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'East Timor to renegotiate oil, gas treaty'

SINGAPORE: East Timor wants to renegotiate an existing joint oil and gas prospecting treaty, which dictates the development of resources in the Timor Sea, with Australia, independence leader Jose Ramos-Horta on Sunday.

"We honour the terms of the (Timor Gap Zone of Cooperation Treaty) temporarily until independence and then we will have to look into ways to adjust the treaty to East Timor's interest," he told Reuters on arriving in Singapore for a two-day visit.

The treaty would be reviewed in two years, he added.

In the meantime, the United Nations Transitional Authority (UNTA) has started managing the East Timor share of the Timor Gap oil and gas resevers, taking over from Indonesia, he said.

The UNTA will manage the treaty and oil revenue for the next two years.

The treaty was originally signed in the early 1990's by Indonesia and Australia to develop hydrocarbon resources that lie in basins straddling the two countries' seabed boundary.

Ramos-Horta also said that Phillips Petroleum Co had been assured of its interest in the Timor Gap concession and told to carry on the proposed oil and gas development.

Phillips plans to develop the Bayu-Undan gas field in the Timor Gap, with first production set for late 2003 or early 2004. Studies are underway to export the gas through a pipeline to Australia.

Phillips is currently producing about 15,000 barrels a day of oil from Timor Gap's Elang, Kakatua and Kakatua North oil fields.-Reuters