Lindsay Murdoch, Dili – A US court has cleared the way for the hearing of a challenge to the rights over the Timor Sea's vast oil and gas reserves.
Lawyers for oil explorer Oceanic Exploration are preparing to take the company's claim against US-giant ConocoPhillips to the US District Court in southern Texas.
Oceanic is challenging ConocoPhillips' rights to 6 million hectares that include the huge Bayu-Undan field that has already given East Timor more than $US1 billion ($A1.26 billion) and is expected to earn up to $US15 billion for the impoverished nation.
Under the Timor Sea Treaty that Australia and East Timor signed in 2002, East Timor is entitled to 90 per cent of the area's petroleum production.
Oceanic claims an agreement with East Timor's former ruler Portugal in 1974 gave its subsidiary Petrotimor exclusive rights to the Joint Petroleum Development Area that includes Bayu-Undan.
The company claims in US court documents that ConocoPhillips stole the concession by bribing Indonesian and Timorese officials over 30 years.
Oceanic claims ConocoPhillips made more than $US2 million cash and other payments to Timorese officials, including former prime minister Mari Alkatiri.
Documents allege millions of dollars was lodged in two bank accounts in Darwin in 2002. Mr Alkatiri and ConocoPhillips deny the claim.
The case has attracted little publicity as it has moved slowly through the US court system for three years. But the US District Court of Columbia brought the case closer to conclusion when it ruled this month that the case should be heard in the District Court of Southern Texas near ConocoPhillips' Houston headquarters.
In a 12-page ruling obtained by The Age, Judge Emmet Sullivan said that in transferring the case from Columbia to Texas he took into consideration the convenience of Australian witnesses.
Oceanic has indicated it will call at least 70 witnesses.
Judge Sullivan said he also decided to order the transfer, which ConocoPhillips requested, in part because "any alleged wrongdoing that occurred in the United States emanated from the Houston headquarters". The District Court of Columbia last September dismissed some legal grounds upon which Oceanic had lodged its claim. But the court denied ConocoPhillips' motion to dismiss the case.
East Timor and Australia last week ratified a pact to split revenue in Greater Sunrise, another field in the Timor Sea that could reap $US10 billion for both countries.
Under the pact, Australia and East Timor agreed to put on hold for 50 years claims to jurisdiction and maritime boundaries. ConocoPhillips is one of the developers of Greater Sunrise, which Woodside would operate if the venture partners decided to push ahead with the project, which has been frozen since 2004.