Australia and East Timor will sign a treaty next week to divide oil and gas reserves under the Timor Sea, the government said Friday.
"It is my intention to sign the treaty with the East Timorese government," Prime Minister John Howard told Australian Broadcasting Corp radio.
In a statement, Foreign Minister Alexander Downer said the treaty would not include agreement on how revenues from the disputed Greater Sunrise oil field -- believed to be the region's biggest -- would be divided.
Instead, a memorandum of understanding will be signed setting up a process by which the negotiations over Greater Sunrise can continue. "The treaty and related documents will open the way for major oil and gas development in the Timor Sea," Downer said.
Howard will sign the treaty and memorandum in East Timor on Monday, the day that the former Indonesian territory will celebrate its formal independence.
Australia negotiated the treaty agreement last year with UN officials. The accord will replace a similar treaty Australia had with Indonesia when it ruled East Timor.
The impoverished country is desperate for revenue to help rebuild infrastructure destroyed by pro-Jakarta militias after its people voted to secede.
Howard dismissed the suggestion that the treaty favored Australia, saying it had been "extremely fair" in its negotiations with the East Timorese.
The area between Australia and East Timor is rich in undersea oil and gas reserves. Most is on the Australian side of their maritime boundary, but about 30,000km2 have been designated as a "joint development zone."
Royalties from the zone are to be split 90-10 in East Timor's favor.
But the Greater Sunrise oil field, reputed to hold the largest reserves of all the fields, straddles that zone, lying 80 percent in Australian waters and 20 percent in the joint development area.
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