East Timor's chief negotiator Xanana Gusmao has accused Australia of essentially colluding with oil companies to ensure Greater Sunrise oil and gas gets piped to Darwin instead of East Timor.

Key assertions in Timorese letter: Negotiations went from being about the maritime boundary to being about the Greater Sunrise field

Negotiations went from being about the maritime boundary to being about the Greater Sunrise field East Timor wants the oil and gas processed in East Timor, and that's a deal-breaker

East Timor wants the oil and gas processed in East Timor, and that's a deal-breaker The Australian Government has colluded with Woodside Petroleum and ConocoPhillips

The Australian Government has colluded with Woodside Petroleum and ConocoPhillips The commission's technical experts produced a superficial report

In a letter to the United Nations Conciliation Commission, obtained by PM, Mr Gusmao, who was previously the prime minister and president of East Timor, excoriated both Australia and the process before the UN commission.

"The Commission instead opted for the easiest way out, which is a shame as in my perception it reveals a lack of impartiality on your behalf!"

Australia and East Timor will sign a treaty in New York today to confirm the first maritime boundary between the countries.

The ABC can confirm the treaty places the border in the position advocated by East Timor halfway between the two countries.

But they have failed to agree on how to develop the vast Greater Sunrise oil fields, with deposits worth an estimated $50 billion.

The map shows the location of the Joint Petroleum Development Area (JPDA) within the Timor Sea between Australia and Timor-Leste. ( Supplied: Department of Foreign Affairs and Trade )

There is a deep sense of disquiet in Dili over the treaty conditions imposed by Australia.

Australia is proposing a split of 80/20 in favour of the Timorese if the oil and gas is processed in Darwin.

That is a deal-breaker for East Timor, which says it will take a 70/30 split if the oil and gas comes to East Timor.

Dili says oil and gas is only of great value to the country if it is processed there.



There are many downstream advantages and economic growth that come with having processing take place on the south coast of East Timor, where a "petroleum hub" has been developed with the expectation of creating hundreds of jobs and potentially tens of billions of dollars in development, as well as education, health, infrastructure and knowledge transfer.

"Australia's offer may appear generous [but]...it amounts to around a week's worth of revenue," Mr Gusmao wrote.

East Timor says if the processing takes place in Darwin, there is potentially a downstream benefit to Australia of $25 billion, which it says should rightly go to East Timor, for the development of the country.

East Timor has accused Australia of colluding with companies Woodside Petroleum and Conoco Philips to put forward this proposal.

It has also criticised the Conciliation Commission, saying the technical experts knew nothing about East Timor and describing their assessment as "shockingly superficial" and advantaging Australia.

In the past, the Australian Government and the extractive industries have not been explicit about their views on East Timor's claims.

Australia has said previously that it is not colluding with the companies, but simply doing what is in Australia's best national interest, with the $25 billion also going to local jobs in Darwin and producing tax revenue.

History of Timor Sea treaties In 1989 Australia and Indonesia signed the Timor Gap Treaty when East Timor was still under Indonesian occupation.

In 1989 Australia and Indonesia signed the Timor Gap Treaty when East Timor was still under Indonesian occupation. East Timor was left with no permanent maritime border and Indonesia and Australia got to share the wealth in what was known as the Timor Gap.

East Timor was left with no permanent maritime border and Indonesia and Australia got to share the wealth in what was known as the Timor Gap. In 2002 East Timor gained independence and the Timor Sea Treaty was signed, but no permanent maritime border was negotiated.

In 2002 East Timor gained independence and the Timor Sea Treaty was signed, but no permanent maritime border was negotiated. East Timor has long argued the border should sit halfway between it and Australia, placing most of the Greater Sunrise oil and gas field in their territory.

East Timor has long argued the border should sit halfway between it and Australia, placing most of the Greater Sunrise oil and gas field in their territory. In 2004 East Timor started negotiating with Australia again about the border.

In 2004 East Timor started negotiating with Australia again about the border. In 2006 the CMATS treaty was signed, but no permanent border was set, and instead it ruled that revenue from the Greater Sunrise oil and gas field would be split evenly between the two countries.

"Civil society could potentially perceive this as a 'form' of collusion between the Government of Australia and Darwin LNG Partners and/or the Sunrise J," Mr Gusmao said.

East Timor will sign the maritime boundary treaty in New York, and will continue working towards a deal with Australia.

But there is a very plain bottom line for the Timorese — they want the pipeline in East Timor.

The country is under some pressure because its existing oil and gas fields are expected to run dry by the end of the decade, and observers predict the country could run out of money in less than a decade at current rates of spending.

It could take up to 10 years for Greater Sunrise development to get underway once the deal is struck.

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