For East Timor, energy riches lie just out of reach

[struggle4progress]

Tiny East Timor fought for nearly a quarter of a century to free itself from Indonesian invaders. Now, it is opening the next front in its war for independence: a struggle with this region's other giant, Australia, over lucrative oil fields critical to its economic survival.
When East Timor became the world's newest country just over two years ago, it needed immediate international life support. Almost a quarter of its population died over the course of a brutal 24-year civil war. Rampaging Indonesian forces burned about 80 percent of the territory's government buildings and economic infrastructure after its 800,000 people voted for independence in 1999.
Massive injections of foreign aid have kept the country afloat since 1999, allowing rebuilding to begin. But with almost no local industry -- the country booked just $6 million in exports last year -- East Timor's only hope of avoiding a grim economic future is to tap large oil and natural-gas fields that lie off the island's south coast.
But that plan has hit a surprising obstacle: Australia. Though it led the United Nations peacekeeping force that restored order after the 1999 violence, and has been one of East Timor's biggest aid donors ever since, Australia lays claim to most of the Timor Sea's energy fields. It cites a treaty it signed with the former Indonesian military dictatorship some three decades ago. That treaty also gives Australia control over the Timor Sea's biggest prize: a vast, underwater natural-gas field called Greater Sunrise, which holds oil and natural gas valued at an estimated $30 billion -- enough to completely transform the future for East Timor. According to the World Bank, 60 percent of the tiny country's population lives on less than $2 per day.
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http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/06/10/financial0858EDT0034.DTL