Timor Sea Joint Petroleum Development Area

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 percent to East Timor and 10 percent 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 located in Dili. These matters are overseen by the Timor Sea Joint Commission, comprising a Commissioner appointed by Australia and two 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.

Consistent with the terms of the Timor Sea Treaty, an International Unitisation Agreement 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. Australia passed legislation to implement this agreement in March 2004 and the agreement will come into force when ratified by Timor-Leste.

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. This treaty is yet to be ratified by both countries.

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.

Information on petroleum exploration and production in the Area is available from the Timor Sea Designated Authority.

Dili office:
Avenida de Portugal
No. 5 Farol
Dili, Timor Leste
Telephone: +670 332 4098
Web Page: http://www.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.


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