Joint Media Release

2 April 2003

Timor Sea Treaty enters into force

We are pleased to announce the entry into force earlier today of the Timor Sea Treaty through an exchange of Notes between the Australian and East Timorese Governments in Dili. 

This provides the basis for the development of the major oil and gas deposits in the Timor Sea between Australia and East Timor, generating major export revenues and jobs for both countries.  The Treaty is the fundamental document underpinning that development in the area of seabed referred to in the Treaty as the Joint Petroleum Development Area (JPDA).

The Bayu-Undan development in the JPDA is expected to have a life of some 20 years and its gross value is estimated to be around $20 billion.  The gas from the project will be processed in Darwin for export, providing substantial downstream benefits for Australia and, in particular, the Northern Territory. 

The revenue to Governments from oil and gas production in the JPDA will be shared in the proportion 90 percent (East Timor) / 10 percent (Australia).  These revenues will be crucial in promoting the long-term stability and prosperity of East Timor.

The Treaty also provides for the development of the Greater Sunrise reservoirs that lie partly within the JPDA.  Under the Treaty production will be shared on the basis that 20.1 percent of the field is attributed to the JPDA. 

The Treaty provides for a comprehensive regulatory framework covering matters such as development and production, the marine environment, employment, health and safety of workers, surveillance, security, search and rescue and air traffic services as well as the application of taxation and criminal law. 

Immediately after the exchange of Notes, the first meeting of the Joint Commission established by the Treaty was held in Dili and the Designated Authority for the JPDA was established.  The Designated Authority will have two offices located in Dili and Darwin. 

The JPDA will be jointly managed by Australia and East Timor for the benefit of both countries with a Joint Ministerial Council overseeing that management.

We welcome the spirit of cooperation in which the Timor Sea Treaty and related instruments were finalised over the last few weeks.

Media inquiries:

Mr Downer’s Office: Chris Kenny (02) 6277 7500
Mr Macfarlane’s Office: Kirsty Boazman (02) 6277 7580
Mr Costello’s Office: Niki Savva (02) 6277 7340
Mr William’s Office: Carina Tan-Van Baren (02) 6277 7300