Dividing up the spoils: Australia, East Timor and the Timor Sea

Following centuries of colonisation by the Portuguese and then occupation by the Indonesian military since 1975, the people of East Timor (Timor Leste) voted for independence in a popular referendum in 1999 and the new nation finally became independent in May 2002. This accords with Lind's argument that "nationalism is the most powerful force in the world today". Timor Leste is an extremely poor country that has suffered serious destruction of its infrastructure in the wake of Indonesia's troop departures following the referendum. With aid assistance from the international community, a massive rebuilding effort is currently underway but in the future it is likely that much of this will be funded from revenues from oil and gas resources in the Timor Sea. This paper focuses on these resources and the long drawn out negotiations between Australia and East Timor over their ownership and control. Australia has successfully negotiated a very favourable outcome that has soured relations between the two countries. Parallels are drawn with other situations where rich and poor nations are in the process of negotiating joint development of resources in the offshore zone.