Bruce Hextall – East Timor's latest proposal in the sharing of the Timor Sea's vast oil and gas reserves could be viewed as a positive step in resolving some of the issues now subject to debate.

For the industry, including major operators such as Woodside, Shell and US group Phillips Petroleum, they are pressing issues, including ratification of the Timor Sea Treaty, which at this stage represents an agreement to disagree until who owns what is sorted out.

As well, the unitisation of the Greater Sunrise gas field, which East Timor has laid claim to but is now proposing to in part cede, would also encourage major oil and gas companies to spend their development dollars in the region.

Greater Sunrise lies partly in the Joint Petroleum Development Area (JPDA) shared by Australia and East Timor on a 10 per cent/ 90 per cent basis, but is 80 per cent in Australian waters.

Agreement between the two countries on its development, and issues such as the fiscal regime applying, would give the project partners greater confidence as they work towards deciding the best development route to take.

That is a separate debate between the partners who are investigating the Phillips-supported proposal to bring Sunrise's gas ashore and sell it to the Northern Territory and the eastern states. Woodside and Shell have favoured sales to the US.

But before the $4 billion-plus needed for Sunrise's development is committed, an end to East Timor's claims to total field would help.

At the same time, the oil and gas majors would prefer the JPDA to remain under Australian administration, something they argue is of great benefit to East Timor itself because of the reduced sovereign risk involved.