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Timor Sea Agreements

Timor-Leste does not have a permanent maritime boundary with Australia. The existing treaties between Australia and Timor-Leste are merely temporary revenue-sharing arrangements, which are without prejudice to the final delimitation of permanent maritime boundaries between the two States.

After Timor-Leste restored its independence in 2002, the new State entered into provisional treaty arrangements with Australia, known as the Timor Sea Treaty, to allow the exploitation of oil and gas resources in a part of the Timor Sea named the Joint Petroleum Development Area. This arrangement was entered into on Timor-Leste’s first full day of independence, 20 May 2002.

Subsequent to the Timor Sea Treaty, Timor-Leste negotiated further provisional arrangements with Australia, namely, the treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) and the Agreement between the Government of the Democratic Republic of Timor-Leste and the Government of Australia relating to the Unitisation of the Sunrise and Troubadour Fields (Unitisation Agreement). CMATS and the Unitisation Agreement revised the terms for revenue-sharing and regulatory control in the Joint Petroleum Development Area and the Greater Sunrise field which lies partly inside the Joint Petroleum Development Area and partly outside it in waters claimed by Australia.

CMATS sought to impose a moratorium (that is, a ban) on discussing, negotiating or otherwise pursuing the settlement of maritime boundaries between Timor-Leste and Australia for 50 years. This is in contrast to the obligations in UNCLOS on States with overlapping maritime claims to negotiate a permanent maritime boundary agreement.

Without prejudice

Not affecting or something that cannot be used to a person (or country’s) detriment.

 

Treaties in relation to the Timor Sea

Date of agreement Date of entry into force Treaty Parties Status
9 Oct 1972 8 Nov 1973 Seabed Boundary Agreement Australia, Indonesia In force
11 Dec 1989 9 Feb 1991 Timor Gap Treaty Australia, Indonesia Not in force
14 Mar 1997 Exclusive Economic Zone Agreement Australia, Indonesia Not in force; signed but not ratified
5 Jul 2001 Memorandum of Understanding of Timor Sea Arrangement Australia, UNTAET Not in force
20 May 2002 2 Apr 2003 Timor Sea Treaty Australia, Timor-Leste In force, only as amended by CMATS in 2006
6 Mar 2003 23 Feb 2007 International Unitisation Agreement Australia, Timor-Leste In force
12 Jan 2006 23 Feb 2007 Certain Maritime Arrangements in the Timor Sea Australia, Timor-Leste Timor-Leste is currently challenging the validity of this treaty

 

For the full text of the treaties, see Resources

For some of the key dates related to relevant Timor Sea agreements since 1972, see this timeline graphic

1989 Timor Gap Treaty between Australia and Indonesia

In an attempt to ‘close the Timor Gap’, Australia and Indonesia agreed to the Timor Gap Treaty in 1989. At that time, Indonesia had illegally annexed and was occupying the then territory of East Timor. Through negotiating the Timor Gap Treaty, Australia recognised Indonesian sovereignty over Timor-Leste. Portugal protested against the treaty at the International Court of Justice, however the Court ruled it could not exercise jurisdiction over Indonesia, which at the time did not accept the jurisdiction of the Court.

The treaty created three separate zones, including an area (roughly corresponding to the present-day Joint Petroleum Development Area) in which there was a 50:50 split of revenue rightss for oil and gas produced in that zone between Australia and Indonesia. When Timor-Leste became a sovereign nation, the treaty ceased to have effect. However the substance of the Timor Gap Treaty was used to form the basis of the Timor Sea Treaty between Australia and Timor-Leste.

1989 Timor Gap Treaty between Australia and Indonesia

In an attempt to ‘close the Timor Gap’, Australia and Indonesia agreed the Timor Gap Treaty in 1989. By negotiating the Timor Gap Treaty while Indonesia occupied Timor-Leste, Australia recognised Indonesian sovereignty over Timor-Leste. Portugal protested against the treaty at the International Court of Justice, however the Court ruled it could not exercise jurisdiction over Indonesia, which at that time did not accept the jurisdiction of the Court.

The treaty created three separate zones, including an area (roughly corresponding to the present-day Joint Petroleum Development Area) in which there was a 50:50 split of revenue rights for oil and gas produced in that zone between Australia and Indonesia. When Timor-Leste became a sovereign nation, the treaty ceased to have effect. However the substance of the Timor Gap Treaty was used to form the basis of the Timor Sea Treaty between Australia and Timor-Leste.

1972 Seabed Boundary Agreement between Australia and Indonesia

This agreement between Australia and Indonesia created a seabed (also known as the ‘continental shelf’) boundary between Australia and Indonesia in the Timor Sea. As Portugal was exercising sovereignty over Timor-Leste, which was known as Portuguese Timor at the time, and decided not to participate in negotiations regarding the Timor Sea, Australia and Indonesia did not have jurisdiction to agree to a maritime boundary in the Timor Sea south of Portuguese Timor. As a result, they left a gap between certain points in the Timor Sea, known as the ‘Timor Gap’.

While boundary negotiations between States often remain confidential, it is widely believed that the boundary line was largely based on the continental shelf principle. This meant that the boundary line along the seabed was further north (closer to Indonesia) than the median line. As it was created under a bilateral treaty and Timor-Leste was not a party to it, this treaty and the boundary is not binding on Timor-Leste.

1997 Exclusive Economic Zone Agreement between Australia and Indonesia

The 1997 Exclusive Economic Zone Agreement between Australia and Indonesia appears to be based on a median line boundary for water column rights (i.e. fishing). Seabed rights (i.e. oil and gas) were separately agreed under the 1972 Seabed Boundary Agreement between them. The agreement was signed by both countries, however it was never ratified.

2001 Timor Sea Arrangement between Australia and UNTAET

In anticipation of Timorese independence, Australia and the United Nations Transitional Authority in East Timor (UNTAET) signed a Memorandum of Understanding (MOU) on the Timor Sea. The MOU set out much of the text that was later adopted under the Timor Sea Treaty. Notably, this was the first time that the United Nations had negotiated an agreement on behalf of a soon-to-be independent country.

2002 Timor Sea Treaty between Australia and Timor-Leste

The Timor Sea Treaty was signed on the first day of the restoration of Timor-Leste’s independence (20 May 2002). Like the 2001 Timor Sea Arrangement, the Timor Sea Treaty reflected the provisions of the Timor Gap Treaty.

Area A of the Zone of Cooperation created under the Timor Gap Treaty was effectively replaced with the Joint Petroleum Development Area (JPDA).

The Timor Sea Treaty gives 90% of revenue rights within the JPDA to Timor-Leste and 10% to Australia. The Timor Sea Treaty also creates a three-tiered administrative structure:

1. The ‘Designated Authority’ – the National Petroleum Authority of Timor-Leste, which regulates oil and gas activities in the Timor-Leste Exclusive Area (north of the JPDA) and manages the day-to-day activities in the JPDA (such as licensing and work plans);
2. The Joint Commission, which consists of two Timor-Leste Commissioners and one Australian Commissioner. The Commission is responsible for broad strategic issues, including awarding of titles. Decisions of the Commission must be unanimous; and
3. The Ministerial Council, comprised of an equal number of Australian and Timor-Leste Ministers.

2003 International Unitisation Agreement between Australia and Timor-Leste

The largest known oil and gas field in the Timor Sea is Greater Sunrise made up of the Sunrise and Troubadour gas-condensate deposits. A Unitisation Agreement was agreed between Australia and Timor-Leste regarding the Greater Sunrise field. The treaty states that 20.1% of Greater Sunrise lies within the JPDA and 79.9% lies to the east of the JPDA.

While it was negotiated and signed several years earlier, the Unitisation Agreement did not come into force until 23 February 2007, the same time as the Certain Maritime Arrangements in the Timor Sea treaty came into force.

2006 Certain Maritime Arrangements in the Timor Sea between Australia and Timor-Leste

In 2006, a further provisional arrangement was agreed between Australia and Timor-Leste. The treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) changed the revenue sharing of all of the Greater Sunrise field to a 50:50 split between Australia and Timor-Leste.

At the same time, CMATS placed a moratorium on maritime boundary delimitation for as long as CMATS and the Timor Sea Treaty are in force – that is, for 50 years (potentially until 2057, or in any event until the Greater Sunrise field is fully exploited).

Either Australia or Timor-Leste can terminate CMATS, as they have the right to do so under the terms of the treaty itself (since a development plan for the Greater Sunrise field has not been approved and petroleum production has not commenced). Notably, if either country were to terminate CMATS, the Timor Sea Treaty would also no longer be in force.

Timor-Leste is currently disputing the validity of this treaty. For more information see here.

The Joint Petroleum Development Area map