Abstract

This paper looks to explore the challenges, purposes, and outcomes of the long-term maritime boundary dispute between the Democratic Republic of Timor-Leste and Australia and present a review of how the circumstances of this dispute have influenced and helped shape Timor-Leste’s hydrocarbon-based energy policy over time.

Timor-Leste, a small, underdeveloped, oil-rich nation, although considered one of the world’s poorest countries, successfully negotiated its straddling resources with Australia within its two decades of existence. Firstly, by reaching several interim revenue-sharing arrangements, which improved Timor-Leste’s position in revenues over time, and by adopting a successful petroleum fund (which was highly ranked internationally on several occasions) to manage such revenues. Secondly by surpassing expectations, when it made unprecedented use of a compulsory conciliation process under UNCLOS which led to the resolution of a long-term maritime boundary dispute, with the signing of the 2018 Maritime Boundary Treaty with Australia, its powerful neighbour, who was unwilling, until then, to negotiate.

The Maritime Boundary Treaty allowed the terms for the establishment of a permanent boundary as well as a regime for the development of the Greater Sunrise fields, thus setting new goals for Timor-Leste’s petroleum energy policy, which originally was geared towards guaranteeing incoming revenues much needed for its survival. Currently, its policy is set on the development of its onshore petroleum industry originating from the Greater Sunrise fields.

One could argue that Timor-Leste’s achievements could be worthy of a case study and useful to other nations dealing with similar challenges.