Australia and Timor-Leste sign agreement to set maritime boundaries

8 March 2018

Australia and Timor-Leste (East Timor) on Tuesday in New York signed a historic treaty on the permanent maritime border that separates the two countries in the Timor Sea. The agreement puts an end to the more than a decade-long dispute over rights to explore oil and natural gas reserves in the Timor Sea.

The conflict dates back to 2002, en Timor-Leste gained independence from Indonesia after having been occupied by the country’s troops since 1975, when Portugal ended its colonisation of the territory. Since then there have been no permanent maritime boundaries defined in the sea shared by Timor and Australia.

At the time, both agreed that a temporary border would be established in the Timor Sea, but Dili would eventually claim that it was forced to endorse this “unfair” agreement, which gave more power to its Australian neighbours in controlling and accessing oil and gas reserves valued at tens of billions of dollars.

In 2016, Timor formally contested the temporary settlement in the Permanent Court of Arbitration in The Hague, opening the way to the treaty signed at United Nations Headquarters, a year after the mediation of the conflict, which defines a new maritime border in the Timor Sea in line with the United Nations Convention on the Law of the Sea.

The new agreement stipulates that Timor will receive at least 70% of the revenues of the largest oil well in the region, the Greater Sunrise, whose total value is expected to be around US$32 billion, revenues that until now have been split equally between the two nations.

In addition, Australia loses jurisdiction over the wells it currently shares with Timor Leste, whose economy depends to a large extent on the exploration of fossil fuels.

The option of a pipeline from Greater Sunrise to Darwin (DLNG) or to the south of Timor-Leste (TLNG), with Timor receiving 80% of revenues and Australia 20% in the first option or 70% and 30%, respectively in the second option, has yet to be decided. (macauhub)