Rod Mcguirk, Canberra – A senior East Timorese official Thursday lamented the likely scrapping of a $5 billion natural gas project in the Timor Sea because of a deadlocked border dispute with Australia.

Woodside Petroleum Ltd., the Australian energy company responsible for the project, has said development of the massive Greater Sunrise oil and gas field – believed the richest in the Timor Sea – could be shelved if a revenue-sharing agreement is not struck between Australia and East Timor before the year's end.

"We lament that it hasn't been able to proceed," said East Timor's Secretary of State, Jose Teixeira, adding that he doubted a solution would be found in the next six weeks – or that the two sides would even meet again before 2005.

East Timor wants to divide the seabed midway between its southern coast and northern Australia but Canberra insists on maintaining a maritime border closer to East Timor, as agreed in 1989 when East Timor was still a province of Indonesia.

Where the line is finally drawn will determine the countries' respective share of billions of dollars of oil and gas revenue.

Teixeira, East Timor's head negotiator in the dispute, has been critical of Australia, which continues to issue drilling licenses for disputed seabed areas. He said East Timorese Prime Minister Mari Alkatiri was keen for the project to go ahead, but only if the proceeds are divided fairly between the two countries.

Australian Resources Minister Ian Macfarlane says the maritime border is still being negotiated.

Woodside owns 33.4 percent of Sunrise. Its partners are ConocoPhillips with 30 percent, Royal Dutch/Shell Group (RD) with 26.6 percent and Japan's Osaka Gas Co. with 10 percent.