Australian Government at fault over Sunrise delay

The Howard Government’s policies on the Timor Sea are to blame for Woodside Petroleum’s decision to delay the development of the Greater Sunrise petroleum field in the Timor Sea, an Australian lobby group said today.

Woodside Petroleum announced on Friday that it had shelved plans to develop the huge Greater Sunrise natural gas fields in the Timor Sea citing fiscal and legal uncertainties.

“The blame for the shelving of this project must sit squarely with the Australian government.” said Tom Clarke, coordinator of the Timor Sea Justice Campaign.

“For the project to proceed, Woodside required legal certainty, based on the agreement of both the Australian and East Timorese governments. This agreement could only be reached through fair negotiations and through each country receiving its entitlement under international law. But sadly for everyone involved, Australia instead tried to bully East Timor into accepting billions less than it was entitled to under international law.” Clarke continued.

“The fact is that if boundaries were drawn in accordance with international law, most or all of Sunrise would belong to East Timor – after all, the field is 450km from Darwin but only 80km from the Timorese coast. But under the Unitisation Agreement that East Timor was forced to accept, 82% of revenues from Sunrise went to Australia, and just 18% to East Timor.” Mr Clarke added that, “No government would sign off on a deal in which it lost $10 billion of revenues it was entitled to – but this is precisely what Australia demanded of East Timor.”

In March 2003, East Timor was forced to sign the Greater Sunrise Unitisation Agreement after the Australian government threatened the development of the Bayu Undan field if agreement was not reached. The agreement gave 82% of the revenues from the field to Australia and just 18% to East Timor, despite the fact that the field is twice as close to Timor as to Australia.

The Unitisation Agreement was intended to be a provisional agreement, which would be superseded by permanent maritime boundaries set between the two nations. The agreement was undermined in November 2003, when it became clear that the Australian government was stalling on negotiations on permanent maritime boundaries.

Negotiations in 2004 continued to falter, as Australia insisted on the continental shelf principle, despite the fact that East Timor and Australia lie on the same continental shelf, and that the principle is outdated as a matter of international law. East Timor’s argument, based on the dominant median line principle, was that resources closer to East Timor should belong to East Timor, and those closer to Australia to Australia.

The Australian government further undermined the prospect of Greater Sunrise in March 2004 when it issued exploration licenses around Sunrise, despite the protests of the Timorese government.

The East Timorese Government has no international legal avenue for this dispute as two months before East Timor’s independence, the Howard Government preemptively withdrew from the jurisdiction of the International Court of Justice and International Tribunal on the Law of the Sea.

The Timor Sea Justice Campaign coordinator stated, “At the end of the day, the Australian government’s tactics of brinkmanship and bullying have cost jobs and development.”

For more information, please contact:

Tom Clarke
Coordinator of the Timor Sea Justice Campaign

PO Box 2949
Fitzroy
VIC 3065

0422 545 763
tom@timorseajustice.org

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