Oil riches to put East Timor back on its feet

By GREG ANSLEY

CANBERRA - The impoverished nation-in-waiting of East Timor yesterday secured billions of dollars in income from oil and gas beneath the ocean separating the former Indonesian province from Australia.

Two months before East Timor elects its first independent parliament and almost two years after the referendum that unleashed the devastation of pro-Jakarta militias, its negotiators have secured the rights to 90 per cent of the oil wealth of the Timor Sea.

Australia will also provide $3.8 million a year to help develop petroleum resources.

Royalties are expected to yield East Timor more than $9 billion in the 20 years from 2004, the only substantial income apart from aid that the new nation can expect in that period.

The sole export industry at present is a small trade in organically grown coffee, whose prices have been slashed by a downturn in world coffee prices.

Although a small adventure tourism business has sprung up since the United Nations took over administration from Indonesia, and the island is rich in history dating from Portuguese and Dutch colonial rivalry, large-scale tourism is unlikely to develop for years.

In the capital Dili yesterday, senior minister Mari Alkatiri and Australian Foreign Minister Alexander Downer celebrated with champagne after signing a new treaty on the exploitation of the Timor Gap.

The first treaty was between Canberra and Jakarta 12 years ago, splitting income from the 75,000 sq km exploration area.

New negotiations, conducted for Timor by former United States diplomat Peter Galbraith, began after Indonesia abandoned the province but bogged down in disputes over revenue-sharing and other details.

Feature: Indonesia

CIA World Factbook: Indonesia (with map)

Dept. of Foreign Affairs of the Republic of Indonesia

Antara news agency

Indonesian Observer

The Jakarta Post

UN Transitional Administration in E Timor

East Timor Action Network