Australia, E. Timor sign oil deal
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SYDNEY, Australia (CNN) -- Australia and East Timor have signed a treaty on revenue-sharing from oil and gas fields in the Timor Sea that could potentially give East Timor an extra $4 billion.
The agreement also puts on hold for 50 years the claims by Australia and East Timor over jurisdiction and maritime boundaries in the Timor Sea.
East Timor, a former Portuguese colony that was forcibly incorporated by Indonesia in 1975, became an independent nation after a violent separation in 1999 that saw international troops called in to restore security.
It is one of the poorest nations in Southeast Asia, and has been eager to get a much-needed revenue stream from Timor Sea oil and gas fields such as the Greater Sunrise reservoir.
But commercialization of the fields has been delayed by disputes with Australia over boundaries and how to share government revenues flowing from the various projects.
Only 20.1 percent of the key Greater Sunrise reservoir, for example, falls within the joint petroleum development area set out in the 2002 Timor Sea Treaty interim agreement. The other 79.9 percent is in a part of the Timor Sea over which Australia claims exclusive jurisdiction.
Australian Foreign Minister Alexander Downer Downer and his East Timor counterpart Jose Ramos-Horta signed the treaty in Sydney Thursday.
Downer hailed the agreement, which he said was based on East Timor's proposal for a "creative solution" to revenue-sharing.
He said Australia had agreed to share equally with East Timor the upstream revenues from the Greater Sunrise reservoirs.
Once this project proceeded, he said it could result in East Timor getting as much as an extra $4 billion in revenue over the life of the field. This would increase East Timor's share of the resource to $10 billion.
Another field, Bayu-Undan, lies entirely within the joint development area. East Timor gets 90 percent of revenue from production inside the area, with a potential value of up to $15 billion.
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