Australia has signed a treaty with Timor-Leste to pursue joint development, exploitation and management of the Greater Sunrise gas fields.
The Treaty also draws the maritime border between Australia and Timor-Leste in the Timor Sea.
The special arrangement will see the transfer of certain offshore petroleum operations and areas from the current Joint Petroleum Development Area (JPDA) to Timor-Leste’s exclusive jurisdiction.
Established under the 2002 Timor Sea Treaty (TST), the JDPA is an area of shared Australian and Timor-Leste jurisdiction.
Other permits to be transferred to Timor-Leste’s exclusive jurisdiction include a portion of Australian exploration permit WA-523-P and production licences WA-18-L and AC/L5.
Under the provisions of the new treaty, the countries intend to set up the Greater Sunrise Special Regime to jointly develop the resource.
The regime will also oversee the distribution of the upstream revenue between the two states.
As per an agreement reached by the parties, Timor-Leste is set to receive 70% of the upstream revenue in case the development of the Greater Sunrise fields takes place by means of a pipeline to a liquefied natural gas (LNG) processing plant in the country, while Australia will retain the remaining 30%.
Australia has also agreed to offer 80% of the profits to Timor-Leste, provided the development happens by means of a pipeline to an LNG processing plant in Australia.
In order to supervise the development of Greater Sunrise, a designated authority and a governance board will be set up.
Woodside Petroleum operates the Sunrise joint venture (JV) with a 33% interest.
Other stakeholders in the JV include Royal Dutch Shell, ConocoPhillips and Osaka Gas.
The JV has two retention leases (NT/RL2 and NT/RL4) within the Australian jurisdiction of the fields, as well as two production sharing contracts (PSCs) for the JPDA portion.