Alkatiri Tells Oil Chiefs: Sunrise Gas Must Be Piped To Timor-leste

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26th March 2009, 11:58am - Views: 759

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Media Release

Dili, Timor-Leste: Monday, March 24, 2009

Alkatiri tells Oil Chiefs: Sunrise gas must

be piped to Timor-Leste

FRETILIN party secretary general and former Timor-Leste Prime

Minister Dr Mari Alkatiri today told a high level delegation of

Greater Sunrise joint venture executives that gas from the Greater

Sunrise field must be piped to and processed in Timor-Leste.

Dr Alkatiri also warned that the Gusmao AMP government had seriously mishandled

the Sunrise negotiations by its secret dealings with third parties unconnected to the

Joint Venture.

Dr Alkatiri was speaking to journalists following his meeting in Dili today with

representatives of the Sunrise JV partners – Woodside, Shell, Osaka Gas and Conoco


“Governments will come and go, but we Timorese will continue to push for our right

to process Sunrise gas onshore. That was the whole point of our negotiations which

resulted in the signing of the Certain Maritime Arrangements on the Timor Sea

(CMATS) in January 2006 by the Australian and Timor-Leste governments,” he said.

“CMATS is specifically about Sunrise. If Sunrise does not go ahead then the

negotiations between the two countries are back to the drawing board. The oil

companies know that. The mechanism for reaching an agreement is set out in the

treaty and we believe the mechanism is sufficient to secure the pipeline and

processing in Timor-Leste. I told the companies exactly that,” Alkatiri said.

Since the CMATS Treaty was signed, however, the question of where the gas will be

piped to and processed remains unresolved.

Alkatiri said progress on this issue had stalled badly because of de facto Prime

Minister Gusmao’s incompetence in the negotiations and his unwillingness to

constructively and transparently engage with the principal stakeholders in the Greater

Sunrise field, namely the JV partners and the Australian government.

“The way things are going right now, a pipeline and onshore Timor-Leste processing

of Sunrise gas into Liquified Natural Gas will not occur within the next five years.

Negotiations have stalled. Gusmao has cut out the upstream partners totally in

developing the Timor-Leste onshore option. He has ignored their legitimate interest

and has engaged in ‘clandestine’ or ‘guerilla’ tactics by dealing with third parties.

“There is nothing wrong with involving third parties who might be interested in

investing in the downstream development of Sunrise. We were at a very advanced

stage of negotiations and of implementing an independent study before August 2008.

“However, secret deals are not the way to do it. And these deals are so secret that the

Timorese people and their representatives in parliament have been repeatedly denied

access to the details of the deals,” Dr Alkatiri added.

In June 2008, the de facto Secretary of State for Natural Resources, Mr Alfredo Pires,

confirmed to the parliament that agreements were signed with a consortium involving

South Korean and Chinese oil interests, and confirmed Malaysian involvement in the

pipeline study, but he would not make details or copies of the agreement available

because they were "confidential".

“This flies in the face of the transparent regime we built when in government,”

Alkatiri said. “We have no way of knowing whether what was given away was in

Timor-Leste's interests or whether it was legally and contractually appropriate.

“But that’s how Gusmao does things - secretly and with disdain for the parliament's

oversight role. Unaccountability has become Gusmao's modus operandi.

“There were no open tenders or other open competitive bid process as required by our

laws. Instead, without even speaking to the upstream partners, the Gusmao

administration gave the rights to market Sunrise gas to a third party - but for what

price and for what profit or benefit and on what terms?

“A right to build an LNG processing plant has also been granted, but for what return

and for what benefit to Timor-Leste we don’t know. What have these entities received

in return for becoming part of this ‘ghost army’ of Gusmao in his ‘clandestine guerilla

campaign’ against the Sunrise upstream entities?” asked Dr Alkatiri.

“Mr Gusmao seems fond of trampling on the constitution, on the rule of law, but long

after he and his cronies have gone, others will face the difficult task of rebuilding our

country’s sovereign risk reputation, which he appears likely to leave in tatters,” Dr

Alkatiri warned.

Alkatiri said FRETILIN would always fight for Timor-Leste's right to process Sunrise

gas in Timor-Leste.

“FRETILIN has previously put companies on notice that it did not recognize the

legitimacy of the AMP de facto government. They are all on notice that we will have

a legal and constitutional obligation to review on a case-by-case basis and then decide

whether to agree to be bound by the AMP's purported agreements.

“Our attitude will depend on whether such purported agreements pass the test of legal

and commercial transparency and legal efficacy. We owe that much to our people,

their interests and the rule of law in our country,” Dr Alkatiri concluded.

For further information: Mr Jose Teixeira MP

+61 438 114 960

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