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. 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.
The Timor Sea Treaty (the Treaty) came into force on 2 April 2003. The Treaty establishes a Joint Petroleum Development Area and a Designated Authority (DA) to regulate petroleum activities in the area. The Treaty provides that the DA is responsible to a Joint Commission and Ministerial Council, representing both countries. The Joint Commission comprises one 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 the Ministerial Council.
The Treaty also provides for revenues collected on behalf of both countries from petroleum produced from the Area to be shared 90% to Timor-Leste and 10% to Australia. Day-to-day approvals for petroleum activities in the Joint Petroleum Development Area are administered by the DA located in Dili, Timor-Leste. On 1 July 2008, Timor-Leste's newly established National Petroleum Authority took over the DA functions and is now the new regulatory authority in the JPDA.
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 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) was signed by Timor-Leste and Australia. By signing this Treaty Timor‑Leste and Australia have demonstrated their 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 23 February 2007.
There are several projects either under way or being considered in the Joint Petroleum Development Area. These include the:
- Bayu-Undan liquids and gas development; and
- Greater Sunrise gas project.
There are currently eight active production sharing contracts in the Joint Petroleum Development Area.
Information on petroleum exploration and production in the Area is available from the National Petroleum Authority.
National Petroleum Authority (Autoridade Nacional do Petróleo)
Ground Floor
East Wing of Palácio do Governo
PO Box 113
DILI, Timor-Leste
Telephone: + 670 332 4098
Facsimile: + 670 332 4082
Further information on the Joint Petroleum Development Area, including links to the legislation can be obtained from the Department of Resources, Energy and Tourism's website at: www.ret.gov.au