• Hannah Phillips

Australia and East Timor Reach Agreement on Timor Sea

Australia and East Timor have reached agreement on a mutual seabed boundary that has been disputed for ten years and has stopped the exploitation of the $60 billion Greater Sunrise oil and gas field which is essential for Timor’s economic development.

The negotiations took place under the auspices of the Permanent Court of Arbitration which announced on Saturday that the neighboring countries had reached an agreement “on the central elements of a maritime boundary delimitation between them in the Timor Sea” – but that details would remain confidential until the deal was finalised.

The countries agreed to establish a special regime for the Greater Sunrise field, paving the way for its development and the sharing of the resulting revenue, the court said in a statement. “Until all issues are resolved, the details of the Parties’ agreement will remain confidential,” the statement said. “Nevertheless, the Parties agree that the agreement reached on 30 August 2017 marks a significant milestone in relations between them and in the historic friendship between the peoples of Timor-Leste and Australia.”

The leader of East Timor’s delegation, chief negotiator and former President Xanana Gusmão, hailed the agreement as a historic moment which would mark the beginning of “a new era in Timor-Leste’s friendship with Australia”. “I thank the Commission for its resolve and skill in bringing the Parties together, through a long and at times difficult process, to help us achieve our dream of full sovereignty and to finally settle our maritime boundaries with Australia,” Gusmão said.

The existing maritime boundary is aligned with Australia’s continental shelf, but East Timor has long argued the border should be half way between it and Australia - placing much of the Greater Sunrise fields under Timorese control.

Australia Foreign Minister Julie Bishop said the agreement was a “landmark day” in the relationship between Timor-Leste and Australia. “This agreement, which supports the national interest of both our nations, further strengthens the long-standing and deep ties between our governments and our people,” Bishop said.

One of the contentious issues between Australia and East Timor is where the oil and gas will be processed. The companies involved in exploration in the Timor Sea, Woodside, Conoco Phillips, Royal Dutch Shell and Osaka Oil and Gas have a preference for processing in Darwin but Xanana Gusmao believes that processing in Timor is essential for its economic development.

This matter is yet to be publicly settled.

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