Tempo Semanal Edisaun 158a

PRH, Pires Determined for TL Pipeline

Comments by President Ramos-Horta and Secretary of State for Natural Resources, Alfredo Pires, indicate there are more gaps regarding the nation's natural resources than that which lies in the Timor Sea.

Timor-Leste's leaders are still at odds with foreign resources companies over the best way to exploit the Greater Sunrise oil and gas field.

Speaking to Tempo Semanal from New York last week, President Dr Jose Ramos-Horta said, "I continue to defend that the pipeline should come to East Timor".

"One pipeline [is] already going to Darwin from Bayu Undan, so this pipeline [Greater Sunrise] should come to East Timor. And if Australia is to be fair and wants to really have help neighbour like East Timor, wants a stable and prosperous neighbour, it should help East Timor with the pipeline, instead of trying take away the pipeline from East Timor to Australia," Dr Ramos-Horta continued.

The President dismissed fears that Timor-Leste was not stable enough for on-shore processing and export, saying, "This is total misinformation. East Timor is as safe as Australia and safe like any country."

While he did not comment on whether natural resource mismanagement may destabilise Timor-Leste in the future, Dr Ramos-Horta continued, stating, "There so many countries around the world where they have oil and gas that are much less safe than East Timor. Look at Nigeria and look at Iraq: are they are going to stop oil and gas exploration and production in Nigeria and Iraq?"

This position differs from that of Woodside Petroleum, the Australian company that leads the business consortium—which includes companies such as ConocoPhillips, Osaka Gas, and Shell—that intends to exploit Greater Sunrise.

A spokesperson for Woodside last week confirmed the company's ongoing position that it has abandoned the Timor-Leste pipeline option, and would decide between a floating Liquefied Natural Gas (LNG) processing facility (the first of its kind in the world), or a pipeline to Darwin by the end of this year.

"We will be pursuing the most commercially viable option for all parties involved," the spokesperson said.

The spokesperson could not reveal details about Woodside's non-Timorese processing plans or its position on national security if a pipeline was constructed to Timor-Leste, but said studies were currently being conducted to determine which of the two non-Timor-based options the company will pursue.

The spokesperson also stated that future negotiations would follow existing treaties regarding political and commercial involvement in Greater Sunrise.

The Timor-Leste Secretary of State for Natural Resources, Alfredo Pires, last week dismissed the Darwin pipeline option and continued to endorse constructing a pipeline to Timor-Leste, stating via SMS that, "It is technically possible, commercially viable and legaly [sic] merited".

Yet a February 2008 report by the Timor-Leste Institute for Reconstruction Monitoring and Analysis (La'o Hamutuk) cautions that there are more than just technical, commercial, or legal risks that a Timor-Leste pipeline presents.

The report (available at www.laohamutuk.org) is titled Sunrise LNG in Timor-Leste: Dreams, Realities and Challenges, and states, "… fragility and inexperience of state institutions, lack of human resources, inability to implement government programs [must] be overcome before a project like the Sunrise LNG plant can safely and effectively benefit current and future generations. Before companies will invest billions of dollars in a plant on our shores, they, their customers and our people must be confident that the facility will operate harmoniously for three decades or more".

The report states Timor-Leste's people need to be better-informed of their government's plans for LNG development; that adequate laws be implemented to safeguard land rights, environmental sustainability, traditional cultural values, accountable governance, and the rights of workers involved in an on-shore LNG plant; and that Timor-Leste's population be properly trained to work within such a venture.

The report recommended delaying construction until 2015 because these goals are yet to be achieved, in order to, "[give] us more time to prepare to receive its [Greater Sunrise's] benefits. Although these options may be less preferable for the companies, they would be better for Timor-Leste's people".

If the three- to six-year construction process doesn't commence until 2015, all involved parties still must agree on a development plan that incorporates this before the Certain Maritime Arrangements in the Timor Sea treaty expires in February 2013 (as stated in the accompanying illustration from Sunrise LNG in Timor-Leste). This gives the Government of Timor-Leste three-and-a-half years at most to demonstrate to the Australian Government and Woodside that it is capable of managing an LNG processing plant and associated activities in Timor-Leste.

Despite this, the Government of Timor-Leste is adamant that a pipeline to Timor-Leste can be viably managed. Last June, Mr Pires stated the Government was prepared to wait if

Woodside was not yet convinced of the Timor-Leste option, stating, "Right now if things don't progress and move in a fair manner, Timor-Leste will be pressured to take what I call the fourth option, which means to leave it [Greater Sunrise development] to future generations".

Relations with the Government of Timor-Leste and Woodside have been tested in the past, with Tempo Semanal's publication earlier this year of excerpts from a 2004 report by Norwegian company, Lucon A/S, which criticised the Australian company for misleading the Government of Timor-Leste into thinking the Timor-Leste pipeline option was unviable.

"[The National Petroleum Authority] feels that Timor-Leste option has not been given the right attention," Mr Pires said. "In particular now, we have studies from the side to proof that the Timor-Leste option is much more viable than what we've been lead to believe." 

TP Defends Stance and Promises Progress

The following is a statement made last week by Zeinal Bava, the president of Telecom Portugal. 

Telcom Portugal in a number of countries operates competitions. In all of those markets where we operate against other operators, we are leaders so we are not shy of competition.

What I can tell you is that we have a concession agreement. We invested in Timor when it was just become independent. So I think we have gone through the pains of social unrest and so on and so forth.

We have concession agreement which, in some extent, give us certain rights and certain responsibilities as well. And, as far as we are concerned, the strategic plans that we are announcing today provide the roadmap for the local government to judge our efforts against. And six to nine months from now if we are not able to deliver the result then I suspect we have to seat down with the government and discuss various options.

Having said that, as you know, the concept of competition in Telecoms goes well-beyond just having local competitor. Our competition increasing as the world wide web. So from that standpoint, in the years already a significant competition in Timor particularly in Internet site.

As you can imagine the content of my discussion with Prime Minister is private, so I will not share with you what we discussed. But what I can tell you is that we relayed to him exactly what I just told you that we are confident of the future outlook of Timor-Leste.

We are very confident of our own ability to deliver on the strategic plan. And this strategic plan—if implemented, and I think it will get implement well by us—will put Timor and will make Timor as a reference point in terms of network architecture and telecom performance in this region.