an area of exclusive Australian jurisdiction contradicted the agreement and undermined its chances of being ratified.

Dr Alkatiri said Australian government officials and MPs had made the claims about the Greater Sunrise International Unitisation Agreement in seeking passage of legislation implementing the deal in federal parliament.

But he said the agreement itself clearly stated that the area in question was subject to overlapping claims which needed to be resolved.

"We signed this agreement on the clear understanding that Australia recognised our claims and sought not to prejudice our rights in the Timor Sea, as stated in the IUA, and that consequently, it would engage in good faith negotiations on permanent boundaries," he said.

But he said the Australian government had delayed negotiations to resolve the issue and instead went ahead and issued new exploration licences in the disputed area.

Dr Alkatiri's statement came before parliamentary committee hearings this week on legislation introduced to the parliament earlier this month to implement the Unitisation Agreement in Australia.