CMATS: What will happen after February 23rd

Source: Independente daily newspaper

On 23rd of February the CMATS treaty between Timor-Leste and Australia will cease if no development on the Greater Sunrise (GSR) oil field takes place. There is dispute over how the development of GSR field should take place. Timor-Leste wants the oil piped to its territory for processing while Woodside wants to use a floating LNG plant offshore. Billions of dollars of investment and revenues from one the most lucrative zones in the Timor Sea is now in doubt. However, according to Juvenal Dias of La'o Hamutuk, the issue is a little more complicated than what will take place on February 23rd. Juvenal also weighs the pros and cons of Timor-Leste's decision relating to the future of GSR on any outcome that will arrive after this date. The article "Implications for Timor-Leste of Terminating the CMATS Treaty" (also in Tetum) gives a comprehensive summary of the issue to the uninitiated.

Here is a short background on CMATS from La'o Hamutuk:

Background
The CMATS treaty was signed by Foreign Ministers Alexander Downer and Jose Ramos-Horta in Sydney on 12 January 2006, with Prime Ministers John Howard and Mari Alkatiri looking on, as shown in the photo at left. 

Timor-Leste ratified both CMATS and the International Unitisation Agreement for the Sunrise and Troubadour Fields (IUA) separately on 20 February 2007, publishing the Parliamentary Resolutions on 8 March in the Official Gazette (Portuguese). 

On 7 February 2007, the Australian government tabled the treaty in its Parliament, and the Joint Standing Committee on Treaties began an inquiry. Submissions were invited before 16 March 2007. See below. Although CMATS has already entered into force, the JSCOT continued its inquiry and published a reportin June 2007. 

On 22 February 2007, Australian Foreign Minister Alexander Downer sent a letter to the Parliamentary Joint Standing Committee on Treaties invoking the "national interest exemption" to enable the treaty to enter into force without a Parliamentary waiting period. The next day, he announced that it had entered into force. 

The CMATS package, the product of eight years of negotiation, had advantages and disadvantages for both countries.In summary, Timor-Leste increased its share of upstream revenues from 18% to 50% in return for accepting Australian sovereignty over areas east and west of the JPDA, ratifying the IUA, and agreeing not to raise the maritime boundary question for 50 years. At the time, La'o Hamutuk felt that the balance was not in Timor-Leste's favor. We continue to believe that Timor-Leste has the right to all maritime and seabed resources in the Exclusive Economic Zone shown in yellow on the map at left.

For more reading on CMATS, please continue to La'o Hamutuk's website.  Wikipedia also has a good entry on this issue.