There are significant reserves of oil in the sedimentary rocks beneath the Timor Sea, between the island of Timor and the north Australian coast.

There is a treaty between Australia and Indonesia which parcels out the rights to the seabed oil, and it is based on distances from the coastline of each country.

I assume, although I do not know, that if East Timor becomes independent, one of the issues up for negotiation will be that treaty ... I suspect that essentially Indonesia could end up losing the rights to at least half of its current share.

I hope this clarifies the picture somewhat.

Cheers

david