page_title: Economy of East Timor
section_title: Oil and gas
hierarchical_section_title: Economy of East Timor / Development projects / Oil and gas
caption_attribution_description: English: Protesters in Brisbane protesting Australia's claim on East Timorese oil. Part of the May Day parade - 1 May 2017
context_page_description: The economy of East Timor is a low-income economy as ranked by the World Bank. It is placed 133th on the Human Development Index, indicating a medium level of human development. 20% of the population is unemployed, and 52.9% live on less than $1.25 a day. About half of the population is illiterate.
  East Timor continues to suffer the after-effects of a decades-long independence struggle against Indonesia, which damaged infrastructure and displaced thousands of civilians.
  In 2007, a bad harvest led to deaths in several parts of East Timor. By November, eleven sub-districts still needed food supplied by international aid.
  According to data gathered in the 2010 census, 87.7% of urban and 18.9% of rural households have electricity, for an overall average of 36.7%.
context_section_description: One promising long-term project is the joint development with Australia of petroleum and natural gas resources in the waters southeast of East Timor.
  East Timor inherited no permanent maritime boundaries when it gained independence, repudiating the Timor Gap Treaty as illegal. A provisional agreement (the Timor Sea Treaty, signed when East Timor became independent in 2002) defined a Joint Petroleum Development Area (JPDA), and awarded 90% of revenues from existing projects in that area to East Timor and 10% to Australia. The first significant new development in the JPDA since East Timorese independence is the largest petroleum resource in the Timor Sea, the Greater Sunrise gas field. Its exploitation was the subject of separate agreements in 2003 and 2005. Only 20% of the field lies within the JPDA and the rest in waters not subject to the treaty (though claimed by both countries). The initial, temporary agreement gave 82% of revenues to Australia and only 18% to East Timor.
  The government of East Timor has sought to negotiate a definite boundary with Australia at the halfway line between the countries, in accordance with the United Nations Convention on the Law of the Sea. The government of Australia preferred to establish the boundary at the end of the wide Australian continental shelf, as agreed with Indonesia in 1972 and 1991. Normally a dispute such as this would be referred to the International Court of Justice or the International Tribunal for the Law of the Sea for an impartial decision, but the Australian government had withdrawn from these international jurisdictions (solely on matters relating to maritime boundaries) shortly before East Timorese independence.
  Nevertheless, under public and diplomatic pressure, the Australian government offered instead a last-minute concession solely on royalties from the Greater Sunrise gas field. An agreement was signed in 2005 under which both countries would set aside the dispute over the maritime boundary, and East Timor would receive 50% of the revenues (estimated at A$26 billion or about US$20 billion over the lifetime of the project) from the Greater Sunrise development. Other developments within waters claimed by East Timor but outside the JPDA (Laminaria-Corallina and Buffalo) continue to be exploited unilaterally by Australia, however.
  Some proceeds from East Timor's petroleum royalties are directed to the country's sovereign wealth fund, the Timor-Leste Petroleum Fund.
caption: Protesters in Brisbane protesting Australia's claim on East Timorese oil, May 2017
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