"East Timor makes case for oil industry development"

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“JAKARTA, Indonesia (AP) — East Timor’s government has designated land to be developed into a regional petrochemicals hub, its top resources official said Thursday, in the latest push to bring disputed offshore oil and gas to its coast rather than to Australia.

The neighbors share proceeds from the Bayu Undan field in the Timor Sea, but there is disagreement about a larger, untapped field called Greater Sunrise, which contains about 300 million barrels of light oil and 8.3 trillion cubic feet of natural gas.

It is worth billions of dollars in commercial oil and gas sales and the country that hosts the processing facilities will also generate billions in tax revenue.

East Timor’s government has designated three towns in the southern part of the island to build a petrochemical processing plant, liquid natural gas facility and supply center, Alfredo Pires, the country’s state secretary for natural resources said Thursday.

“We feel quite strongly that for the people to benefit from these resources they need to be brought to our shores,” Pires told The Associated Press in a phone interview.

“The discussions will continue, but we are making our position known…We are not just the stakeholders, we are the owners of these resources,” he said.

Pires’s comments show the unwavering position of East Timor’s leaders and could set the stage for a standoff with a group of oil and gas companies led by Australia’s Woodside that could block short term development.

“Our commitment to this project makes it very difficult to reconcile any other agreement,” Pires, told an oil conference Thursday in a speech e-mailed to The Associated Press. “The development of Greater Sunrise will either transform our nation on shore or remain a distant dream for all of us.”

Woodside and its partners are licensed to develop Greater Sunrise and want to build a 530-kilometer pipeline running south to Darwin, where ConocoPhillips has built a $5 billion natural gas processing plant.

The group argues that technical studies concluded processing the resources in Australia is more commercially viable.

“It is possible to build a subsea pipeline from the Greater Sunrise reservoir to onshore Timor Leste, (but) it carries significant technical, cost and schedule risks,” Woodside said in a statement Thursday, using the country official name.

The studies concluded that a floating liquid natural gas facility or a pipeline to Darwin are “the best commercial and technical development options for Sunrise,” it said.

But Timor sees the resources as key to lifting its 1.1 million people out of poverty, by stimulating the local economy and creating jobs. The nation has no major industry and unemployment is more than 30 percent.

East Timor has around $5 billion in a petroleum fund that can be used to build infrastructure such as roads, ports and a power plant. But it is seeking outside funding of up to $10 billion to create the petrochemicals industry, Pires said in the AP interview. He said discussions are ongoing with several companies, but provided no names.

Under a current agreement, neither party can develop Greater Sunrise unilaterally.

Timor became Asia’s youngest democracy just six years ago after centuries of colonization, but faces challenges from decaying infrastructure and poor health, with roughly half the population living below the poverty line. (By ANTHONY DEUTSCH/Associated Press Writer)” (AP news)

One comment

  1. O Secretario de Estado para os Recursos Naturais, Alfredo Pires, participou numa Conferencia em Darwin onde fez um discurso sobre os planos do governo e parte do seu discurso mensionado neste artigo le-se:

    “(…)
    Ladies and Gentlemen

    Having shared with you our vision and plans for the future of the oil and gas industry in Timor-Leste ? I can not leave this very important forum without touching the issue of the Greater Sunrise field development.

    As you may appreciate the Greater Sunrise is one of the biggest gasfields in this region and in the Timor Sea. The field straddles between the temporary administrative jurisdiction where Timor-Leste and Australia explore jointly. The 20.1% of the Greater Sunrise is administered by the Autoridade Nacional do Petróleo, and 79.9% by the Australian regulatory authorities. Timor-Leste and Australia have agreed onto a treaty called Certain Maritime Arrangement in Timor Sea (CMATS) and the International Unitisation Agreement (IUA) that recognise that the area in Timor Sea is a disputed area, including the area of Greater Sunrise. Timor-Leste and Australia also agreed that no country will claim its sovereign right, nor exclusive jurisdiction over the area for 50 years. This is our understanding of the arrangements, and as such, the Greater Sunrise is essentially a joint exploration field, jointly administered, regardless of its apportionment ratio, temporary administration or revenue flow. Timor-Leste is committed to work under this frame.

    Ladies and Gentlemen

    Commercially, we have studied the economical viability of a Pipeline and LNG-Plant development in Timor-Leste for either 4 MTPA or 6 MTPA from any field in the Timor Sea, more specifically, the Greater Sunrise gas field.

    The Government studies, done in collaboration with third parties and world class independent service companies, have all confirmed the technical feasibility of bringing a pipeline which would cross the Timor Trough.

    We have also studied the risks associated with such an undertaking and came out quite confident with the assessment.

    The studies also show that the Greater Sunrise development to Timor-Leste is commercially much more viable than what we have been led to believe.

    Having shared with you all these, I now would like to reiterate the position of the Government of Timor-Leste on the development of the Greater Sunrise gas field.

    Firstly, all Treaties and Agreements that we have entered into with the Australian Government require that the development of the resources in the Timor Sea, including the Greater Sunrise, must be for the benefit of the peoples of Timor-Leste and Australia.

    One development in the Timor Sea, the Bayu Undan project has benefited the people of Australia through its infrastructures in Darwin. It is only fair that this time Timor-Leste will benefit from the development of infrastructures from the Greater Sunrise with an LNG-Plant in Timor-Leste.

    It is technically feasible;

    It is commercially viable; and

    It is legally merited.

    Maybe future generations could reconcile an alternative agreement, but our commitment to this project makes it very difficult to reconcile any other agreement than a development, pipeline and LNG plant based in Timor-Leste.

    The development of Greater Sunrise will either transform our nation on shore or remain a distant dream for all of us.

    Thank you very much. Obrigado

    Gostar

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