Australia’s relationship with East Timor is at risk as the deadline looms on a hotly disputed and lucrative liquid natural gas project — with no resolution in sight.
West Australian-based Woodside Petroleum has until February 23 to reach an agreement with the government of East Timor over the site of processing LNG or else the arrangement between the two is likely to be stopped. This would then trigger the cancellation of Australia’s sea boundary agreements with East Timor.
At this late stage it’s unlikely Woodside will change its long-held position and accede to East Timor’s demand that the LNG be processed on East Timor’s south coast. Woodside’s preferred option is a floating processing platform at the Greater Sunrise LNG field in the Timor Sea.
The East Timorese government can cancel Woodside’s involvement in the project, valued at $20 billion, if no agreement is reached on processing by February 23. But more critically, the termination of Woodside’s contract would end Australia-East Timor agreements on the Timor Sea boundary between the two countries.
The bilateral treaty (the Timor Sea Treaty), the Certain Maritime Arrangements in the Timor Sea (CMATS) and a third document — all imposed by Australia on East Timor in 2002-3 — allocate revenues from the Joint Petroleum Development Area (JPDA) in the Timor Sea. Within the shared, now largely exhausted JPDA, East Timor receives 90% of revenues, Australia receives 10%.
However, 80% of the more important Greater Sunrise field lies outside the JPDA, where the benefits are divided evenly under the Sunrise International Unitisation Agreement (IUA).
East Timor points out the imposition of the boundary contravenes the UN Convention on the Law of the Sea, which Australia withdrew from recognising just before negotiations with East Timor. Under this convention, all of the Greater Sunrise field should be within East Timor’s exclusive economic zone.
East Timor reluctantly signed the Timor Sea Treaty, CMATS and the IUA in 2002-3 with a metaphorical gun to its head. Australia’s position, led by then foreign minister Alexander Downer, was that if East Timor did not sign the treaty Australia would simply allow the pre-existing boundary agreement with Indonesia to remain in place, East Timor would be starved of revenue from the fields and the new state would collapse just after it had gained independence.
There are still 10 days remaining for an agreement between Woodside and East Timor, but the indications are that neither side will budge sufficiently to allow the project to proceed. This will then allow the East Timorese government to cancel the agreement with Woodside and trigger the right of the East Timorese government to terminate the CMATS treaty, throwing open the issue of boundaries between the two countries.
Assuming the agreement is cancelled, East Timor is hoping for two outcomes: it can quarantine the issue of the sea boundary within the bilateral relationship, and it can renegotiate the boundary, following international convention, at the median point between Australia and East Timor.
Despite criticism of Australia in 2010, East Timor’s Prime Minister Xanana Gusmao wants a continuation of the currently close relations between the two countries. This includes Australia’s $116.7 million aid program, diplomatic support and future security arrangements. But Australia showed in 2002 that it can be brutal in its dealings with its smaller neighbours so, assuming the treaty is cancelled, the decision on whether the sea boundary issue is quarantined from the wider bilateral relationship will sit firmly with Australia.
When in 2004 Australia negotiated its sea boundary with New Zealand, it opted for the UN Convention’s median point. East Timor is hoping that, if the Timor Sea Treaty is renegotiated — presumably after the next federal election — Australia will revert to the UN Convention. Doing so, however, would mark an ethical consistency in Australia’s regional relations that has to date been absent.
*Professor Damien Kingsbury is director of the Centre for Citizenship, Development and Human Rights at Deakin University. He is co-editor, with Michael Leach, of The Politics of East Timor: Democratic Consolidation After Intervention, Cornell University Press, 2013.
The Greater Sunrise field is on the Australian Shelf in water 100-600 m deep. Pipelines could be laid from there to the Australian mainland, or to other pipelines along the Shelf.
However, the Timor Trench between the Shelf and Timor plunges down more than 4000 m. As a subduction zone, it is seismically active, with occasional turbidity flows (landslides) scouring the downslope. A pipeline that survived that environment would be an engineering marvel.
The median line of the Timor Trench would be more logical boundary than a line halfway up the Australian Shelf. The line of the current zone of cooperation is generous.
I seem to remember an ABC 4 corners report where what you are saying Roger was a fiction in a glossy Woodside document.The behaviour of Woodside is shameful as depicted by the 4 corners,dropping of a document then running away to get past legal considerations.The report disputed everything you have just posted.Do you work for woodside or are you just another WA cowboy?
http://www.abc.net.au/4corners/stories/2012/09/27/3599022.htm
Comments were disabled on this article earlier today, so I posted the following against the covering editorial. Reposting now to the correct story (with an edit) –
Damien Kingsbury suggests in his article today (for which comments are disabled) that under UNCLOS, all of the Greater Sunrise field would fall within East Timor’s EEZ, and that the boundary, if drawn in accordance with UNCLOS, would be the median point between Australia and East Timor. That’s not strictly correct.
The median point method is just one of three potential methods applicable to define the boundary under international law. The other two methods are the limit of Australia’s continental shelf (i.e. the point at which the continental shelf drops off into the Timor Trough) and the natural sea-bed boundary at the bottom of the Timor Trough.
The problem for East Timor in these two methods is that Australia’s continental shelf is very broad and the Timor Trough lies close to the coast of East Timor. The Greater Sunrise field actually lies on Australia’s continental shelf.
The previous agreement between Australia and Indonesia, and the agreements between Australia and East Timor, recognised all three of these methods. The 90/10 zone to which Damien refers is the zone between the bottom of the Timor Trough and the edge of the Australian continental shelf (i.e. the Australian side of the trough). The 50/50 zone is that part of the Australian continental shelf outside of the median line. In the earlier agreement with Indonesia there was also a 10/90 zone further in toward Australia, bounded by the median line and the boundary claimed by Indonesia.
Short of a ruling by the International Court of Justice, the correct boundary may never be determined. In the interim, some may say that giving East Timor 50% of the royalties derived from oil and gas extracted from the Australian continental shelf is a fair compromise.
I think that the Howard Gov. exhibited an interesting dichotomy: the military aid to Timor and then screwing it (East Timor) over the oil exploitation/revenues. What you say Roger is a good explanatory point. By your comment that “the line of the current zone of cooperation is generous” do you mean towards East Timor?
” and it can renegotiate the boundary, following international convention, at the median point between Australia and East Timor.”
This so called international convention I suspect follows precedent between Europe & Africa over Sicily & Libya.
They are both small countries as part of much bigger continents. I consider this may be less relevant in Australia’s case where we literally control all of our continental shelf & more. So this precedent may be overturned or at best Australia may become the exception to the rule.
Otherwise who cares as Australia is in top ten in area of EEZ. In fact from memory we are third.
wbddrss