Timor-Leste Oil Gas: New Maritime Treaty With Australia

On 6 March 2017, in New York, delegations of both countries signed, before the United Nations' Secretary-General and Portugal's former Prime-Minister, António Guterres1, the "Treaty Between the Democratic Republic of Timor-Leste and Australia Establishing Their Maritime Boundaries in the Timor Sea."

NEW MARITIME BOUNDARIES

The new maritime boundaries between the two countries represent, after almost 50 years, Australian's renounce to the geological criterion for the definition of the extension of continental shelves based on the natural prolongation of the landmass2 and follows the principle of delimitation by mutual agreement and in accordance with equitable principles, particularly, the delimitation is made by the application of the median line, roughly the southern boundary of the current Joint Petroleum Development Area (JPDA).

The dispute now hadended commenced in 1972 with the rejection by Portugal, then the colonial power over Timor-Leste, of Australian claim following the agreement reached between the latter and Indonesia in the "Seabed Boundary Treaty" thus originating, with the establishment of the maritime border between Indonesia and Australia close to the "Timor Through", a gap, the "Timor Gap", between points A16 and A17 (in the map below TA-1 and TA-13), where the overseas Portuguese territory of Timor and, afterwards, the territory of Timor- Leste, stands.

The new maritime boundary (illustrated here) is aligned with Timor-Leste's longtime public claims and a welcome outcome of the Compulsory Conciliation process initiated by the small half-island State against Australia in April 2016 under Section 2 of Annex V of the United Nations' Convention on the Law of the Sea.

PETROLEUM RESOURCES

Greater Sunrise

The Treaty establishes in its article 7 (as set out in Annex B) a special regime for the Greater Sunrise oil fields, instituting a "Special Regime Area" in which the Parties shall jointly exercise their rights as coastal States pursuant to Article 77 of the United Nations Convention on the Law of the Sea. This Special Regime will cease to be in force following the commercial depletion of the Greater Sunrise Fields.

The following is the depiction of the outline of the Special Regime Area and the Greater Sunrise Fields, used in the Treaty (for illustrative purposes only):

Article 2 of Annex B (Greater Sunrise Special Regime) lays down an upstream revenue share system (revenue derived directly from the upstream exploitation of...