Australia & East Timor Treaty: Gas, Oil Reservoir
Australia and East Timor Sign Treaty on Maritime Arrangements in the Timor Sea
Today in Sydney, East Timor's Minister for Foreign Affairs and Cooperation, Dr Jose Ramos-Horta, and I signed the Treaty on Certain Maritime Arrangements in the Timor Sea, in the presence of Prime Ministers Howard and Alkatiri.
The conclusion of the Treaty comes after extensive negotiations were held between April 2004 to November 2005.
The Treaty is based on East Timor's proposal for a 'creative solution' and, together with the 2003 International Unitisation Agreement, establishes a framework for the exploitation of the Greater Sunrise gas and oil reservoir. It will see the equal sharing of upstream Government revenues flowing from the project.
The Treaty builds on the 2002 Timor Sea Treaty in underpinning the income and development of one of Australia's closest neighbours. It also puts on hold the Parties' claims to jurisdiction and maritime boundaries in the Timor Sea for 50 years.
As part of the creative solution reflected in this Treaty, Australia has agreed to share equally with East Timor the upstream revenues from the Greater Sunrise reservoirs. Once the Greater Sunrise project proceeds, it could result in transfers of additional revenue to East Timor of as much as US$4 billion over the life of the project. This would increase East Timor's share of the resource to around US$10 billion.
Exploitation of the Greater Sunrise reservoirs, and the additional revenue provided for under this Treaty, will assist in securing East Timor's development and economic prosperity.
The new maritime arrangements agreed with East Timor under this Treaty are on top of the already very generous sharing arrangements within the Joint Petroleum Development Area, where East Timor receives 90% of revenue from production of petroleum resources, which may be worth as much as US$15 billion.
Under the Treaty, Australia will continue to exercise continental shelf jurisdiction outside the Joint Petroleum Development Area and south of the 1972 Australia-Indonesia seabed boundary. A Maritime Commission will also be established to enable high-level dialogue on a range of important issues facing Australia and East Timor in the Timor Sea, including the management of security threats to offshore platforms and cooperation in managing fisheries resources.
I will place this Treaty and its associated side letters before Parliament in due course, in conformity with Australia's treaties process. It is intended by the Parties that this Treaty be brought into force along with the 2003 International Unitisation Agreement.