On March 6, 2018, Australia and Timor-Leste signed a treaty establishing a maritime boundary in the Timor Sea. The oil-rich maritime area in question had been a source of conflict leading up to Timor-Leste’s independence in 2002, with tensions between this tiny country and its larger neighbor to the south only growing worse since. In negotiations, Australia sought a boundary along its continental shelf, while Timor-Leste aimed for a median line dividing the maritime space between the two. In 2016, Timor-Leste filed a “notice instituting conciliation” with the Permanent Court of Arbitration (PCA), which has since facilitated negotiations between the two nations to resolve the dispute. It is of note that this was the first ever PCA conciliation to be initiated under the UN Convention on the Law of the Sea, and it has successfully led to a bilateral maritime agreement.

The new continental shelf boundary is made up of 13 points (TA-1 through TA-13), all of which are connected by geodesic lines, and the exclusive economic zone boundary is defined by five of these (TA-5 through TA-10), with the eastern half of the EEZ boundary following the principle of equidistance. On both sides, the continental shelf boundary abuts existing “zones of shared sovereignty” in place between Australia and Indonesia. Within these areas, Australia maintains rights to the seabed and Indonesia to the EEZ/water column. This arrangement between Australia and Indonesia stems from 1972 and 1997 agreements, from which the newly established Australia-Timor-Leste boundary has gleaned several of its turning points.

Map depicting the new Australia-Timor-Leste boundary, as well as zones of shared sovereignty between Australia and Indonesia. Dashed blue lines are strict equidistance lines.

Due to the existence of shared sovereignty zones and the history of delimitations between Australia and Indonesia in the Timor Sea, an interesting term is found in Article 2 of the treaty: It defines several of the continental shelf boundary segments as “Provisional.” The treaty elaborates on this in Article 3, essentially making accommodations for a future delimitation between Timor-Leste and Indonesia by allowing the “Provisional” segments defined in Article 2 to be adjusted under certain conditions.

A major aspect of the treaty involves existing oil fields and the dividing of oil revenue. The path of the maritime boundary leaves Timor-Leste with sovereignty over several oil fields previously shared with Australia in the now-defunct Joint Petroleum Development Area (defined in 2002 by the Timor Sea Treaty). A “Special Regime Area” is now defined surrounding the Greater Sunrise Fields, and the treaty includes language to split revenue from these fields depending on where oil is piped and processed, however always in favor of Timor-Leste.

Map depicting the Greater Sunrise Fields and the delimited Special Regime Area. Source: Annex C, Treaty between Australia and the Democratic Republic of Timor-Leste Establishing their Maritime Boundaries in the Timor Sea.

The establishment of a maritime border and signing of a treaty is seen as a great win for stability in this region, and especially for the country of Timor-Leste, which has come away with solidified sovereignty over known oil reserves — a potentially major stimulus to a long-struggling economy. However, the treaty also raises some questions; How will boundary negotiations go between Indonesia and Timor-Leste? And, based on the outcome of the Australia – Timor-Leste treaty, will Indonesia attempt to renegotiate its maritime boundaries with Australia?

A full version of the treaty can be accessed here.