East Timor May Not Ratify Gas Treaty, Stalling Woodside Project

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Dec. 6 (Bloomberg) -- East Timor said it may not ratify a treaty with Australia on sea boundaries and the split of revenue from oil and gas fields in the Timor Sea, stalling Woodside Petroleum Ltd.'s proposed $3.7 billion Sunrise gas project.

Australia and East Timor, which broke away in 2002 from Indonesia, Southeast Asia's biggest oil producer, said in August they expected to reach an agreement by Christmas. Australian Prime Minister John Howard won his fourth term in office on Oct. 9 and the two countries ended talks on Oct. 27 with no resolution.

East Timor's Foreign Minister Jose Ramos-Horta said in August ``Australia will give us a Christmas gift -- we were too excited,'' East Timor President Xanana Gusmao said in an interview in Bangkok. Ramos-Horta had since come to the conclusion ``it was only a game for the elections. I believe it's very difficult to reach any agreement.''

Don Voelte, chief executive of Perth-based Woodside, Australia's second-biggest oil and gas producer, has said the Sunrise treaty needs to be ratified by the end of the year to prevent the Sunrise project stalling for as long as a decade.

Bloomberg