Dili - East Timor was thrown a multi-billion pound economic lifeline yesterday when it signed an agreement with Australia on the division of oil and gas reserves in the Timor Sea, which separates the countries.
After 15 months of tough negotiations, it was agreed that East Timor would receive 90 per cent of the royalties from the drilling, or $4 billion to $5 billion in the 20 years from 2004. In addition to its 10 per cent share of the upstream royalties, Australia is likely to make four to five times that figure from refining the oil and gas, as East Timor is not expected to build these facilities.