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Timor
Oil - In-depth Analysis
Analisis
yang mendalam tentang isu-isu minyak Timor
Lia hakerek Matenek kona
ba Timor nia Mina
O
Petróleo de Timor: o informação
updated: 23 Sep 2005
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to Main Contents:
BD: The 2004 TIMOR OIL Collection
NEW = Added to BACK
DOOR Website within the past month
Daftar isi / Contents:
Bahasa
diperbarui: 23/9/2005
* La'o Hamutuk, Institut Pemantau dan
Analisis Rekonstruksi Timor Lorosa’e
English
updated: 23 Sep 2005
* Geoff
McKee, Oil and Gas Engineer added: Apl 11, 2005
* La’o
Hamutuk, East Timor Institute for
Reconstruction Monitoring and Analysis
updated: 23 Sep 2005
* Mary MacKillop Institute for East Timorese Studies
English:
(Lia inglés / Bahasa Ingerris /
English language)
In-depth Analysis
Geoff McKee, Oil and
Gas Engineer
26 Mar
2005 McKee: How much is Sunrise really
worth?:
A revised potential revenue estimate for a disputed gas resource in the
Timor Sea
Analysis added 11 Apr 05
"Geoff's analysis shows
that, because crude oil prices have climbed dramatically since 2002,
the potential government revenue arising from a Sunrise gas project is
about four times higher than
the figures used by the oil companies and others. Geoff’s conclusions
are vital as they enable communities in East Timor,
Australia and elsewhere to appraise the actual value of the Sunrise gas
resource. Because Geoff clearly states his assumptions, these can be
used by ordinary people to evaluate the fairness or otherwise of the
Australian government’s offers to East Timor." Editor, Back Door
Newsletter
La’o Hamutuk, East Timor
Institute for Reconstruction Monitoring and Analysis
NEW La'o Hamutuk
Index
to Articles about Oil and Gas: http://www.laohamutuk.org/Oil/OilIndex.html
La'o Hamutuk Bulletins -
Timor's Oil:
Contents:
September 2004 The Case for Saving Sunrise
March
2004 East Timor Government's
Budget Deficit
March 2004
Avoiding the Resource
Curse
August 2003 Timor
Sea Oil & Gas
update
December 2002
Timor Oil Chronology
August 2002
Petroleum Conference in
Darwin
July 2002: Timor
Oil / International Solidarity
September
2004 The Case for Saving Sunrise:
http://www.etan.org/lh/misc/04sunrise.html
"[oil and gas] Stakeholders,
including oil companies, the Australian
government, international financial institutions and aid agencies, are
telling Timor-Leste what it should do, in light of their respective
interests. The most important stakeholder – the people of Timor-Leste –
would be best served by sequential, rather than simultaneous,
development of Timor-Leste’s two major petroleum fields, postponing
Sunrise development for at least a decade. This would allow time to
make wiser decisions, and would help Timor-Leste maximize its petroleum
revenues. Although neither Australia nor the oil companies currently
prefer this path, Timor-Leste’s government is responsible for the
long-term well-being of its own citizens, and that should be the
primary consideration. This paper presents the reasons for developing
Greater Sunrise after Bayu-Undan, saving Sunrise gas in the ground for
10-15 years, to maximize benefits for Timor-Leste." Submitted to the
government of Timor-Leste by Charles Scheiner, La’o Hamutuk 28 July 2004
March
2004 East Timor Government's
Budget Deficit:
http://www.etan.org/lh/bulletins/bulletinv5n2b.html
March
2004 Seven Ways to Meet East Timor's
Financial Gap
http://www.etan.org/lh/bulletins/bulletinv5n2.html#seven
" ... the real reason for the budget
shortfall is that East Timor has
been prevented from receiving revenues from the Laminaria-Corallina oil
field, which belongs to East Timor under the United Nations Convention
on the Law of the Sea principles. Australia has taken in more than $1
billion in revenues from Laminaria-Corallina, enough to cover the
budget shortfall eight times over." La’o Hamutuk
March
2004 Australia's Distortions:
http://www.etan.org/lh/bulletins/bulletinv5n2.html#distortions
"Australia’s
declaration in March
2002 excluding the settlement of maritime boundaries from compulsory
dispute resolution by the International Court of Justice and the
International Tribunal for the Law of the Sea, reflects our strong view
that any maritime boundary dispute is best settled by negotiation
rather than litigation. This is precisely the course of action that
Australia has now committed to in its discussions with East Timor on a
permanent maritime boundary."
Traci Williams, Third Secretary,
Australian High Commission, London
Reply: "The rule of law, including
impartial international legal
mechanisms for resolving boundary disputes, exists to protect the small
and weak from the predations of the rich and powerful, as well as to
support the entire community of states. By closing legal avenues of
appeal to East Timor, Australia hopes that “negotiations” between
unequal parties will follow the law of the jungle, or will drag on for
decades until Australia has harvested all the petroleum in disputed
territory." La’o Hamutuk
March
2004 Maritime Boundaries Slow in Coming:
http://www.etan.org/lh/bulletins/bulletinv5n2.html#maritime
"Just before the November talks, more
than 100 organizations from 19
countries wrote to Australian Prime Minister John Howard, urging his
government to set a firm timetable for establishing a permanent
maritime boundary within three years, and to treat East Timor “fairly and as a
sovereign nation, with
the same rights as Australia.” The
Australian government
replied that “the process [of
delimiting maritime boundaries] is long and complex. Based on this
experience, the Australian Government does not think it sensible to set
an end-date for the process.”
Australia also “has no plans to
revisit its decision in
March 2002 to no longer accept the jurisdiction of the International
Court of Justice and other dispute settlement mechanisms…”
Many Australian people feel otherwise, and have launched a Timor Sea
Justice Campaign, initially in Melbourne." La’o Hamutuk
March 2004
Avoiding the Resource
Curse:
http://www.etan.org/lh/misc/04curse.htm
"Timor Leste has some features which
could reduce the oil curse risk:
* Because Timor Leste is just
starting to exploit its petroleum
resources, we can learn from failures and successes in other countries.
...
* Timor Leste is fortunate that most
of our petroleum is natural gas,
since its price and market mechanisms are less unpredictable than oil.
...
* The people of Timor Leste are
fiercely committed to this country’s
independence, and will continue to struggle for its sovereignty and
rights, and to demand that their government serves the people’s
interest. Perhaps more than any other factor, this may help keep the
government in line. In addition, Timor Leste’s small size and effective
rumor communications infrastructure make it harder for illegal
activities or corruption to be conducted without exposure. ...
* Finally, the use of the United
States dollar as Timor Leste’s
currency frees the country from having to worry about inflation or
foreign exchange problems caused by oil money." Charles Scheiner, La’o
Hamutuk
August 2003 Timor
Sea Oil & Gas
update:
http://www.etan.org/lh/bulletins/bulletinv4n34.html
August 2003 Timor
Sea Historical Background:
http://www.etan.org/lh/bulletins/bulletinv4n34.html#background
"East Timor's economic independence
depends on the money the new nation
can earn by selling its natural resources, especially the petroleum
deposits which lie under the Timor Sea between East Timor and
Australia. These fields, which contain oil and gas worth more than
US$30 billion, lie closer to East Timor's south coast than to any other
land. However, due to a history of colonialism, invasion, occupation,
and illegal activities by Indonesia and Australia, East Timor could
receive less than half of the revenues it should be entitled to under
the principles of the United Nations Convention on the Law of the Sea
(UNCLOS)." La’o Hamutuk
August 2003
Boundaries and Petroleum
Fields:
http://www.etan.org/lh/bulletins/bulletinv4n34.html#boundaries
"Figures are taken from several
sources; they approximate the situation
at the end of 2002. The table shows that 32% of the petroleum resources
in the Timor Sea are on Australia's side of the median line, while 68%
are on East Timor's side. If we look at East Timor's rightful 68%
share, we can see that:
* Under the Timor Sea Treaty, East
Timor gives Australia 10% of the
JPDA (excluding Sunrise), or 3% of East Timor's total Timor Sea
resource share.
* Under the International Unitization
Agreement, East Timor gives
Australia 82% of Greater Sunrise, amounting to 48% of East Timor's
total resources.
* By refusing to negotiate a
boundary, Australia is taking an
additional 8% of East Timor's petroleum, west of the JPDA but which
would belong to East Timor under a median line boundary.
* Together, the two agreements
transfer nearly two billion BOE from
East Timor to Australia, resulting in East Timor's losing approximately
59% of its petroleum reserves. Although not shown in the table,
Australia has more than four times as much as the total Timor Sea
petroleum reserves in other areas." La’o Hamutuk
August 2003 Australia Blackmails East Timor:
http://www.etan.org/lh/bulletins/bulletinv4n34.html#australia
"Last night the (Australian) Prime
Minister used blackmail on East
Timor. . . . The motive of the Prime Minister last night was to coerce
East Timor, in terms of resources and money, through a threat to
withdraw this legislation if the East Timorese government did not agree
to sign the agreement today. ... We are debating today a piece of
legislation that will involve, according to the Minister for Foreign
Affairs, Mr. Downer, a $50 billion (U.S. $33 billion) break for
Australia from the development of the oil and gas fields which are
wholly within East Timorese waters, according to my interpretation and
the interpretations of a number of international jurists. ... This is
Australia being involved in a grand theft of the resources of our small
neighbour East Timor -- the most impoverished neighbour in the
neighbourhood having its one resource that is going to help it get up
off the ground in the future taken by its richest neighbour. ... This
is Prime Minister Howard, on behalf of the oil corporations, ringing
the Prime Minister of East Timor, Dr Alkatiri, and saying to Dr
Alkatiri, according to the Age report, 'If you do not sign
the agreement for the
development of the Greater Sunrise field' -- which is the
biggest field and which is East Timorese -- 'and give that
resource in the major part
to Australia, then we won't have this legislation go through the Senate
today,' which allows for the
development of the other, smaller
oilfield, which the East Timorese want to see developed." Green Party
Senator Bob Brown, during the debate on ratification in the Australian
Senate
August
2003 Sunrise Unitization Agreement Signed:
http://www.etan.org/lh/bulletins/bulletinv4n34.html#sunrise
"The Greater Sunrise gas field, ...
lies ... entirely on East Timor's
side of the median line between East Timor and Australia. It contains
nearly twice as much petroleum as Bayu-Undan, approximately $30 billion
dollars worth. ... If a permanent maritime boundary is eventually
agreed to, the Timor Sea Treaty becomes obsolete, and both countries
will "reconsider" the Sunrise IUA, although the oil companies'
contracts will not change, except for how their payments are allocated
to each country. If no boundary settlement is reached, the IUA remains
in effect forever and the Timor Sea Treaty lasts for 30 years, by which
time most Timor Sea petroleum will have been exhausted. ... Before the
Sunrise Unitization Agreement takes effect, it must be ratified by both
countries. ... East Timor ... is in no hurry to ratify the agreement.
The Dili Government ... could postpone this process to encourage
Australia to discuss maritime boundaries. Even after the agreement is
ratified, East Timor can still use its majority control of the
Designated Authority which governs the JPDA, to prevent Sunrise
development. Bayu-Undan will provide sufficient revenue for East Timor
from 2006 for two decades, and East Timor does not need Sunrise income
while Bayu-Undan is in full production." La’o Hamutuk
August 2003 Australia
Stonewalls on Boundaries:
http://www.etan.org/lh/bulletins/bulletinv4n34.html#stonewalls
"East Timor, as a new sovereign
country, is entitled to have its
boundaries in the land, sea and air. The nation began to define its
boundaries by enacting a Maritime Boundaries Law in October 2002. Since
East Timor inherited no national maritime boundaries, it needs to agree
on clear, permanent boundaries with its neighbors, Australia and
Indonesia. Each country should resolve this boundary through
negotiations and internationally-accepted legal mechanisms. ... Since
East Timor's independence, Australia's government has refused to
discuss the maritime boundary. In fact, Australia has been unfriendly,
blackmailing East Timor on the Timor Sea Treaty. In March 2002, before
the Timor Sea Treaty was signed, Australia withdrew from the mechanisms
of the International Court of Justice (ICJ) and the UNCLOS Tribunal for
impartial arbitration of maritime boundaries. This may have made it
impossible for East Timor to use international law to resolve the
dispute if negotiations fail. ... Australia's current policies continue
the colonial doctrine of terra nullius ("empty land") used by Europeans
to justify settling Australia two hundred years ago, seizing land and
resources from indigenous people who had lived there for millennia by
pretending they were not human or did not exist." La’o Hamutuk
August 2003
Glossary of Timor Oil
& Gas Terms Used:
http://www.etan.org/lh/bulletins/bulletinv4n34.html#glossary
BD: "This glossary is invaluable for
helping the reader through the
maze of acronyms. eg. BOE, EEZ, FTP, ICJ, JPDA, LNG, NGL, PSC, TSDA,
UNCLOS, ZOC"
December 2002
Timor Oil Chronology:
http://www.etan.org/lh/bulletins/bulletinv3n8b.html#Chronology
"27 Jan 1999: Indonesian president BJ Habibie
accepts East Timorese demands for an internationally-supervised
referendum on independence. Eight months of TNI/militia terror and
devastation ensue.
30 Aug 1999: East Timor's people vote
overwhelmingly to reject integration with Indonesia. Following massive
destruction by departing Indonesian troops, the territory comes under a
United Nations transitional administration leading to independence in
May 2002. ...
Nov 1999: Woodside's Laminaria-Corallina
project (which includes BHP and Shell) begins producing oil. The
companies extract more than 100 million barrels, about half the total
reserve, during the next two years, generating more than US$900 million
for the Australian government. Some or all this revenue should be East
Timor's if its Exclusive Economic Zone (EEZ) were drawn under UN Law of
the Sea (UNCLOS) principles.
29 Nov 1999: Mari Alkatiri, East Timorese
spokesman on the Timor Gap, says "we
still consider the Timor Gap Treaty an illegal treaty. This is a point
of principle. We are not going to be successor to an illegal treaty."
" La’o Hamutuk
August 2002
Petroleum Conference in
Darwin:
http://www.etan.org/lh/bulletins/bulletinv3n6a.html#Report
"The Timor Sea is an arena of
strategic struggles using political and
economic strength to promote different interests. For the Australian
government, the Timor Sea is an opportunity that must be pursued using
all political, economic and technological strength available. ... For
East Timor, the substance of the Timor Gap issue is the recognition of
its independence and national sovereignty by the international
community, particularly by its two neighbors, Australia and Indonesia.
Independence means that East Timor owns its national wealth, and has
the right to explore and maintain that wealth in accordance with
national and international legal principles. National sovereignty means
that East Timor has territorial rights over land, water and air in
accordance with national and international laws. As a small and poor
nation, East Timor must rely on moral strength, including international
solidarity, to balance the advantages of its powerful neighbor
Australia. East Timor must call on the international community to
respect East Timor as an independent and sovereign nation with its own
territorial rights based on international law." La’o Hamutuk
July 2002:
Timor
Oil, Solidarity:
http://www.etan.org/lh/bulletins/bulletinv3n5.html
July 2002 With Money, Oil Also Brings
Problems:
http://www.etan.org/lh/bulletins/bulletinv3n5.html
"Petroleum corporations are often
much more powerful than governments,
especially when large companies like Phillips or Shell come into small
countries like East Timor. The companies often determine the choice of
the Ministers of Energy, dictate the governments’ environmental
policies, and use the military to protect their investments. It is
impossible for a small government, even a democracy, to get a fair deal
from huge multinational oil companies. ... Although the companies claim
they are environmentally and socially responsible, they often lie. ...
Around the world, local indigenous, environmental and grassroots
communities and activists are dealing with these same issues, and often
the same companies. They have developed the Oilwatch Network to learn
from each other’s experiences and strengthen each other’s campaigns. By
using monitoring, advocacy, the courts, and public exposure of
information, Oilwatch members have averted environmental disasters and
forced oil companies to be more responsible to the people of the
countries they work in. As East Timor enters the community of
oil-producing nations, we can benefit from their expertise and
experience. Just as the oil companies work globally to maximize their
profits, people can cooperate globally to minimize the negative effects
of oil company operations." La’o Hamutuk
July
2002 Four-Fifths of Australia’s
Gas is Outside the Timor Sea:
http://www.etan.org/lh/bulletins/bulletinv3n5.html#Four-Fifths
"The oil and gas in the Timor Sea are the only significant petroleum
resources available to East Timor, and East Timor’s future depends on
these revenues. Australia, on the other hand, has four times as much
gas in other parts of its territory, as shown on the map below. Circles
show the location of Australia’s “Proven and Probable” (2P) reserves of
natural gas, where gas underground or undersea could be extracted and
sold." La’o Hamutuk
July
2002 Company Shares of Timor Sea Oil and Gas Fields:
http://www.etan.org/lh/bulletins/bulletinv3n5a.html
"The money to be made from Timor Sea oil and gas has attracted many
international petroleum companies to East Timor’s neighborhood. The
graph above shows which ones have purchased rights to sell the oil and
gas. Phillips Petroleum (USA), Royal Dutch Shell (Great Britain and the
Netherlands) and Woodside Australian Energy have the largest shares,
and they are operating the oil industry here [East Timor]." La’o
Hamutuk
July 2002 Annual
Revenues of Governments and Oil Companies:
http://www.etan.org/lh/bulletins/bulletinv3n5a.html
"Multinational oil companies are huge
and powerful institutions, larger than many governments. One way to
evaluate their power is to look at the amount of money involved in
their operations. The graph below shows how much money selected
governments and oil companies received (revenues, sales and taxes)
during 2001. For East Timor and the United Nations, the figures are
from their proposed budgets for 2002. The United Nations number
includes operations, administration, and peacekeeping everywhere in the
world." La’o Hamutuk
July 2002 Timor
Sea Oil Companies at a Glance:
http://www.etan.org/lh/bulletins/bulletinv3n5a.html
"The following brief summaries of
basic information and history describe the international oil companies
with the largest involvement in oil and gas developments in the Timor
Sea. [These are: Phillips Petroleum, Royal Dutch Shell, Woodside,
Santos, Osaka, Inpex, Kerr-McGee, Eni, PetroTimor] ...
* Money is given in millions of U.S.
dollars, according to each company’s Annual Report for 2001. “Assets”
is the amount invested in the company, “revenues” is how much they
received in 2001, and “profits” is how much was paid to the
shareholders (owners) of the company during 2001.
* Reserves are oil and gas still in
the ground, estimated in millions of Barrels of Oil Equivalent (mmBOE),
from annual reports and other sources. ...
* “Reserves in Timor Sea” shows the
amount each company owns of both East Timorese and Australian parts of
the Timor Sea oil and gas deposits.
* The “Timor Sea part of reserves”
percentage is an estimate of what part of each company’s worldwide
total gas and oil reserves is in the Timor Sea. It indicates
approximately how important the Timor Sea is to the company’s future."
La’o Hamutuk
July 2002 What do
East Timorese Activists Want from International Solidarity?:
http://www.etan.org/lh/bulletins/bulletinv3n5b.html#solidarity
"On 23 May 2002, La’o Hamutuk
sponsored a meeting with international solidarity activists and East
Timorese community activists to discuss: “What does
international solidarity mean for an independent East Timor?” At the meeting, all agreed that
international solidarity is still critically important, but it will not
be the same as it was in the past. A major goal of the meeting was for
international solidarity members to listen to East Timorese activists
describe their ideas about the new meaning of solidarity and the main
issues that need attention.
Four main priority areas were
identified for solidarity work:
* international justice and advocacy
for an international tribunal,
* economic justice,
* social development, and
* the exploitation of oil and natural gas in the
Timor Sea." La’o Hamutuk
About La’o Hamutuk:
http://www.pcug.org.au/~wildwood/lheng.html
Mary MacKillop Institute for
East Timorese
Studies
- Resources of the Timor Sea:
25 Sep
2004 MMIETS: Long
Term Consequences of Government Policy
Paper added 28 Sep 2004
"Here
is a paper I gave at
Politics in the Pub on 17.09.04. With the Timor Sea talks underway
between Australia and East Timor at the moment, it remains to be seen
what outcome there will be. I believe that regardless of what the
East
Timor Government accepts, there are issues of principle which
Australians should require that our Government fulfil.
These made up the terms of the recent petition:
1. That a fair and equitable boundary be set.
2. That Australia negotiates in good faith and in a timely
fashion.
3. That Australia returns to International arbitration.
4. That Australia stops benefitting financially from areas under
dispute.
(Please note that Australia has been receiving one million dollars a
day from an area claimed by East Timor. This amounts to nearly 2
billion dollars, ten times the amount we have spent there in aid.)
...
Australian policy is that we
benefit financially from areas which are under dispute, and that policy
has brought us nearly $2 billion since 1999. In discussing consequences
of this policy, it is both fair and proper
to consider the effects of the distribution of wealth. So whilst
I
argue that the ownership of the resources of the Timor Sea must be
determined only on principles of accepted law and customary practice, I
maintain that the dire need of the people of East Timor makes the
application of justice a priority. East Timor has gained its political
independence, but is not yet
economically independent. It is one of the poorest nations in Asia."
Sr. Susan Connelly, Spokesperson
on oil issues, Mary
MacKillop
Institute for East Timorese Studies (MMIETS)
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