AAP NEWSFEED
May 3, 2005, Tuesday

Stratfor says Aust managed to out-wait cash-strapped Timor
CANBERRA, May 3

Australia has managed to out-wait a cash strapped East Timor in reaching
agreement on lucrative Timor Sea oil and gas revenues, US-based strategic
thinktank Stratfor says.

In an analysis of the deal which is set to be finalised in Brisbane on May
11, Stratfor said Dili was always likely to cave in.

"Canberra has very squarely brought East Timor - a country it once aided in
gaining independence from Indonesia - to Canberra's mercy for its very
survival," it said.

Under the agreement, East Timor will receive compensation for a portion of
the oil development expected to come from the Timor Sea, in addition to the
revenue granted in previous agreements.

Australia and East Timor also agreed to postpone talks regarding the exact
settlement of maritime borders for an undisclosed period to bring back
investors scared away by the prospect of a border dispute.

Stratfor, which is based in Austin, Texas, said the months of negotiations
were little more than a waiting game.

"Australia had the bargaining position and financial resources to stall
until the smaller country buckled under financial strain," it said.

"The Timorese, needing fast cash flow, were forced to accept the
Australians' offer in order to survive, regardless of their position in the
sea boundary dispute."

Stratfor said the extended postponement of the territorial settlement gave
East Timor a glimmer of hope that at some stage, they might have sufficient
leverage to gain more of the territory.

"However, any ultimate deal probably will allow for the conflict to be
settled after oil and gas from the area already has been extracted, with no
chance of further profits for the Timorese and thus no reason for
conflict," it said.

"The Australians, on the other hand, can reap much quicker financial
benefits from the postponement as there is little reason for those
investing in the area to further delay explorations.

"Canberra also gets the bonus of additional strength to its security policy
in the near abroad and more solid relations with Indonesia."

Stratfor describes itself in its website as the world's leading private
intelligence provider, giving what is says is unbiased and accurate
analysis of global activities to individuals, corporations, and government
agencies.

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