East Timor tipping a deal on Greater Sunrise gas

East Timor is confident of finalising an agreement with the Australian government and Woodside Petroleum by early next year to develop the $71bn Greater Sunrise oil and gas fields.

East Timorese Prime Minister Xanana Gusmao. Picture: AFP

East Timor Prime Minister ­Xanana Gusmao is confident of finalising an agreement with the Australian government and Woodside Petroleum by early next year to develop the $71bn Greater Sunrise oil and gas fields.

Mr Gusmao made the comments in Indonesia, where he is attending the ASEAN leaders’ summit. He is to meet Anthony Albanese on Wednesday.

The 77-year-old former independence fighter told Portuguese-language news agency Lusa he believed the long-stalled development was close to being resolved and an agreement would be struck in the first half of 2024.

The former Portuguese colony, which won a hard-fought ­independence from Indonesia in 2002, is heavily reliant on natural resources but is expected to have spent down earnings from its Petroleum Fund within the decade.

“I am optimistic about an agreement in 2024,” Mr Gusmao said. “I am confident with this new Australian government.”

He told The Australian on Tuesday that discussions with Foreign Minister Penny Wong had strengthened his conviction Australia was ready to finalise the project. “I believe I can be confident as a result of these meetings,” he said. “She talked about how Mr Albanese was a supporter of our (independence) struggle before and that’s why I believe your PM also understands very well our needs.”

Mr Gusmao has made clear he sees the gas pipeline as an opportunity for Australia to make amends for its past poor treatment of East Timor, including its Timor Gap Treaty with Indonesia to divide the oil and gas spoils of the Timor Sea between the two nations. Dili has not forgotten Canberra’s attempts to opt out of a UN maritime boundary jurisdiction tribunal before East Timor gained independence, nor how the Australian Secret Intelligence Service bugged its ministerial offices in 2004 to gain advantage in negotiations over resources in the Timor Sea.

During a July visit to Dili, Senator Wong described the Greater Sunrise project as “unfinished business”, and conceded “past instances in which Australian governments have acted in ways that Timorese people, and many Australians, found disappointing”.

“Australia has only one ­ambition for Greater Sunrise: to see the field developed as soon as feasibly possible to support Timor-Leste’s development,” she said.

The Sunrise and Troubadour gas and oil condensate fields were discovered in 1974 but development has been held up by maritime boundary disputes, rocky bilateral relations and disagreement between Dili and its joint venture partners over whether the gas should be refined in Australia or Timor.

Mr Gusmao has pushed for the gas to be processed at an onshore LNG facility on the eastern side of the country – a plan Woodside previously maintained was uneconomic, saying the gas should be piped to Darwin. But in December, Woodside chief executive Meg O’Neill said the time was now “appropriate to reopen the concept evaluation” on the East Timor development option.

The recent Labor-Greens deal requiring new gas projects to be net carbon zero is also believed to have tipped the scales in favour of piping the gas to Timor.

East Timor controls about 57 per cent of the field, 450km north of Darwin. Woodside controls 33 per cent and Japanese company Osaka Gas 10 per cent.