Rick Wilkinson
OGJ Correspondent
MELBOURNE, May 17 -- Australia and Timor Leste (East Timor) have reached an accord over petroleum production sharing in the controversial Timor Sea boundary demarcation issue between the two countries.
Australia has offered Timor Leste a 50% share of the royalties from the proposed development of Woodside Petroleum Group's Greater Sunrise gas-condensate field. It originally offered 18%.
In return, Australia has asked Timor Leste to postpone any final settlement of the maritime boundary between the countries for 50 years.
The deal, yet to be ratified and signed by the Timor Leste and Australian parliaments, will give Timor Leste a gain of $2-5 billion (Aus.) over the original arrangement.
Australia has insisted that the maritime boundary be at the edge of the country's continental shelf, while the East Timorese argue for a median line between the nations.
The new agreement means this debate has been suspended until 2050, more than enough time to develop and produce all the known reserves within the controversial region.
Australia will urge Woodside and its partners to reactivate the Greater Sunrise development, which was mothballed in early January.
The most likely development plan will be to pipe Greater Sunrise gas ashore at Darwin to be treated with gas from ConocoPhillips' Bayu-Undan field.