Tag Archives: oil and gas reserves

Australia as the Big Brother: the alleged spying on Timor-Leste

timor leste

The future finances of the young, poor nation of Timor-Leste, formerly East Timor, have become embroiled in allegations of skulduggery by Australia nearly a decade ago. Timor-Leste has taken its big, wealthy neighbour to arbitration over a 2006 agreement on the exploitation of oil and gas in the sea between them. Speaking on a visit to Singapore this week, Timor-Leste’s oil minister, Alfredo Pires, claimed to have “irrefutable proof” that, during negotiations in 2004, Australia’s secret services had illegally obtained information. His lawyer claims the Timorese prime minister’s offices were bugged. Whatever the truth, leaders in Timor-Leste feel Australia took advantage of them. In 2004 the tiny nation was still recovering from the devastation that followed its vote for independence from Indonesia in a UN-organised referendum in 1999. The Indonesian army and supporting militias had sought revenge in a rampage of killing and destruction.

Ever since, Timor-Leste’s hopes of prosperity have rested on offshore oil and gas reserves. But most are located in the Timor Gap, under waters also claimed by Australia. Cash-strapped and desperate for revenue to start flowing, leaders saw no option but to agree to treaties with Australia that many in Timor-Leste see as unfair. In all, three linked treaties covering the Timor Gap were signed, but the maritime boundaries were never agreed upon.

The first, the Timor Sea Treaty, signed in 2002, gives Timor-Leste 90% of the revenue from a Joint Petroleum Development Area (JPDA). This meant that revenues could start flowing.  The JPDA was a compromise between Australia’s insistence the maritime boundary be the deepest point as agreed with Indonesia in 1972, and Timor-Leste’s hope to use the “median line”, halfway across the sea. Only 20% of one of the largest fields, Greater Sunrise, is within the JPDA.

Then another treaty[Treaty between Australia and Timor-Leste on Certain Maritime Arrangements in the Timor Sea (CMATS)] was signed in 2006, after two years of tortuous negotiations, during which the alleged spying took place. This one gives each country an equal share of revenue from Greater Sunrise on condition that they waive their rights to assert sovereignty, or pursue any legal claim over the border, for 50 years.  It is this treaty that rankles with the Timorese. If the median line were the border, Greater Sunrise and many other fields would fall in Timorese waters. Mr Pires says that the uncertainty about the maritime boundary makes it hard to plan for the long term or to attract investment. Despite its growing oil wealth (its petroleum fund already contains $13 billion) Timor-Leste remains one of Asia’s poorest countries. It is pinning its hopes on the Tasi Mane project, an ambitious plan to build a gas plant to process gas from Greater Sunrise, and a refinery and associated petrochemical industry. That is a gamble as long as the sovereignty issue is unresolved and an impasse persists over the route of a gas pipeline from Greater Sunrise. Timor-Leste wants a pipeline to Tasi Mane to bring jobs and income. Australia wants a pipeline to Darwin. The bugging allegation and arbitration proceedings seem intended to force Australia to the negotiating table. Leaders in Timor-Leste hope to break the logjam and perhaps to win a better deal.

Timor-Leste and Australia: Bugs in the pipeline, Economist, June 8, 2013, at 44

Response of Australia

See also Australia in the Pacific

New Empires of the Oceans

 

Imperialism and oceanography often go hand in hand. The British Admiralty’s surveys of the world’s coastlines and shallow seas during the 18th and 19th centuries brought a wealth of scientific knowledge. They also did no harm to the ability of British merchantmen to navigate the world—and of British warships to dominate it.

Viewed from that perspective, China’s southern neighbours might be slightly nervous about a meeting held in Shanghai on January 26th and 27th, which gathered the country’s oceanographers (including several who work abroad) to discuss a project called South China Sea-Deep. As its name suggests, this project is intended to explore the South China Sea, a patch of water with an area of 3.5m square kilometres and a maximum depth of 5.5km that China’s government regards (despite competing claims from every other country with littoral waters there) in much the same way that ancient Romans regarded the Mediterranean: mare nostrum.

The scientists in question disclaim any intent to push back frontiers other than those of human understanding. They also say the project’s focus is on basic scientific matters rather than a search for things like oil and mineral resources. No doubt that is true—just as it is true that many who sailed under the Admiralty’s aegis were motivated by a thirst for pure knowledge. But knowledge is power, and if Chinese scientists are the first to explore the depths of the South China Sea, then Chinese businessmen will be better placed than others to exploit any commercially valuable finding that they make, and the Chinese navy will be better placed to defend them.

South China Sea-Deep is led by Wang Pinxian, of Tongji University in Shanghai, a doyen of the field. To assist him, he will be able to call on the services of Jiaolong, China’s latest deep-submersible vehicle which is designed to dive to a depth of 7km. Last July Jiaolong managed 3.8km. The craft’s handlers aim to push that to 5km this summer and to the full amount next year…. The budget for South China Sea-Deep is 150m yuan ($22m), to be paid for over the next eight years by the National Natural Science Foundation, a government agency based in Beijing. Nor is this China’s only oceanographic enterprise. A deep-sea technology centre in Qingdao will cost 400m yuan and a network of sea floor observatories similar to Canada’s Neptune programme and America’s Ocean Observatories Initiative will clock up another 1.4 billion yuan. Money well spent, no doubt, in the interests of pure research. Still, it cannot hurt, as Zhang Gongcheng, of the China National Offshore Oil Corporation, observed in his talk at the meeting, that the reserve of natural gas in the South China Sea is estimated at 200 trillion cubic metres. Pure research is all very well. But buttering a few parsnips at the same time can do no harm.

Excerpt, Oceanography in China: Who rules the waves?, Economist, Feb. 12, 2011, at 90