The Greater Sunrise field lies across the perimeter of the Timor Sea Treaty area, known as the Joint Petroleum Development Area or ‘JPDA’. A map of the JPDA is attached to this Fact Sheet. Greater Sunrise will be “unitised” on terms set out in the Timor Sea Treaty between Timor-Leste and Australia. Specifically, the Treaty states that 20.1% of Sunrise lies in the JPDA and 79.9% is outside the JPDA and is apportioned to Australia. Therefore, if Greater Sunrise goes into production as a unitised field under the Treaty, Timor-Leste will receive 90% of 20.1% of Greater Sunrise production. The Greater Sunrise field may contain 300 million barrels of condensate and LPG and 8.35 trillion cubic feet (TCF) of gas.
‘Unitisation’ refers to the process by which a petroleum deposit, which lies across an international boundary or the boundary of a contract area, is treated as one single unit for purposes of technical and commercial development and, as far as possible, for regulatory, administrative and fiscal purposes.
There are many examples in the world of unitisation agreements. However, a Greater Sunrise International Unitisation Agreement between Timor-Leste and Australia will be the first of its kind in that it involves a deposit which lies across a temporary revenue sharing boundary (as opposed to a maritime boundary).
The Timor Sea Treaty specifies that a unitisation agreement for Greater Sunrise shall be equitable, and shall be without prejudice to maritime boundaries. The entirety of Greater Sunrise lies within Timor-Leste’s seabed entitlement, pursuant to the Maritime Zones Act of August 2002. Greater Sunrise is also claimed by Australia. However, each country has agreed to put aside its maritime boundary claims for the purposes of concluding the International Unitisation Agreement.
Under the terms of a Memorandum of Understanding signed on 20 May 2002, the governments of Timor-Leste and Australia committed to concluding an International Unitisation Agreement for the Greater Sunrise field by 31 December 2002.
The Greater Sunrise partnership, which includes Woodside Petroleum, Shell, ConocoPhillips and Osaka Gas, is considering different technologies to develop the gas, including a floating LNG plant, and has indicated that a decision in this regard is expected soon.
Three rounds of Greater Sunrise unitisation talks between the two governments have now taken place. Timor-Leste and Australia believe that the International Unitisation Agreement can be completed by 31 December 2002. Timor-Leste is being advised in these negotiations by some of the world’s most experienced lawyers, petroleum economists and geophysicists.
When the International Unitisation Agreement has been concluded between the two governments, it will then need to be submitted to the ratification processes of each country.
(Note: The IUA was signed on 6 March 2003. It is awaiting ratification by both countries.)