The Australian parliament in Canberra has passed legislation that will enable ratification of the treaty fixing the country’s marine boundary with East Timor that was signed at the United Nations in New York in March.
The boundary follows the median line between the two countries. Australia passed the legislation July 29, just days after East Timor’s parliament did the same.
The legislation will create a new regime to share oil and gas revenues from the known oil and gas fields in the Timor Sea, particularly the yet-to-be-developed Greater Sunrise gas-condensate discoveries.
An authority is to be established to act on behalf of Australia and East Timor to facilitate joint management of the region.
Australian Prime Minister Scott Morrison will visit East Timor in August to mark the 20th anniversary of the country’s independence from Indonesia. The ratification of the treaty will be brought into effect during Morrison’s visit through an exchange of diplomatic notes.
It is the first treaty ever reached under a special conciliation mechanism of the United Nations Convention on the Law of the Sea.
Under the new treaty East Timor will be entitled an 80% share of revenue from the Greater Sunrise fields if the gas is piped to Darwin in Australia and 70% interest if the gas is piped across the Timor Trench to a new facility to be built on East Timor’s southern coast.
East Timor will be entitled to full 100% ownership of revenues from existing Bayu-Undan gas field, which is now in its declining years.
The Greater Sunrise fields, then known as Sunrise and Troubadour, were first discovered by the Woodside Petroleum Ltd.-led joint venture in the mid-1970s. The fields lie 150 km southeast of East Timor and 450 km northwest of Darwin and have an estimated worth of $40-50 billion if developed.
