14 May, 2005.

East Timor: Alkatiri labels report of Timor Sea accord an 'absolute lie'

Dili, May 13 (Lusa) - East Timorese Prime Minister Mari Alkatiri denied a report Friday that Dili and Canberra had reached a tentative agreement on the sharing of Timor Sea oil and natural gas revenues, labeling the Australian media report an "absolute lie".

"It's an absolute lie", Alkatiri told Lusa. There is no accord and, if there is one, in the terms announced by ABC, it would be totally against my orientations. And, thus, void".

Bilateral negotiations continued, Alkatiri said, adding that Dili's stance "remains unaltered".

"Let us negotiate at the table and not under the pressure of the media", he told Lusa.

Alkatiri+s vehement denial that an accord had been reached, ending a year of snail-paced negotiations, followed a report Friday on Australia's ABC television on-line edition that the two sides had reached a compromise solution, delaying discussions of their maritime border dispute in exchange for large payments to Dili from oil and natural gas operations in the Timor Sea.

ABC on-line said bilateral delegations, meeting in Sydney, had given their OK to a pre-accord based on a draft understanding reached in Dili on April 29.

According to the report, the agreement stipulates that the Timorese parliament must ratify the 2002 International Utilization Accord establishing the framework for operations in disputed areas of the Timor Sea, a document already ratified by Australian lawmakers.

The agreement, denied by Alkatiri, reportedly calls for East Timor to receive up to USD 5 billion over the next 30 to 40 years, while delaying a resumption of negotiations over the maritime border until 2065.

A draft accord would have to be approved by the Dili and Canberra
governments.

The alleged accord, as reported by ABC, reaffirms that Dili will continue to receive the lion's share - 90% - of revenues from a joint operations zone that is already under development.

The compromise agreement under negotiation has been described as arising from Alkatiri's recent challenge for the deadlocked parties to seek a "creative solution" for the economically crippling impasse.

Under the reported deal, payments to East Timor will depend on oil price fluctuations and the life of the offshore oil fields, but were set at up to USD 5 billion over the next three or four decades.

After the initial pre-agreement in Dili in April, Timorese Foreign Minister José Ramos Horta described the solution as a "significant advance", opening the way for "a new era in bilateral relations and economic cooperation".

The border dispute has held up development of the hydrocarbon- rich Timor Sea.

During the difficult one-year-old negotiations, Dili had insisted the border be set according to international norms halfway between the two countries coasts, a framework that would assure it most of the undersea resources.

Canberra, on the other hand, defended the current demarcation it agreed with Indonesia, East Timor's former occupier, one that gives weight to exceptional cases where the continental shelf is the determining factor.

EL/SAS.

Lusa

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