20040830 Timor-Sea-Petroleum-Exploration-over-the-past-40-years - GAMcKee.ppt

Timor Sea Oil & Gas “Teach in”
Presentation by Geoffrey McKee
Leichardt Town Hall, Sydney Australia.
Date: 30 August 2004
Time: 6-8 pm
Panel participants:-
1) Manuel de Lemos (Timor Sea Office – Dili) “the official line from Dili”
2) John Kaye (The Greens NSW Senate representative)
“the parliamentary campaign of Senator Bob Brown and Senator Kerry Nettle)
3) Geoffrey McKee – Oil & Gas industry Facilities Engineering Consultant, this speaker – as above
Panel chairman:-
Iggy Kim (Asia-Pacific networker from Timor Sea Justice Campaign)

Conference organised by:- Jefferson Lee, AETA (Australia-East Timor Association)

1. Timor Sea Oil & Gas
A 30 minute “background briefing”
on 40 years’ history of the Timor Sea sovereignty wrangle
from 1962 up to the signing of the Timor Sea Treaty 2002
by
Geoff McKee
at
“5 YEARS ON….a celebration of EAST TIMOR’S
INDEPENDENCE REFERENDUM”
Leichhardt Town Hall, August 30, 2004
Prepared by Geoffrey McKee • © G A McKee & Associates Pty Ltd • Oil & Gas Project Development Services • Sydney

2. Geoff McKee - August 04 Timor Sea - a background briefing 2
Speaker’s background…..
 1987 –1996 Timor Sea JV oil company
 1997 - now Oil & gas consultant
 2004 Guest lecturer, School of
Petroleum Engineering, UNSW
 INDEPENDENT PERSPECTIVE
(not aligned to any political party or oil company)

3. Geoff McKee - August 04 Timor Sea - a background briefing 3
 1998 – 1999: Timor Gap working group
reporting to through ETISC Darwin to JR
Horta
 2000: Petroleum-related Education &
Training for East Timorese (tender
preparation)
 2001 – 2002: Timor Sea concession dispute
(Oceanic Exploration/Petrotimor)
Perspective derived from……

4. Geoff McKee - August 04 Timor Sea - a background briefing 4
Photo by H T Lee, October 1999
In memory of Andrew McNaughtan
1954 - 2003

5. Geoff McKee - August 04 Timor Sea - a background briefing 5
Timor Sea Oil Exploration
When did it start?
 In 1962, Australia commenced
issuing exploration permits covering
the entire Timor Sea to the edge of
the continental shelf
 Portugal objected, claiming
jurisdiction to the median line

6. Geoff McKee - August 04 Timor Sea - a background briefing 6
KupangKupang
DiliDili
1
2
3
4
1
1
2
2
3
1962 First oil exploration permits issued by Australia

7. Geoff McKee - August 04 Timor Sea - a background briefing 7
KupangKupang
DiliDili
1969 Drilling commences in Australian permits

8. Geoff McKee - August 04 Timor Sea - a background briefing 8
“Well informed sources in Jakarta say
that Indonesia has already prepared
maps showing the boundary of it’s own
‘continental shelf’ as the median line
between Australia and Timor”
- Australian Financial Review
October 16, 1970
The continental shelf becomes an issue

9. Geoff McKee - August 04 Timor Sea - a background briefing 9
A17
A16
Portuguese Timor
Seabed boundary
agreed May 18, 1971
Seabed boundary
agreed October 9, 1972
1972 Australia celebrates “diplomatic coup”
Median line
(line of equidistance)
Seabed treaty signed with Indonesia

10. Geoff McKee - August 04 Timor Sea - a background briefing 10
Courtesy Woodside Petroleum, Mining conference, Dili, March 2003
1974 Woodside-Burmah-Shell permits
NT/P12NT/P12
NT/P11NT/P11
WA-36-PWA-36-P
NT/P8NT/P8
KupangKupang
DiliDili
Sunrise /Sunrise /
TroubadourTroubadour
1972
1972 Seabed
Seabed Boundary
Boundary
1972 agreed seabed boundary between Indonesia
and Australia coincides with northern limit of
Woodside’s 1963 exploration permits NT/P8 to
the west and NT/12 to the east.

11. Geoff McKee - August 04 Timor Sea - a background briefing 11
Map courtesy Oceanic Exploration / Petrotimor, Dili seminar, March 2002
December 1974 Portugal asserts sovereignty

12. Geoff McKee - August 04 Timor Sea - a background briefing 12
December 11, 1989 Timor Gap Treaty signed
“The Timor Gap Treaty is a pretty shonky piece of work that is
a by-product of Indonesia’s illegal invasion of East Timor and
Australia’s collusion with Jakarta over this”
Andrew McNaughtan, Sydney Morning Herald, April 13, 2000
After 10 years’ negotiation, Indonesia and Australia could
not reach agreement on a maritime boundary in the Timor
Sea, leading to a “Joint Development Zone”.

13. Geoff McKee - August 04 Timor Sea - a background briefing 13
First production of oil from BHP’s Elang-Kakatua
discovery under the (illegal) Timor Gap Treaty’s
permit ZOCA-12.
This was at a time when Australian activists began
to sense that independence for East Timor was not
a distant dream, but a real possibility due to
changing historical circumstances caused by the
decline of the Soeharto regime.
July 22, 1998
First production of oil from the Gap

14. Geoff McKee - August 04 Timor Sea - a background briefing 14
July 22, 1998
CNRT media release coincides with
first production of oil in the Timor
Gap
….designed to shift Australian
government perceptions through
adoption of a “pragmatic” approach.

15. Geoff McKee - August 04 Timor Sea - a background briefing 15
August 20, 1998 Sydney Morning Herald
….Andrew McNaughtan and ETISC arrange a
meeting that takes the Australian and Indonesian
governments by surprise, further changing
perceptions about the “Timor Gap problem”.

16. Geoff McKee - August 04 Timor Sea - a background briefing 16
January 13, 1999
Labor Opposition moves the goalposts….
ALP media release quantifies potential
revenue to East Timor and calls for ET
representation on the Joint Authority and
Ministerial Council

17. Geoff McKee - August 04 Timor Sea - a background briefing 17
8 September 1999
Dili burning
At the the Senate East Timor
hearings in Darwin
 Andrew McNaughtan and
Rob Wesley Smith interviewed by
shocked and confused Senators
 Jim Godlove of Phillips
Petroleum sticks to the main
game and undermines East
Timor pipeline vision for Bayu-
Undan

18. Geoff McKee - August 04 Timor Sea - a background briefing 18
April 1, 2000

19. Geoff McKee - August 04 Timor Sea - a background briefing 19
April 13, 2000
Headlines in Sydney
Morning Herald

20. Geoff McKee - August 04 Timor Sea - a background briefing 20
Professor Victor Prescott
University of Melbourne
•Generally confirmed
Timor Gap Treaty lateral
boundaries as lines of
equidistance
• notes small error in
eastern lateral (2 nautical
miles)
• Galbraith advised of
Jeffery Smith’s work
suggesting wider claims
for East Timor
June 14, 2000 Timor Sea conference in Canberra

21. Geoff McKee - August 04 Timor Sea - a background briefing 21
September 13, 2000

22. Geoff McKee - August 04 Timor Sea - a background briefing 22
November 24, 2000
Australia warns East Timor on
the lateral boundaries
2
nd
round of talks , Regent Hotel, Singapore
Australia:Michael Potts DFAT
John Hartwell, DSIR
Rebecca Irwin, AG’s
UNTAET Peter Galbraith
Mari Alkatiri
Jonathan Prentice

23. Geoff McKee - August 04 Timor Sea - a background briefing 23
February xx, 2001
Senior UNTAET Advisor
recommends declaration of
EEZ

24. Geoff McKee - August 04 Timor Sea - a background briefing 24
Peter Galbraith's powerful keynote address:-
 Issue of lateral boundaries publicly
raised by East Timor for the first time
 The finest expression of an
uncompromising “Justice Case”
 “As the product of an illegal occupation,
the Timor Gap Treaty is itself illegal”
9 April, 2001 APPEA Conference, Hobart

25. Geoff McKee - August 04 Timor Sea - a background briefing 25
April 23, 2001
Strident media reaction to Galbraith’s
address

26. Geoff McKee - August 04 Timor Sea - a background briefing 26
Sydney Morning Herald

Americans threaten to derail Timor oil talks
By Jane Counsel
PetroTimor's chief executive, Mr. Charles Haas, said the
company planned to lodge a statement of claim in the
Australian Federal Court within the next fortnight seeking
legal recognition of a 1974 exploration concession granted
over a large part of the Timor Sea.
June 26, 2001 Petrotimor takes a stand

27. Geoff McKee - August 04 Timor Sea - a background briefing 27
Dili
July 5, 2001
Timor Sea
Arrangement
agreed
…..Pragmatism prevails

28. Geoff McKee - August 04 Timor Sea - a background briefing 28
A17
A16
Laminaria-Corallina
Bayu-Undan
Evans Shoal
Greater
Sunrise
5 July 2001
Australia / East Timor ‘Joint Petroleum Development Area’

29. Geoff McKee - August 04 Timor Sea - a background briefing 29
July 6, 2001 Tax wrangle commences
Tax wrangle commences one day after signing the
Timor Sea Arrangement.
Opinion piece in the Sydney Morning Herald by
Mari Alkatiri and Peter Galbraith

30. Geoff McKee - August 04 Timor Sea - a background briefing 30
Offshore fiscal regimes
compared…..
State take
UK 31%
New Zealand 47%
Australian PRRT62%
Timor Gap ZOCA74%
Iraq 93%

31. Geoff McKee - August 04 Timor Sea - a background briefing 31
July 31, 2001
Bayu-Undan Participants Defer Offshore
Gas Pipeline Investment Decision
August 10, 2001
Shell floats LNG spoiler

32. Geoff McKee - August 04 Timor Sea - a background briefing 32
August 2001.
East Timorese “out-maneuvered” by Phillips Petroleum taxation wrangle

33. Geoff McKee - August 04 Timor Sea - a background briefing 33
October 10, 2001
UN personnel
banned from any
contact with
Petrotimor or
their associates

34. Geoff McKee - August 04 Timor Sea - a background briefing 34
December 21, 2001
Phillips Announces Agreement with East
Timor on Bayu-Undan Gas Development
“U-turn” by East Timor

35. Geoff McKee - August 04 Timor Sea - a background briefing 35
January 4, 2002
Petrotimor/Oceanic Exploration submit
proposed seabed delimitation proposal to Mr.
Mari Alkatiri and the transitional government
March 13, 2002
Meeting between Galbraith and Vaughan
Lowe and representatives of
Oceanic/Petrotimor

36. Geoff McKee - August 04 Timor Sea - a background briefing 36
March 22, 2002 Lowe-Carleton-Ward opinion released to
public in Dili seminar conducted by Oceanic Exploration

37. Geoff McKee - August 04 Timor Sea - a background briefing 37
Lowe-Carelton-Ward: Small Indonesian islands have big
impact on adjacent coast’s lines of equidistance.

38. Geoff McKee - August 04 Timor Sea - a background briefing 38
Oceanic Exploration commission pipeline study.

39. Geoff McKee - August 04 Timor Sea - a background briefing 39
Australia asserts seabed sovereignty outside the JPDA

40. Geoff McKee - August 04 Timor Sea - a background briefing 40
May 20, 2002
Independence Day
Timor Sea Treaty
Signed by Prime
Minister’s Howard and
Alkatiri