David and Goliath battle it out over East Timor's sea of riches

Two nations - one rich, one poor - argue over billions of dollars in oil and gas

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.