Canberra – Australia and East Timor began talks on Wednesday aimed at settling a bitter dispute over carving up the seabed between the two nations, which holds billions of dollars worth of oil and gas reserves.

The one-day talks in the northern port of Darwin are the first round of negotiations that officials say could take up to five years and eventually will set the maritime boundary between one of the world's most prosperous nations and one of its most impoverished.

Australia and East Timor already have signed deals dividing much of the oil and gas fields, but East Timor now says it was forced to give too much to Canberra.

Once the maritime boundary is settled, it will take precedence over those treaties. But Australia's foreign minister said those pacts are good enough for now.

"Although negotiations on a permanent maritime [boundary] may take some time, legal arrangements are already in place to ensure that benefits from the development of Timor Sea petroleum resources will flow to both countries," Alexander Downer said on Wednesday.

Desperate to get oil and gas revenue flowing, East Timor signed two deals with Australia earlier this year to split the proceeds, even though most of the oil and gas would be on its side if the border were drawn equidistant from Timor and Australia.

Currently, the former Portuguese colony, which is only 600 kilometers north of Darwin, gets just 20 percent of the Greater Sunrise gas field, the richest in the area, while Australia takes 80 percent.

The field is estimated to generate about US$7 billion in tax revenues over the next 25 years and lies only 150 kilometers from East Timor and 400 kilometers from Australia.

East Timor also gets 90 percent of several fields in a "joint development" area to Australia's 10 percent, but those fields are not producing much revenue yet.

Dili also believes it's entitled to three oil fields, which have earned Australia US$1.2 billion in tax revenue since 1999, according to an East Timorese nongovernment organization La-Hamutuk.

Australia has said the deals are generous to East Timor, but Dili has disagreed, even though it has inked the pacts.

"[East Timor] doesn't accept the terms of the Greater Sunrise agreement as in any way permanent," Jonathan Morrow, an adviser to East Timor Prime Minister Mari Alkatiri said after the signing of the deal in March. "We feel we've still got some years left to pressure Australia."

The Timorese government felt compelled to sign the deals to bolster the confidence of resource companies, who were wary of investing millions of dollars into a region where ownership was uncertain.

Andrew McNaughton from the Australia East Timor Association, a nongovernmental group aimed at promoting ties between Australia and East Timor, believes Canberra will be in no hurry to settle the boundary issue because the current deals favor Australia.

"We think East Timor is only getting about 40 percent of its potential assets and Australia is helping itself to the remaining 60 percent," he said.

McNaughton also noted that East Timor relies heavily on its rich neighbor for aid, putting it at a disadvantage in boundary talks. "In the world of real politics Australia holds the power, so a compromise may be the best outcome," he said.

East Timorese officials declined on Wednesday to comment on the talks.