27-03-02 The dispute between Australia and East Timor over the Timor Sea oil and gas resources has intensified. Australian Foreign Minister Alexander Downer announced that Canberra would henceforth exclude maritime boundaries from compulsory dispute settlements in the International Court of Justice and the International Tribunal for the Law of the Sea.
Downer denied the decision was linked to the Timor Sea issue but reports said it was made after a weekend seminar in Dili, the capital of East Timor. During the seminar, experts advised that East Timor should own most of the biggest natural gas fields so far discovered in the sea, including the huge Greater Sunrise resource being developed by the four big companies of Woodside, Shell, Philips and Osaka Gas.

The Greater Sunrise natural gas fields are on the eastern side of the joint zone and estimated to contain about 9 tcf of gas. Australia and Indonesia had signed an agreement to enjoy equally the resources of the fields which are on the south of Indonesia's seabed border and north of Australia's economic zone.
After becoming independent in 1999, officials of East Timor claimed a bigger share from Australia. After more than one year of acrimonious negotiations, a new agreement was signed in July 2001, which allows East Timor 90 % of all revenues from Timor Sea development.

Australia is the benefactor of East Timor. It was Australia that appealed Indonesia in 1998 to hold a referendum which led to the independence of East Timor, and led the international forces rushing into the newly independent country in 1999 when pro-Indonesian militants uprose.
East Timor's chief negotiator Mari Alkatiri said, while Australians self-comforted saying that though the arrangement gives the East Timorese access and control over at least $ 3.5 bn in revenue over 30 years, it will reduce the potential call on Australia for aid funds to keep that country afloat as an independent nation.

But now the 2001 agreement is questioned. International law experts toldthe Dili seminar that current maritime law would swing the boundaries of East Timor's offshore zone to the east and west, giving it at least 80 % of the Greater Sunrise fields and potentially 100 %, as opposed to the 20 % under present boundaries. Such changed boundaries would give East Timor up to $ 36 bn more in East Timor government revenue than the 8 bn in can now expect, while on its part, Australia's share would shrink from $ 28 bn to nothing.
On the western side of the joint zone, the Laminaria-Corallina oil fields will also be included in East Timor's boundary. Canberra is obviously upset by the seminar but East Timor took it seriously. It's chief negotiator Alkatiri has reportedly flown hurriedly to London with a UN legal officer to seek urgent advice. All these developments indicated a more serious row seemed to be imminent.