Drilling East Timor: Australia's Oil Grab in the Timor Sea

By Scheiner, Charles | Multinational Monitor, January-February 2006 | Go to article overview

Drilling East Timor: Australia's Oil Grab in the Timor Sea


Scheiner, Charles, Multinational Monitor


AUSTRALIA, ONE OF THE LARGEST and most powerful countries in the Asia-Pacific region, recently legalized its thievery of tens of billions of dollars in resources from one of the smallest and weakest, according to critics of a new treaty.

The Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS), signed with East Timor (now known as Timor-Leste), provisionally resolves a bitter maritime boundary dispute between the two nations. The January deal allows Australia to exploit oil and natural gas under the Timor Sea--oil and gas that, absent CMATS, international law experts say would belong to Timor-Leste under current international legal principles and case law.

CMATS assigns some oil revenues to Timor-Leste, and improves on previous Australian offers. Hard bargaining by Timor-Leste's government, supported by grassroots campaigns in Timor-Leste, Australia, the United States and elsewhere, increased Timor-Leste's share of the Greater Sunrise gas field, twice as close to Timor-Leste as Australia, from 18 to 50 percent. CMATS also allows Australia to develop other undersea oil and gas reserves in previously contested areas, and Timor-Leste foregoes its right to a maritime boundary until all Timor Sea petroleum has been extracted and sold.

Many believe that if Timor-Leste, the youngest and poorest nation in Asia, had held out longer, it would have received a better deal. However, according to the U.S.-based East Timor and Indonesia Action Network (ETAN), the treaty "may be the best that could be achieved at this time, given the pressures on Timor-Leste from Australia and oil companies and the tremendous economic, political, size and other disparities in an inherently unequal negotiation process."

The East Timorese watchdog organization La'o Hamutuk (Timor-Leste Institute for Reconstruction Monitoring and Analysis) called CMATS "unjust." "It does not satisfy Timor-Leste's claim for sovereignty or our people's right to all the resources in our half of the Timor Sea," charges La'o Hamutuk. La'o Hamutuk is part of the East Timorese Movement Against the Occupation of the Timor Sea, which demands that Australia respect the new nation's rights and independence.

Indonesian military forces brutally invaded Timor-Leste in 1975. The subsequent 24-year occupation, supported by Australia and the United States, took more than 100,000 East Timorese lives. In 1989, Australia and Indonesia carved up East Timor's oil reserves, signing contracts with Shell, Phillips and other multinationals. Ten years later, a UN referendum ended the illegal Indonesian occupation of East Timor, which the Indonesian military and its militia turned into scorched earth before they left. In addition to post-conflict trauma and negligible economic development, the new nation is coping with rampant illiteracy, infant and maternal mortality, and preventable disease.

After a two-and-a-half-year transition, East Timor became politically independent on May 20, 2002. Three weeks earlier, Australia withdrew from international legal processes for resolving maritime boundary disputes. On its first day of independence, East Timor signed the Timor Sea Treaty with Australia, allowing oil projects begun under the 1989 treaty with Indonesia to continue uninterrupted.

"Since 1999, Australia has continued as an occupier for Timor-Leste's territory, acting on control over the Timor Sea that it obtained through a deal with the illegal Indonesian occupier," charges La'o Hamutuk.

The Timor Sea Treaty did not resolve ownership of Greater Sunrise, the largest field claimed by both countries, although it tentatively split revenues 18 percent for Timor-Leste and 82 percent for Australia. A year later, Australia and Timor-Leste signed an agreement to formalize this division. Australian Green Party Senator Bob Brown was expelled from the Senate when he accused the Prime Minister of "blackmailing" Timor-Leste to sign this agreement. …

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