Timor border row resolved

AUSTRALIA and Timor-leste have finally agreed on a new treaty to define the maritime boundary of the $40 billion Timor Sea oil and gas field and legal status of the Greater Sunrise project. In late February, the Permanent Court of Arbitration (PCA) held its final set of meetings in Kuala Lumpur, with both parties set to sign the new treaty on 6 March at the United Nations headquarters in New York. PCA said the new treaty delimits the maritime boundary, establishes a Special Regime for Greater Sunrise and pathway to develop the resource, and outlines revenue sharing arrangements between the Governments where the shares of upstream revenue allocated to each party will differ depending on downstream benefits associated with the different development concepts for the project. “We hope that the Commission’s conclusions and the signing of the treaty will help to provide the fiscal and regulatory certainty required to develop Greater Sunrise for the benefit of all parties,” a Sunrise joint venture spokeswoman told Reuters. The long-running dispute stretches back to 2006 when a temporary treaty agreed on a 50:50 split. But when claims of Australian Government spying during negotiations for the 2006 treaty surfaced in 2013, political uncertainty led the owners of Greater Sunrise – Woodside Petroleum, Conocophillips, Royal Dutch Shell and Osaka Gas – to shelve the project in 2015. In September 2016, PCA announced it would take on the case as a last attempt to end the conflict. While the terms of the treaty were not yet public, the Timor-leste Government has been adamant for years that the JV develop an onshore LNG processing plant on Timor-leste soil instead of piping gas to the existing Darwin LNG plant or exploit the field through a floating LNG vessel. PCA said it was now finalising a report regarding the proceedings, which it will publish mid-april. Yet even with a resolution in sight, the Woodside-operated Greater Sunrise project – estimated to contain 5.13 trillion cubic feet (Tcf) of gas and 225.9 million barrels of condensate – was still far off from entering production, according to Woodside’s 2017 Annual Report. The report outlines three ‘time horizons’ for growth projects, with Sunrise featuring in its third wave (2027+).

Image: Supplied. The Greater Sunrise fields are located 150km south-east of Timor-leste and 450km north-west of Darwin, NT.