The Australia-Indonesia zone of cooperation treaty

Abstract

The Australia-Indonesia Zone of Cooperation Treaty entered into force on 9 February 1991. The event not only marked a new chapter of the development of the bilateral relationship between the two countries, but also heralded the birth of a regime to allow joint development of the petroleum resources in an area where the sea boundary is subject to competing claims. This regime consists of a ministerial council and a joint authority. The former oversees all the policy issues relating to the implementation of the treaty, while the latter administers petroleum operations in area A of the zone of cooperation. Eleven production sharing contracts for area A were signed by February 1992. The contractors have committed themselves to an exploration expenditure of at least US$200 million for the period from 1992 to 1994, including the drilling of 23 wells. Exploration activity to date has involved the acquisition and analysis of seismic data and drilling operations commenced in December 1992. Area A, including the Kelp structure, is perceived to have a high prospectivity.