Sian Powell – For the East Timorese, it's simple. Scratch a diagram of the Timor Sea into the dirt, with the island of Timor on one side and the great landmass of Australia on the other, and draw a line between them.

Everything on the East Timorese side of this median line belongs to East Timor, they say – easy as that. Yet the map becomes fiendishly contentious if there's lucrative oil and gas beneath that median line, and if there are north-south considerations as well as east-west.

The difficulty is compounded if the disputing neighbour is Australia, a nation that sent in troops in East Timor's hour of need in the bloody months of 1999.

Australia prefers a maritime boundary based on its continental shelf, which stretches north far past the median line, and maintains this is in accordance with standard international maritime law. Yet the East Timorese believe they are morally and legally in the right in arguing for a border equidistant from the two nations, a border that would afford East Timor a much bigger slice of the oil and gas pie.

East Timorese leaders, notably President Xanana Gusmao and Prime Minister Mari Alkatiri, have been tenaciously fighting the East Timor corner, playing the shame game for all they're worth. Gusmao has even bluntly accused Australia of robbing East Timor.

In his welcome speech at last month's first substantive maritime border negotiations in Dili, Alkatiri laid it all on the line. "For Timor-Leste, this is not an academic exercise," he said. "A boundary determined in accordance with established principles of international law – as embodied in the UN convention on the law of the sea and as spelled out in decisions of the International Court of Justice – would triple the income of our country."

That's the difference between life and death for a nation as grindingly poor as East Timor, he says. According to an Oxfam report released a week or so ago, fewer than half all adult East Timorese can read or write and one in 10 East Timorese babies born today will die before the age of five.

Australia has been generous in other ways, the East Timorese say, but now the long-beleaguered people are demanding what they believe is rightfully theirs.

There is a broad consensus in East Timor, says Secretary of State for Investment Jose Teixeira. He has travelled extensively through the tiny nation, and says even the farmers who can't read and write know what's theirs. "These are our resources, and we have a right to them" is the common feeling, he says.

The students sat outside the Australian embassy in Dili's main street, and played loud songs and brandished placards saying "F – - your petrol arrogance", "Don't steal our future" and "Where is our $US1 billion?".

Gaudencio Sousa, 21, a protest organiser, says he's not there for short-term gain of oil and gas riches. "It should be for the generations to come, for our future," he says.

The next set of border negotiations is scheduled for September, much to Dili's irritation. The East Timorese resent the casual arrogance of Australia's delaying tactics: they insist the border negotiations should occur more often than twice a year.

The tiny nation can't afford a 20-year negotiation; three years, the leaders say, would be good. The East Timorese Government has even offered to chip in if Australia can't afford the resources for more frequent meetings.

"We want this issue resolved in accordance with international law," says Teixeira. "We want a commitment to a speedy resolution of this issue."

Yet it's unlikely to be a judicial resolution. Just before the joyous celebrations of East Timor's independence in May 2002, Australia declared it would not be bound by International Court of Justice rulings on maritime borders. Even worse to the East Timorese, since 1999 – when militias were devastating East Timor – Australian-licensed exploitation began in disputed areas – robbing the half-island of $US1million ($1.4million) a day or $US1.5 billion to date. The money from the disputed fields could be put into an escrow account until the dispute is resolved, East Timor has suggested. No answer so far from the Australians.

"Unfortunately, Australia has not only refused to exercise restraint in the disputed area, it has actually awarded new licences in this area since our formal protest last November," Alkatiri says.

The lucrative Laminaria-Corallina and Buffalo fields are in a disputed area immediately west of the joint development zone agreed to by East Timor and Australia. It's there that the lateral border dispute heats up, with East Timor saying its maritime borders should be pushed out to the west and east into the wealth of the Greater Sunrise field.

This could start getting tricky with Indonesia, presenting difficulties for East Timor, a baby nation whose leaders know very well that the might of 220 million Indonesians has to be courted assiduously. But these borders are made of liquid diamond: move them just a little to the east and west, and East Timor will rake in $US12billion over 30 years rather than $US4billion. Money in the bank, the East Timorese say, rather than cap in hand.