Australia said Thursday it has resolved a long-standing maritime border dispute with its impoverished neighbour East Timor over billions of dollars in revenue from Timor Sea oil and gas deposits.
"Officials have now initialled an agreement and exchanged letters on the basis of an agreed text," Foreign Minister Alexander Downer told parliament.
East Timor has been locked in a David-and-Goliath struggle with its rich southern neighbour over the resource revenues since it gained independence from Indonesia in 2002.
Downer said details of the agreement between Dili and Canberra would not be released until an official signing ceremony has been held, probably in mid-January.
"This is a deal which is a good one for both Australia and East Timor," Downer told parliament.
"It safeguards Australian sovereign interests and it will provide investors with the certainty needed for large-scale resource projects to go ahead."
East Timor had previously said that under the deal, the two countries would defer any final decision on where their maritime boundary lies for 50 years so as to allow oil and gas projects to go ahead in the meantime.
According to earlier reports, Australia's tiny northern neighbour, one of the world's poorest countries, will receive half the revenues from the Greater Sunrise oil and gas field in return for deferring the boundary dispute.
Downer said East Timor will continue to receive 90 percent of revenues from the previously agreed Joint Petroleum Development Area, potentially providing the fledgling nation with more than 14.5 billion US dollars over 10 years.
He said East Timor had set up a petroleum fund to ensure prudent management of its oil and gas revenues.
The dispute blew up when Australia, which headed a peacekeeping force that played a key role in East Timor's independence from Indonesia in 2002, insisted that a 1970s Timor Sea boundary agreed with Jakarta should remain in place.