Timor-Leste—new maritime boundary a positive for ailing gas sector
Australia and Timor-Leste signed a new maritime boundary on 6 March. The Treaty establishes permanent maritime boundaries between Australia and Timor-Leste in the Timor Sea and a stable legal framework for resource development. This will provide certainty and stability for businesses and investors.
The Treaty will support Timor-Leste’s economic development by providing new opportunities for income and commercial and industrial development. Seventy or eighty per cent of revenue from the Greater Sunrise gas project will flow to Timor-Leste, depending on how the resource is developed. Oil and gas is responsible for the vast majority of Timor-Leste’s exports and government revenues, but current operating fields are expected to be depleted over the coming years. Without new sources of public revenue, the IMF expects that the sovereign wealth fund, currently 600% of GDP, could shrink to 3.5% of GDP by 2037, leaving the economy and public finances vulnerable. The treaty provides the best opportunity for the development of the Greater Sunrise resource.