Peter Kammerer – The tussle between East Timor and Australia for oil and gas reserves under the Timor Sea is becoming markedly vocal and tactical.

For East Timor, as poor as it is new, the potential revenues represent the difference between poverty and prosperity for its 1 million people. Australia, the wealthiest nation in the region with 20 times the population, officially looks on the issue as a matter of sovereignty.

But East Timor activists accuse Australia of arrogance for its tough stand in negotiations on the disputed maritime boundary, under which the reserves – particularly in the Greater Sunrise field – are located.

They allege its withdrawal in March 2002 – two months before East Timor's independence from Indonesia – from the International Court of Justice and the International Tribunal for the Law of the Sea was a ploy to prevent an independent ruling on the dispute.

Once the boundary dispute has been resolved, the Timor Sea Treaty, which came into force a year ago, ensures East Timor will get 90 per cent of revenues and Australia the remainder.

East Timor's Prime Minister Mari Alkatiri claimed yesterday that Australia had broken international law on Monday by releasing for auction further oil and gas exploration acreage in the contested area. He said the move was contrary to the Greater Sunrise unitisation agreement, approved on the same day by the Australian parliament, but yet to be backed by East Timor.

"International law requires that Australia exercise restraint in disputed maritime areas," Mr Alkatiri said. "Australia's unilateral exploitation of our resources in the Timor Sea is inconsistent with the spirit and the letter of the Greater Sunrise International Unitisation Agreement."

The treaty gives Australia rights to 82 per cent of the field's revenues until the two countries can decide where their boundary lies. Oil experts estimate the deposits are worth US$ 5 billion.

Mr Alkatiri said the exploration acreage was about twice as close to East Timor as it was to Australia and on his country's side of the median line between the nations.

He claimed the bill passed on Monday explicitly stated that the part of the field to be developed lay in an area claimed by both countries and that Australia should refrain from unilateral exploitation in disputed areas.

Australia awarded exploration licences in the disputed area in February and last April. Mr Alkatiri claimed the country had derived more than US$ 1.5 billion in tax revenue from the Laminaria-Corallina fields, also in the contested area and in the western part of the Timor Sea.

He said East Timor had proposed monthly meetings to end the border dispute, but Australia had said it could meet only twice a year.

There was no reaction from Australia to the allegations. But Australian international law expert Gillian Triggs said the country was not acting out of financial greed. Australia was being careful over discussions with East Timor so as not to jeopardise its sovereignty, she said, adding that under international law and on the basis of much of the case law, Australia had a claim to its continental shelf.