THREATS by East Timor to invite Malaysia's state-owned energy company, Petronas, to develop the oil- and gas-rich Greater Sunrise field in the Timor Sea have drawn a rebuke from Canberra, with a reminder to Dili to abide by its "legal obligations".
Development of the $20 billion Greater Sunrise field faces potential delays over demands by East Timor for Woodside Energy to scrap plans for a floating platform to process the oil and gas and instead build a lengthy pipeline to shore.
At the weekend, the Gusmao government threatened to invite Petronas to undertake the development unless Woodside agreed to the pipeline plan.
But yesterday Resources and Energy Minister Martin Ferguson stepped in with a warning for East Timor.
"The Australian government has consistently maintained that the location of LNG processing is a commercial decision for the Sunrise joint venture," Mr Ferguson said.
"The Australian government is committed to the Timor Sea Treaty, the International Unitisation Agreement, and the Treaty on Certain Maritime Arrangements in the Timor Sea.
"As we have always said, we will carry out our obligations and we expect the Timor Leste government to meet its obligations."
The dispute has its origins in an earlier decision by Conoco-Phillips to build an LNG pipeline from its Bayu-Undan field to a processing facility in Darwin.
The project resulted in angry claims from East Timor that Australia was getting the main economic benefits from development of the Timor Sea.
Yesterday, senior oil industry sources played down Timor's threats to bring in Petronas.
"Despite what Dili is saying, I doubt Petronas would be keen to get in a stoush with big oil -- Woodside is 40 per cent owned by Shell," one executive said.
A spokesman for Woodside said while engineering and feasibility plans were under way, a final decision on developing Greater Sunrise was not expected until 2012.
Under a deal signed with the Howard government in 2007, East Timor and Australia agreed to share upstream revenues from Greater Sunrise 50-50, which could end up with both countries each receiving $10bn over the life of the project.