Re: East Timor/United Nations

[Yoshie Furuhashi <furuhashi.1@xxxxxxx>]

At 12:19 PM +0300 6/28/01, Keaney Michael wrote:
> Putting my cards on the table, I stand with Rob in his assessment that
> Gareth Evans is a major improvement on General Wiranto, and that the
> intensely worrying events still unfolding in West Timor ought to be
> attracting much wider attention than it ever has during this entire crisis.
> This, despite Evans' own prior complicity in the actions of Wiranto and his
> boss, Suharto, as he brokered the Timor Gap Treaty "entitling" Australian
> companies a large share of the spoils of whatever oil was recovered from
> East Timorese waters, effectively sealing the recognition of the illegal
> occupation of East Timor by Indonesia that in 1975 was so casually dismissed
> by the otherwise progressive Gough Whitlam as "an internal matter" for the
> Indonesian government.
> <snip>
> Evans, in his new guise as chief of the International Crisis Group (see
> http://csf.colorado.edu/pen-l/2001II/msg03042.html) is presently conducting
> a holding operation, trying to protect his Timor Gap Treaty in a clear
> conflict of interest that is being undermined by the UN's own Peter
> Galbraith. Of course you might expect Galbraith to be merely acting in the
> interests of his ultimate US masters in bringing under their control the
> spoils that would otherwise accrue to the Australians.

*****   Financial Times (London)
May 17, 2001, Thursday London Edition 1
SECTION: INTERNATIONAL ECONOMY; Pg. 10
HEADLINE: Hope for Timor Gap agreement GAS EXPLORATION EAST TIMOR AND
AUSTRALIA HAGGLE OVER RESOURCE-RICH WATERS:
BYLINE: By VIRGINIA MARSH and TOM MCCAWLEY
DATELINE: SYDNEY and JAKARTA

Australia and East Timor are edging towards agreement on a critical
new treaty to govern the Timor Gap, paving the way for development of
the substantial gas deposits in the resource-rich waters that divide
the two neighbours.

Speedy conclusion of the treaty is vital for East Timor - which in
late 1999 voted to secede from Indonesia - because revenues from the
developments will provide the impoverished new state with its main
source of income.

Based on exploration to date, the Timor Gap fields contain 500m
barrels of oil equivalent, worth some USDollars 17bn (Pounds 12bn) at
today's prices.

East Timor has a budget this year of USDollars 60m, is entirely
reliant on foreign aid and is being run by a United Nations-led
transition government (Untaet) ahead of elections for a national
assembly due later this year.

Negotiations on a new treaty began eight months ago and there has
been concern among oil companies working in the region over delays in
reaching agreement. But Peter Galbraith, Untaet minister for
political affairs and East Timor's chief negotiator in the talks,
said in an interview yesterday there had been "substantial progress"
in the negotiations.

Australian officials added that further talks were due to take place
in Dili, the East Timorese capital, next week.

After initially proposing to split revenues on a 60:40 basis,
Australia is now believed to be offering the state an 85 per cent
share. East Timor, however, is holding out for 90 per cent.

"If we had applied international law, we would have won 100 per cent
of the revenues," said Mari Alkatiri, a senior East Timorese official
involved in the talks. "We are negotiating to maintain a good
relationship."

Australia has been under pressure to give East Timor a far greater
share of the revenues to help the former Portuguese colony become a
viable, independent state.

Depending on the outcome of the negotiations - which also cover sea
boundaries - Untaet expects the fields to generate USDollars
100m-USDollars 500m in annual revenues a year, transforming East
Timor's economic prospects.

Gross domestic product in the territory is about USDollars 250 per
capita with most of its population living on subsistence farming. The
two sides are under pressure to agree a framework for the treaty by
early July to enable development of Bayu-Undan, the first field, to
proceed.

Phillips Petroleum, the US group that operates the field where
production is set to begin in late 2003, has a July deadline to give
the go-ahead for construction of a 500km pipeline to Darwin. It also
needs to finalise cornerstone supply contracts in the coming three
months, including a deal worth up to ADollars 7bn (Pounds 2.6bn) to
supply liquefied natural gas from the Timor Sea to El Paso, the US
energy group, mainly for use in California.

"This is not a new deadline. It was known nine months ago," said Jim
Godlove, the company's Darwin area manager. "The entire set of gas
export contracts could be jeopardised (if the treaty is not agreed in
time)." For more reports see www.ft.com/globaleconomy   *****

*****   Copyright 2001 PennWell Publishing Company
Oil & Gas Journal
April 9, 2001
SECTION: TRANSPORTATION; Pg. 62
HEADLINE: Australian LNG coming to California

Phillips Petroleum Co. and El Paso Corp. plan to deliver Timor Sea
LNG to southern California and Mexico's Baja California.

The two companies' subsidiaries signed a letter of intent last month
for El Paso's long-term purchase of LNG from a plant to be built by
Phillips near Darwin.

A definitive agreement, expected by midyear, will outline terms for
sales beginning in 2005, El Paso will market the 680 MMcfd of gas.

Estimated cost of the project, including the LNG plant, ships, and a
West Coast receiving terminal, is between $ 3 and $ 3.5 billion,
depending upon the size of the LNG plant, said Phillips.

The Darwin LNG facility, using Phillips' LNG technology, will be
supplied from the Greater Sunrise fields with reserves of 9 tcf.

Phillips and El Paso plan to develop LNG shipping and the receiving
terminal jointly. They are working with Mexican and US authorities to
select the site for the terminal and acquire permits for the
terminal, slated to go on stream in 2005. Existing pipelines will
transport the gas to customers.

The Phillips-El Paso announcement followed the increase of Phillips'
interest in the Greater Sunrise fields to 30% and finalization with
Shell Development Australia Pty. Ltd. and Woodside Petroleum Ltd. of
terms for development of Timor Sea gas resources (OGJ Online, Feb.
23, 2001).

Gas production from the Woodside-operated Greater Sunrise fields
could begin as early as mid-2006. Until then, Phillips-owned reserves
in Bayu-Undan will be used.   *****

Again, it doesn't look like a bad deal for the USA.

Yoshie