Talks between Australia and East Timor on a framework agreement for the Timor Gap were stuck on three central issues, East Timor interim economics minister Mari Alkatiri said today.
He was speaking after a meeting Foreign Minister Alexander Downer and other negotiators from both sides that lasted more than two hours yesterday.
Dr Alkatiri would not elaborate on which issues were holding up progress in negotiations which are running down to a July deadline imposed by project developers in the Timor Gap.
But after recent improvement in the atmosphere of the talks and hopes earlier this week that today might conclude them, Dr Alkatiri was downbeat today.
“Being realistic, we are getting stuck now on the three main issues,” Dr Alkatiri told a media conference at the Timor Donors’ Meeting here.
“We’re still doing our best to have the agreements concluded by July 15 or even before.”
The revenue split is one crucial issue and Australia was stuck on an 85:15 split in East Timor’s favour while it is holding out for 90:10.
“We are very generous, we are ready to give 10 per cent from 100 per cent of ours to Australia,” Dr Alkatiri said.
Further talks will be held in Australia next week,. Mr Downer’s office late yesterday suggested talks would continue today, but the chief negotiator for Australia was not available, a source said.
East Timor believes that under
international law, all of the areas containing oil and gas reserves would
be in its area of control.
The new framework agreement, an interim deal to operate until a full Treaty could be negotiated with an independent East Timor, will be similar to the previous treaty between Indonesia and Australia.
Under the previous treaty, three zones of cooperation were drawn in the Timor Sea with Indonesia and Australia netting royalties from one zone each and splitting revenue 50:50 from the third zone.
East Timor’s budget will be heavily dependant on revenue from the Timor Gap for its recurrent funding when the planned projects come on line from 2004.
For East Timor, the royalties are crucial. Depending on how large the reserves actually are and on how fully they are exploited, Australia may be arguing over as little as$US5 million a year, according to some estimates of the area’s potential.
Mr Downer has said he wants to be generous to East Timor in the negotiations, saying Australia’s best interests would be served by a prosperous East Timor.
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