Australia, East Timor reach agreement on maritime boundary

Australia and East Timor have reached a treaty agreement over their disputed maritime border as well as “a pathway” to develop the Greater Sunrise offshore gas fields in the Timor Sea, according to the Permanent Court of Arbitration in The Hague.

A statement released following talks in Kuala Lumpur last week said that under the agreement, the share of revenue from the offshore gas fields will differ depending on downstream benefits that arise from different development concepts.

The agreement will establish, for the first time, a single maritime boundary in the Timor Sea between the two countries.

The statement added that representatives of the two governments will meet Mar. 6 at the United Nations headquarters in New York to sign the new treaty.

The arrangement was set up last year following arbitration hearings in The Hague after which the court announced that agreement had been reached “on the central elements of a maritime boundary delimitation between them in the Timor Sea,” but that the details would remain confidential until the deal was finalized.

Speculation ahead of next week’s signing is that East Timor will receive as much as 80% of the revenue from the Greater Sunrise production, but that it could agree to less if the gas is piped north to a treatment plant in East Timor rather than to a floating facility near the fields in the central Timor Sea.

The Woodside Petroleum Ltd.-led Sunrise joint venture said it hopes the commission’s conclusions and the signing of the treaty will provide fiscal and regulatory certainty needed to develop the fields for the benefit of all parties.