THE EAST Timorese Government plans to construct a deep sea pipeline and petrochemical plant so it can develop around $107.94b worth of underwater oil and gas resources.
The Greater Sunrise field contains an estimated 300m barrels of light oil and 2.53 trillion cubic metres of natural gas and lies in territory disputed by Australia and East Timor. Either state cannot exploit the resources without the approval of the others. Both countries are currently disputing where these resources should be processed.
East Timor, granted independence in 2002, is one of South East Asia’s poorest country’s and is currently looking for ways to boost its fledgling economy.
However, Woodside Petroleum, Australia’s largest oil company, says the Timor Trough, a 3350m deep trench lying between East Timor and the Sunrise field makes it expensive and possibly impossible to build a pipeline running to the country’s shore.
The East Timor Government has commissioned US piping specialist DeepGulf to carry out a survey into the feasibility of such a pipeline. According to the company’s president, Marc Moszkowski, the current results suggest it would work.
Woodside and a number of companies hold a license to develop the Greater Sunrise field. They want to build a 530km pipeline to Darwin, where ConocoPhillips has built a six billion dollar processing plant.
The Timor Sea has been divided up into a complex system of revenue sharing zones with Australia. There is also no permanent maritime boundary between the two countries.
However, East Timor cannot have the boundary disputes heard in the International Court of Justice or the International Tribunal for the Law of the Sea because Australia obtained legal exclusions in the months prior to the declaration of independence.
Woodside says a pipeline to the country would undercut profits and expose the resources to its often fragile political situation. Australia maintains around 1000 peacekeeping troops across the nation.
The company says it and its partners will be prepared to consider the independent survey’s results when it is completed. Furthermore, the Australian Government says the location of the pipeline will ultimately be a commercial one.
The East Timorese Government is creating a commercial national oil company to invest the required funds for the pipeline. It says 15 companies from five nations have expressed interesting purchasing the resources.
The country which is ultimately chosen to process the resources will stand to gain an estimated $3.6b in tax revenue and a further $12b in sales.