JAKARTA — Australia and East Timor on Wednesday signed what Canberra’s foreign minister Julie Bishop called “a milestone” agreement on a maritime boundary between the two countries. The treaty ends a long a bitter dispute between the neighbouring countries and paves the way for exploitation of billions of dollars in gas and oil under the Timor Sea – with at least 70 percent of the revenue to go to impoverished East Timor. The agreement was also historic because it marked the first successful conclusion of “conciliation” negotiations to settle maritime differences under the UN Convention on the Law of the Sea. How much money the country, a half-island nation of 1.3 million people who are among the poorest in the world, ends up getting depends partly on what deal is worked out to drill and pipe the underwater gas.
DILI – East Timor, also known as Timor-Leste, faces bleak economic prospects, amid predictions that the oil and gas that account for three-quarters of the country’s gross domestic product could run out in less than a decade. “We are aware of the risks and we working toward managing those risks,” Araujo said, discussing the vital but finite oil and gas reserves. The government has almost $17 billion saved in a petroleum fund, but estimates based on current spending and energy price forecasts suggest the fund will be depleted less than a decade after the last of the oil and gas has been extracted.