East Timor: future site of gas competition?

Updated On: Jan 12, 2009

Indo-Chinese competition has moved into new areas what brings both of them up against other regional heavyweights. One such area is the potential newly-independent future ASEAN member of East Timor. Australia for example is the regional heavyweight in the region of Oceania.

Having been involved intensely with East Timor's independence from Indonesian annexation, Australia has been supportive of (or at least non-obstructive to) former President Xanana and former Foreign Minister/Defense Minister Jose Ramos Horta but former PM Alkatiri's socialist outlook was not acceptable to some Australian interest groups with interests in Timor Leste and Australia under the conservative Howard government was perceived as being increasingly uncomfortable with rumoured Chinese influence in East Timor and might have moved to contain Chinese influence courted by Alkatiri to balance Australian power.

India, however, has had greater success in moving into the East Timorese gas market. State-owned petroleum firms Indian Oil Corp (IOC) and Oil India Ltd (OIL) plan to pick up 12.5 percent equity in Mukesh Ambani-promoted Reliance Industries Ltd's (RIL) oil and gas block in East Timor which is spread over 2,384 sq km (In May 2006, Reliance won the bid to explore oil and gas in East Timor in May 2006) and will explore the offshore area in contract area 'K' that has proven reserves in the Australian North West Shelf and is adjacent to the Timor Sea.  

This area may be another future site of Asian power energy tussles, given the vested interests of big powers in this underdeveloped market. Offshore pipelines in addition to energy resources are likely to be become increasingly important. Thus, there may be a need to have more dialogues, cooperation and institutions to help reduce the possibilities of tensions and conflicts over underwater resources.


India PR wire, "Oil majors to buy into Reliance's East Timor block" dated 31 December 2007 in the Indiaprwire website [downloaded on 9 Jan 2009], available athttp://www.indiaprwire.com/businessnews/20071231/26350.htm.

Radio Televisaun Timor Leste, "Alkatiri urges legalisation on his position in gas and oil field deals" dated 8 Jan 2009 in the Nowpublic website [downloaded on 9 Jan 2009], available at http://www.nowpublic.com/world/east-timor-legal-news-8-january-2009

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