Australia and East Timor have settled a long-running dispute over oil and gas reserves. The agreement follows negotiations in the northern Australian city of Darwin. The deal is thought to have guaranteed the East Timorese billions of dollars in energy revenue.
Talks in Darwin have brought to an end the long-running dispute over vast reserves of oil and gas beneath the Timor Sea.
Australian Foreign Minister Alexander Downer announced the deal Thursday. He said that East Timorese Prime Minister Mari Alkatiri and Foreign Minister Jose Ramos Horta have agreed that the deal will be officially signed next month.
Exact financial details of the seabed agreement will not be released until then.
It appears that sensitive negotiations on a maritime boundary have been shelved as part of this oil and gas treaty.
Mr. Downer insists the deal is a good result for the government in Dili.
"East Timor will continue to get its 90 percent share of the revenues from the production of the joint development area," he said. "At current oil prices, revenues from that area alone could deliver around $14.5 billion U.S. to East Timor of the next 20 years, averaging around $2 million U.S. per day."
The negotiations reportedly had proceeded on the condition that East Timor suspend sensitive talks with Australia over their maritime boundary, which would have determined who controlled lucrative oil and gas fields.
East Timor was adamant that the frontier be drawn in the middle of the 600 kilometers of sea that separates the two countries. Australian officials, however, wanted to stick with the same boundary they agreed in 1972 with Indonesia, which formerly controlled East Timor.
It gave Canberra control of two-thirds of the sea area and most of its energy resources.
In return for postponing these delicate talks, many analysts think the East Timorese have been guaranteed 50 percent of the revenue from the Greater Sunrise gas field, which is the largest in the Timor Sea.
Officials in Dili have stressed that the revenue was their country's only chance of ending its dependence on foreign aid.