East Timor is one of the poorest countries in Asia. Its only economic hope for the future lies in massive reserves of oil and gas in the Timor Sea. But as small and young a state as it may be, it is certainly a nation of fighters. It’s now taking on some of the world’s biggest private energy companies, demanding they pay their fair share of tax on the oil & gas Timor says is being stolen from them.
While East Timor has tried to recover from years of instability, petroleum companies have taken the opportunity to effectively keep hundreds of millions of dollars from the East Timorese. “Around the world, multinational companies always fight for their interests and they fight tooth and nail, it’s their job, they have shareholders … What’s changed here is that Timor is fighting back,” says an advisor to the government.
Timor’s first task is to cut a deal with energy giant Woodside, that would see a pipeline and a gas processing plant built on the country’s southern shore. If that happens it would mean development, investment, construction and processing jobs, plus more money in taxes. There is a catch though. The company is playing hardball while the government claims the negotiations have involved bullying and double-dealing.
“Everybody says that for poor, under-developed countries, give them ownership, give them capacity to run their own business”, argues PM Xanana Gusmao. But far from being allowed to run their oil and gas resources, East Timor have floundered as another company, ConocoPhillips, built a secret helium plant and sent the gas to Australia. “How could we not be informed and be asked for our permission?”, Francisco Montiero, CEO of Timor Gas an Petroleum asks in disbelief. Recruiting a top US expert in international law to fight their case, the Timor government are determined to recoup their share, estimated to run to millions of dollars.
This is a contest the country’s leaders say they cannot afford to lose, because if they do they will consign an entire country to poverty. “All the babies that were born after the Indonesian occupation in 1999 are going to be looking for jobs. If there’s no economy that they can work in, it’s going to be a huge drain on society.”