China Showers Gifts On Resources-Rich Timor

Dili's gleaming new Presidential Palace and Foreign Ministry, gifts from China, stand in stark contrast to nearby burnt-out buildings and are symbols of how the energy-hungry superpower is growing closer to tiny, oil-rich East Timor.

In the 10 years since the independence vote that led to a split from Indonesia, China has spent more than $53 million in aid to East Timor, also known as Timor Leste.

While that is just a fraction of the $760 million in Australian government aid, China has raised its profile in dusty Dili in several other ways.

It is building big and showing generosity such as its donation of 8,000 tonnes of rice during a recent food crisis. Noticeable projects such as a new Ministry of Defence building, houses for soldiers and schools are underway as are scholarships and training programmes for civil servants.

In all, China is sending a very public message that it is serious about strengthening bilateral ties with East Timor, which many analysts put down to its desire to diversify strategic energy interests.

Loro Horta, who is a China expert at Singapore's Nanyang Technological University and is the son of East Timor's President Jose Ramos-Horta, said that the aid is linked to China's desire for energy and infrastructure contracts.

"The Chinese are desperate for oil, every single drop for them counts and they are definitely looking to Timor as potential to meet that need," he told Reuters in a phone interview, adding that he estimated the total value of investments by Chinese companies in East Timor to be less than $400 million.

East Timor is one of Asia's poorest and least developed countries, but it has enormous oil and gas reserves.

The Bayu Undan gas field is expected to reap $12-15 billion by 2023, the country's Natural Resources Minister, Alfredo Pires, told Reuters in an interview.

Bayu Undan is already the subject of a deal between Australia and East Timor but other, untapped reserves still need development partners.

Another oil field, Kitan, has an estimated 40 million barrels of recoverable light oil, Pires said, and the Greater Sunrise field contains around 300 million barrels of condensate and 9.5 trillion cubic feet of gas, according to the United Nations.