A new multi-billion dollar oil and gas agreement between Australia and East Timor won't make the fledgling state rich but will give its people a chance to build a future, the territory's chief negotiator said Wednesday.
"Fundamentally this means the difference between being mired in poverty and dependent on foreign aid, and being able to make progress," East Timor's cabinet member for political affairs and the Timor Sea, Peter Galbraith, told
The agreement, struck late Tuesday, guarantees East Timor 90 percent of royalties from oil and gas reserves in the Timor Sea between the half-island territory and northern Australia, with Australia scoring 10 percent.
Galbraith anticipated future East Timor governments would use the money to "provide education for children, basic health care for the population, and continue rebuilding the country."
"The cabinet ... has taken a decision in which the royalties are put into a fund for the future and the tax revenues are spent," he said by phone from East Timor's capital Dili.
"This will not make the people of East Timor rich but it will give them a chance."
During protracted 12-month negotiations over the share of royalties, Galbraith had been critical of Australia's pitch for a larger share than the 10 percent they have settled for.
Under the original Timor Gap agreement between Australia and Indonesia, prior to East Timor's August 1999 vote for independence, Australia was to receive 50 percent of profits.
"They started out at 50 percent, then they went to 67 percent, then 75, 80, 85 and finally they went to 90 percent," Galbraith said of Australia's approach to renegotiations of the agreement with East Timor.
He stopped short of praising Australia for settling for 40 percent below its original expectations.
"I think the real point for the Australians is they knew they would get all the downstream benefits."
While East Timor could expect four to five billion dollars over the next two decades, "Australia will get, according to the Northern Territory government, 25 billion dollars in that same period from downstream," Galbraith said.
It was only "realistic" for Australia to accept a 90-10 percent split, he added.
"East Timor has had an open and shut claim to a mid-point maritime boundary and that would've given East Timor 100 percent of the oil and gas."
"In fact under international law this is very fair to Australia."
Galbraith said the Northern Territory was set to inherit downstream benefits in the form of a proposed LNG processing plant and a planned methanol plant, plus cheaper fuel for power generation, two planned gas pipelines south of Darwin and an aluminium smelter.
"Natural gas will replace the bunker oil used by the power and water authority in the Northern Territory," he said.
No such infrastructure is slated for East Timor, he added.
A study by the Northern Territory treasury predicted the agreement would "add 50 billion Australian dollars, or 25 billion real dollars, to its economy over 20 years," Galbraith said.
East Timor's foreign envoy, Nobel peace laureate Jose Ramos Horta, said the "historic" agreement would generate 208 million dollars over the next three years for the territory.
"Without this kind of money we would not be able to generate employment," he said.
The agreement will be signed in Dili on Thursday.
Galbraith and cabinet member for economic afffairs, Mari Alkatiri will sign for East Timor, with Australian Foreign Minister Alexander Downer and Industry Minister Nick Minchin flying in from Canberra to sign for Australia. |
