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After the most recent negotiations, the Australians and East Timorese reached an agreement regarding the oil and gas resources under the Timor Sea. The draft agreement calls for the Timorese to receive compensation for a portion of the oil development expected to come from the Timor Sea, in addition to the revenue granted in previous agreements. Both sides also agreed to postpone talks regarding the exact settlement of maritime borders for an undisclosed period in order to bring back investors who were scared away by the prospect of a border dispute. Details of a final agreement are expected to be finalized before the two sides meet in Brisbane on May 11.
The agreement confirms Stratfor forecasts that Dili would soon cave to financial pressure and settle for any agreement the Australians put forth. Canberra has very squarely brought East Timor -- a country it once aided in gaining independence from Indonesia -- to Canberra's mercy for its very survival. The deal also gives investors greater assurance that a border dispute will not interrupt operations in the Timor Sea -- a development beneficial to both parties -- and solidifies relations between Canberra and Jakarta.
The deal calls for the Timorese to receive all previously agreed-upon compensation from the joint development area and up to $3.9 billion in revenues from fields in development which are expected to be worth approximately $30 billion.
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