Timor-Leste President Jose Ramos Horta has been pressing the Albanese government to somehow enable Woodside Petroleum to go forward with the development of the Greater Sunrise Gasfields and the processing of the gas on Timor-Leste’s south coast. He says that his country could turn to China if Australia doesn’t help. On September 23, 2023, Timor-Leste’s Prime Minister Gusmão signed a Comprehensive Strategic Framework with China, thus increasing the pressure.
On September 29, President Horta insisted that military relations were never raised by either China or Timor-Leste, even when the official Chinese announcement said that the agreement included “military exchanges”.
But on October 9, the ABC reported President Horta saying that China shied away from Timorese military requests: “He also said that Beijing had deliberately turned down opportunities to help develop defence infrastructure for fear of Australian ‘sensitivities’, and out of ‘respect’ for Canberra’s desire to maintain its primacy as a security partner in the Pacific.” Thus President Horta keeps pressing the buttons of the Australian securocrats, who, for example, continue to claim that the Solomon Islands security agreement with China is a threat.
President Horta ended that interview on an upbeat note: “I don’t enter into details because this is up to Prime Minister Gusmao and Anthony Albanese, but we are going to find, very soon, early next year, a solution for the development of Greater Sunrise.”
Yet there is little evidence to support this hope.
On October 18, 2022, the Albanese government appointed former Victorian Labor Premier Steve Bracks AC as Special Representative for the Greater Sunrise project. “Mr Bracks will represent the Australian Government and consult with the Government of Timor-Leste and other key stakeholders, including the Sunrise Joint Venture,” said Foreign Minister Senator Penny Wong.
“The Australian Government wants to see the development of Greater Sunrise in a commercially viable way that supports the economic development of Timor-Leste and maximises the benefits to all parties, consistent with the 2018 Maritime Boundary Treaty.”
But Greater Sunrise has stayed in a holding pattern. According to the Woodside Energy 2022 Annual Report, the Sunrise Joint Venture (SJV – Timor Gap, Woodside Energy, Osaka Gas) and Australian and Timor-Leste Governments held two further Greater Sunrise trilateral meetings in 2022 to progress a new production sharing contract (PSC). Subsequent to the quarter, retention lease renewals were granted for Australian titles NT/RL2 and NT/RL4. Woodside is operator and holds a 33.44% participating interest. (p 29)
According to the Woodside Energy First Quarter 2023 Report, in February 2023, the SJV committed to undertake a concept select program for the development of the Greater Sunrise fields in parallel with the still ongoing negotiation of a new PSC and associated agreements with the Timor-Leste and Australian Governments. (p 4)
If Gusmão somehow gets the SJV moving, and its associated onshore petroleum industry – the Tasi Mane project, he will be spending at least US$26 billion. The Timor-Leste Petroleum Fund at about US$19 billion today, would be fully committed plus borrowings, and the State Budget would be in trouble.
President Horta is now saying that the decision to develop Greater Sunrise must be taken now, to enable it to come into production by 2030, to avoid a financial cliff.
According to the Timor-Leste State Budget, under the current spending trajectory, with the Bayu-Undan field now exhausted, there is a risk that Timor-Leste will hit a fiscal cliff in 2034, at which point around US$1.6 billion worth of spending cuts may be necessary. This would result in a large shock to GDP, likely resulting in large rises in unemployment and large falls in incomes, the provision of public services and the living standards of most citizens.
While hints at Chinese military interest in Timor-Leste provoke instant reaction in Australia, the US Department of Defence in 2021 quietly committed to extend the runway at Baucau International Airport, and in 2023, the US held its first joint military exercise with the Timorese military (F-FDTL) in July – August that year, starting at Baucau.
The new Gusmao government is also persisting with its decision to terminate all short-term civil service contracts for FRETILIN members, when these contracts are concluded in December. This impacts on 15,000 employees. There are reports that they are not being paid in the meantime.
On the local political front, elections are being held for Suco Chiefs on October 28, 2023. A Suco is a local government area covering several villages. There are 461 Sucos in the 12 Districts of Timor-Leste, with elections due in 442 of them. The candidates contest these elections as independents, even if they are members of the two main political parties, CNRT and FRETILIN. These elections play a role in the build-up to the next legislative elections due in 2028.
Peter Murphy is a Sydney-based freelance journalist and human rights advocate on Timor-Leste and the Philippines.