Without any media fanfare, Foreign Minister Julie Bishop published a statement on 9 January 2017 announcing that Australia and Timor Leste had agreed to terminate the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS).
This news is more welcome to the Timorese government than to the Australian government. But the uncertainty created by this Timorese win might in time impact more adversely on Timor than on Australia. Only time will tell.
The starting point of any moral and prudential assessment of the announcement must be an acknowledgment that the self-determining, sovereign government of Timor Leste has achieved its objective of forcing Australia to the table to negotiate maritime boundaries in the Timor Sea.
Australia had not always been the unwilling party when it came to the negotiation of maritime boundaries. Back in 2004, Australia was keen to commence the protracted negotiations, knowing that ultimately Australia and Timor would need to be joined by Indonesia at the table to finalise boundaries delimiting the maritime jurisdiction of all three countries in the Timor Sea.
In 2004, Timor was already reaping the benefits from the Bayu Undan oil and gas deposit which was being extracted north of the median line between Australia and Timor Leste. Under the 2002 Timor Sea Treaty, Timor was entitled to 90 per cent of the upstream revenue from any deposits within the Joint Petroleum Development Area (JPDA) covering the area in dispute between Australia and Timor.
Basically, Australia has continued to claim jurisdiction over the continental shelf up to the edge of the Timor Trough, while Timor (like Portugal, its colonial master in times past) has claimed jurisdiction over the area north of a median line between Australia and Timor.
The next major deposit to come on line after Bayu Undan was Greater Sunrise which straddles the eastern lateral line between the JPDA and the area clearly within Australia's jurisdiction.
Under the 2002 Treaty, Timor would have been eligible only for 18 per cent of the upstream revenue (90 per cent of 20 per cent) because 80 per cent of the Greater Sunrise deposit lay within the Australian jurisdiction if the eastern lateral line remained in place.
"Timor has, at least for the moment, taken a huge gamble."
It was the Timorese leaders, not the Australians, who proposed in 2004 that boundary negotiations be put on hold and that a more creative solution for the development of Greater Sunrise be found. The Timorese were