AP Worldstream: Australian and East Timorese sign deal carving up undersea resources: Thursday 12 January 2006

Australian and East Timorese foreign ministers signed a treaty Thursday allowing the two countries to share billions of dollars in revenues from disputed oil and gas reserves beneath the sea that divides them.

In a statement, Australian Foreign Minister Alexander Downer said that the deal should clear the way for a project called Greater Sunrise to get underway that "could result in transfers of additional revenue to East Timor of as much as US$4 billion (A3.3 billion) over the life of the project."

The two nations will equally share the proceeds, the statement said.

"This is a win-win situation," East Timorese Foreign Minister Jose Ramos-Horta said.

The deal gives East Timor, a nation of 800,000 regarded as Asia's poorest country, a major source of revenue.

The country split from Indonesia in 1999 and gained formal independence in 2002. It is still heavily reliant on foreign aid.

Combined with an earlier deal covering another part of the Timor Sea resources, Dili could earn up to US$10 billion (A8.27 billion), Downer said.

The two countries also agreed to shelve for 50 years a long-running dispute over the Timor Sea maritime boundary that separates them.

Downer and Ramos-Horta signed the deal in Sydney, with their respective prime ministers John Howard and Mari Alkatiri looking, bringing to an end months of acrimonious negotiations.

However, Australian oil company Woodside Petroleum Ltd. and its partners in the Sunrise project, regarded as the richest prize in the Timor Sea, are still to decide whether they will start pumping oil and gas.

Woodside owns 33.4 percent of Sunrise, situated 150 kilometers (93 miles) south of East Timor's southern coast. Its partners are ConocoPhillips with 30 percent, Royal Dutch Shell PLC with 26.6 percent and Japan's Osaka Gas Co. with 10 percent.

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