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 Dili, 9 December 2005

Prime Minister says that Timor-Leste and Australia have achieved a win:win

Timor-Leste’s Prime Minister, Mari Alkatiri, today said that the agreement achieved last week by the Government of Timor-Leste and Australia governments about the petroleum resources on the Timor Sea was very positive indeed: “This is a good agreement for Timor-Leste but it is also a good agreement for Australia”, stated the Prime Minister.

Mari Alkatiri added: “This agreement also opens the way for the construction of a pipeline between Greater Sunrise and Timor-Leste and for the installation of a refining facility that will be the starting of petroleum activities on Timorese soil.”

The head of the Timor-Leste Government spoke publicly today for the first time about the agreement reached on Tuesday, 29th November, in Darwin, between the technical delegations of both Governments.

According to the Prime Minister, the agreement, which will be signed on the 12th January 2006 at Sydney by the Foreign Affairs ministers of both countries, in the presence of both Prime Ministers, is without prejudice to the positions and claims of both countries in respect of maritime boundaries: “Timor-Leste has not compromised its legal claim and legal position in respect of the question of maritime boundaries. This agreement takes account of the essential interests of both Timor-Leste and Australia.”

As Alkatiri explained, the “Timor Sea Treaty”, under which petroleum development is already underway in Bayu-Undan, will continue without change. Timor-Leste will continue to receive 90 per cent of the revenues from the joint development area.

At the press conference, the chief of Government reflected upon the starting point of the negotiations. In 1999, the agreement with Australia awarded Timor-Leste 50 per cent of the revenues of an area that was the same as the Joint Petroleum Development Area (JPDA), including some 10 per cent of the Greater Sunrise. “Today, we receive 90 per cent of the revenues of the JPDA, and with this new agreement, we will receive a total of 50 per cent of the Greater Sunrise”, he added.

Said Prime Minister Alkatiri, this solution is the best outcome for Timor-Leste. The result of a court case is never certain: “First, these agreements with Australia offer certainty of result, and no one can affirm that the result of the court case would be better. Second, a court case would take years to finish – in the meantime there would be little that Timor-Leste could do to protect the resources.” “The instability that would exist for years could seriously damage the investment perspectives, thus potentially compromising the social-economic development of Timor-Leste.”

On the economic level, the Prime Minister said that this deal would put into place a framework that allows a second major petroleum development in this area – that of the Greater Sunrise.

Strategically speaking, this is crucial in terms of planning of Government revenues from the petroleum sector. At the moment, Timor-Leste is dependent almost exclusively on only one project – Bayu-Undan. Under this deal, it is expected that the Greater Sunrise will go ahead and start producing approximately halfway through the production cycle of Bayu-Undan. “The long-term, steady inflow of revenues into our Petroleum Fund will offer conditions for long-term planning and investment, as we strive for the sustainable development of our country. That is our key goal”, said the Prime Minister.

This Press Conference took place before the Prime Minister’s departure to Cuba, where he is making an official visit from 11th to 13th December.

For further information please contact the Media Advisor: Rui Flores (tel. +670 723 01 40) or

The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)
Institutu Timor-Leste ba Analiza no Monitor ba Dezenvolvimentu
Rua D. Alberto Ricardo, Bebora, Dili, Timor-Leste
P.O. Box 340, Dili, Timor-Leste
Tel: +670-3321040 or +670-77234330
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