The Timor Sea Treaty is less a result of bullying than poor negotiations

We have not been helped by the secrecy from the East Timor government, which amongst other things effectively limited media scrutiny in the absence of their comments. The East Timor government also rejected good legal and strategic advice from well-disposed friends, so as a result the whole nation has lost out at this stage.

In all likelihood, Timor Leste could have achieved the 90/10 split without giving away to Australia the "carrot" of downstream benefits.

How can this situation be redressed?

The Bayu-Undan operator's development plans relating to a pipeline to Darwin and associated onshore LNG export facility dictated the timetable for ratification of the Treaty. If this project goes ahead, Timor Leste will lose all the downstream benefits from Bayu-Undan over which they have 90 per cent jurisdiction. This in itself is a big loss for Timor Leste and contrary to a nationalistic petroleum development policy. However, it is a great win for the Northern Territory of Australia, especially since it is made possible by subsidies from Timor Leste in the form of the December 2001 "Bayu-Undan Understandings Agreement".

Given that Timor Leste may have lost the infrastructure benefits from her Bayu-Undan resources, how can she redress the balance by achieving the same benefits from the much larger Greater Sunrise field?

The current Sunrise field operators have not yet settled on a development plan, and have not even secured an export market for the gas, so it is "early days". With appropriate knowledge, Timor Leste will be able to explore how she can attract infrastructure investment arising from the development of this field. This will involve the development of expertise on how onshore fiscal and taxation adjustments can provide the greatest rate of return on investment to the commercial operators, and the most competitive gas price for the customer.

A talk on this subject by Mr. John Imle, former president of Unocal, and delivered at the recent Mining & Energy Resources Conference in Dili (5 to 7 March 2003) is a positive development that indicates that infrastructure benefits are now understood and back on the agenda in Timor Leste, albeit at a very late stage. The conference organisers are to be praised for their courage in tackling this challenging nation-building issue that has been undermined in the past by proponents of the pipeline to Darwin.