East Timor receives first royalty payment from oil exploitation in Timor Gap
24 October -- East Timor has received its first royalty payment -- worth over $3 million -- from oil exploitation in the Timor Gap, a stretch of sea between the newly independent territory and Australia, according to a statement issued today in Dili by the United Nations Transitional Administration in East Timor (UNTAET).
"The revenue is better than expected," the UN mission said, noting the payment, which was deposited last Wednesday in an account of the Central Fiscal Authority, represents half of the money collected from production sharing between 25 October 1999 and 25 September this year.
The revenue was generated by the Timor Sea's only active oil field, which is shared jointly by UNTAET, on behalf of East Timor, and the Government of Australia. "The field is the only active oil field in the Timor Sea, and no other oil fields are expected to open anytime soon," the UN mission said, adding that the new funds were not expected to change the East Timorese budget in any significant way due to the "one-time nature of this windfall."
The current arrangement between East Timor and Australia on the exploitation of oil in the Timor Sea is being temporarily governed by the Timor Gap Treaty, an agreement signed between Indonesia and Australia, but not recognized by the UN. The Treaty is in the process of being renegotiated, in the hopes of creating a new treaty between Australia and East Timor.
"We do not recognize the Timor Gap Treaty since the United Nations believes that Indonesia should not have entered into an international treaty on the resources that belong to a territory of which it had no legitimate control," UNTAET chief Sergio Vieira de Mello told reporters yesterday while on a trip in Sydney. "I am convinced from discussions I have had with very senior Australian officials that it is possible to successfully conclude negotiations during the transitional phase, so that once East Timor becomes independent, it can sign a real treaty with Australia."
While in Australia, the UNTAET chief will meet with senior Australian authorities to discuss the situation in East Timor, including the establishment of a border control system and the question of East Timorese refugees in West Timor.
