An area of the Timor Sea lying between Australia and Timor-Leste is subject to overlapping territorial claims by Australia and Timor-Leste. This area contains substantial resources of petroleum. In this situation, Australia and Timor-Leste have agreed that a joint development regime, pending final delimitation of the seabed, is the best approach to permit development of petroleum resources to the benefit of both countries.
Following passage of legislation through both Houses of Australia's Parliament, the Timor Sea Treaty came into force on 2 April 2003. The Treaty establishes a Joint Petroleum Development Area, the necessary administrative arrangements and provides for petroleum produced from the Area to be shared 90% to East Timor and 10% to Australia. Australia and Timor-Leste have developed the detailed regulatory and fiscal regime to apply to future petroleum activities in the Area.
Day-to-day approvals for petroleum activities in the Joint Petroleum Development Area are administered by the Timor Sea Designated Authority (TSDA) located in Dili. These matters are overseen by the Timor Sea Joint Commission, comprising two Commissioners appointed by Australia and three from Timor-Leste. The Joint Commission also has responsibility for broad strategic issues, including the award of titles. The Joint Commission reports to a Ministerial Council, representing both countries. Commencing in 2008 the TSDA will most likely be incorporated into the administration of the Timor-Leste Government. The Timor Sea Joint Commission will continue to oversee its activities.
Consistent with the terms of the Timor Sea Treaty, an International Unitisation Agreement (IUA) for the Greater Sunrise petroleum field which straddles the boundary of the Joint Petroleum Development Area was signed by both countries on 6 March 2003. The International Unitisation Agreement provides a financial framework and international legal basis for the joint development of the Greater Sunrise field.
On 12 January 2006, the Certain Maritime Arrangements in the Timor Sea (CMATS) treaty was signed by Timor-Leste and Australia. By signing this treaty Timor-Leste has demonstrated its intention to agree to a moratorium on boundary issues for 50 years.
Following ratification in both countries' parliaments, the IUA and CMATS entered into force on 23February2007.
There are several projects either under way or being considered in the Joint Petroleum Development Area. These include the:
The Timor Sea Designated Authority released four Contract Areas in the Joint Petroleum Development Area in early 2006. Eight bids were received for the four Contract Areas that were on offer, with the successful bidders signing Production Sharing Contracts. This brings the number of active production sharing contracts in the Joint Petroleum Development Area to eight.
Information on petroleum exploration and production in the Area is available from the Timor Sea Designated Authority.
Dili Office:
No. 5 Avenida de Portugal
Farol
PO Box 113
Dili, Timor-Leste
Telephone: +670 3324 098
Web Page: http://www.timorseada.org
Email: dilioffice@timorseada.org
Further information on the Joint Petroleum Development Area, including links to the legislation can be obtained from the Department of Industry, Tourism and Resources' website at: www.industry.gov.au