TodayOnline-8 Mar 2018
Timor Leste and Australia have signed a treaty at the United Nations in New York to resolve a long-running dispute over their maritime border and struck a deal on how to share billions in revenue from oil and gas reserves in the Timor Sea.
The treaty marked the first conciliation under the UN Convention on the Law of the Sea — a process officials hope could offer other countries a path towards resolving contentious maritime boundary disputes.
Timor Leste will receive a bigger share of the revenue than Australia depending on the development concept – 70 percent of the revenue if the gas is piped to the tiny country or 80 percent if the gas is piped to Australia for processing.
The agreement also establishes a maritime boundary in the Timor Sea for the first time. Australia had sought a boundary aligned with its continental shelf, but Timor Leste argued the border should lie half way between it and Australia – placing much of the Greater Sunrise field under its control.
“It is a landmark event for our two nations, but also for international law,” said Australian Foreign Minister Julie Bishop, who signed the treaty alongside Timor Leste’s Deputy Minister of the Prime Minister for the Delimitation of Borders Hermenegildo Augusto Cabral Pereira on Tuesday (March 6).
“Both our governments have deemed this to be a just and equitable outcome. With this treaty we open a new chapter in relations between Australia and Timor Leste.”
Mr Pereira said his country was reluctant to be the test case in an unproven procedure. “Nevertheless, we were assured by experts in international law that this was our one and only recourse given the circumstances of the disagreement between Timor Leste and our close neighbour and friend.” He said the treaty signed on Tuesday was “a good treaty”.
“It is equitable, forward-looking, delineating a permanent maritime boundary in the Timor Sea, guided by the principle of achieving an equitable solution,” he said.
The deal is a coup for Dili, which has fought a long legal battle to scrap a 2006 maritime deal with Canberra.
Time Leste argued that it did not give it a fair share of revenues linked to the development of the Greater Sunrise oil and gas field in the Timor Sea. The protracted dispute had led the owners of Greater Sunrise – Woodside Petroleum, ConocoPhillips, Royal Dutch Shell and Japan’s Osaka Gas – to shelve the project.
The Greater Sunrise field is estimated to hold 5.1 trillion cubic feet of gas and 226 million barrels of condensates, which analysts have previously estimated could be worth US$40 billion (S$52.6 billion). However, development could be at least a decade away, with Woodside looking at the latter half of the next decade.
Australian Associated Press reported shortly before the signing ceremony that Timor Leste had accused Australia of colluding with the oil companies to have the gas piped to Australia for processing.
“Australia rejects absolutely any suggestion that we have acted other than in utmost good faith throughout this conciliation process,” Ms Bishop told reporters at the United Nations.
“The way is now clear for Timor Leste, as the majority beneficiary of the division of the resource, to find a way with the joint venture partners to develop Greater Sunrise in an economically viable fashion,” she said.
“We are talking billions of dollars over the life of such a resource project,” Ms Bishop said.
Mr Pereira said companies have told Timor Leste that it is feasible to build a pipeline to the country.
“We believe seriously that a successful pipeline to the south coast of Timor would be a game changer and have a transformational impact on the socioeconomic status of the country,” he said.
Timor Leste, one of the world’s most impoverished nations, had been pushing hard for the building of an onshore processing plant to boost its economy. Ms Bishop said Australia does not have a position and that the main concern was that any project was economically viable.
“It’s a conciliation process, it was never meant to be easy. We had ups and downs in this 22, 23 months,” said Mr Pereira, adding that the focus should be on Tuesday’s treaty signing.
Dili had taken the long-running maritime border dispute to the Permanent Court of Arbitration, an intergovernmental organisation based at The Hague, which ordered compulsory arbitration between the two parties.
Ending years of opposition, Australia agreed in 2017 to accept Dili’s formal notice to terminate an agreement to split petroleum revenue equally from Greater Sunrise and set a 50-year timetable for negotiating a permanent sea boundary.
Following Tuesday’s signing, Indonesia, which has a long maritime border with Australia, issued a statement welcoming the peaceful settlement of the dispute, but said it “reserves all its rights against any outcomes that might potentially affect the sovereign rights of Indonesia” under the UN sea convention.
Donald Rothwell, a professor of law at Australian National University, said Indonesia could pose a potential threat to the new agreement between Dili and Canberra.
“There could be an issue if Indonesia decides it can also revisit the boundaries it negotiated in the 1970s,” he told The Financial Times.
The US meanwhile has congratulated both Australia and Timor Leste on signing the treaty on their maritime boundary, noting that it was reached in “the first-ever conciliation process under the 1982 Law of the Sea Convention.”
A State Department statement called the treaty “a testament to the efficacy and importance of resolving disputes peacefully and in accordance with international law.” (AGENCIES)
