East Timor signed a treaty with Australia at the United Nations on Tuesday to end a decade-old dispute over their maritime border and potentially unlock billions of dollars in offshore gas revenue.
The treaty is expected to provide a major boost to East Timor, one of Asia's poorest countries, by establishing special arrangements for sharing revenue from the Greater Sunrise offshore gas fields in the Timor Sea.
After signing the treaty during a UN ceremony, Australian Foreign Minister Julie Bishop told reporters that East Timor stood to gain "substantial benefits" from the deal.
"We are talking billions of dollars over the life of such a resource project," Bishop said.
Discovered in 1974, Greater Sunrise has an estimated worth of between $40 and $50 billion. The offshore fields are located 150 kilometers (93 miles) southeast of East Timor and 450 kilometers northwest of Darwin.
East Timor's minister for delimitations said development of the gas fields through a pipeline that would reach the south coast of his country would be a "game-changer."
Such a project would have a "transformational impact" on the socioeconomics of the country, where 65 percent of the population of 1.5 million are "young people looking for jobs," said Hermenegildo Augusto Cabral Pereira.
A commission that oversaw negotiations on the treaty will soon release a report on the various options to develop the Greater Sunrise fields.
East Timor, one of Asia's poorest countries, has been in dispute with Australia over the sea border since its independence from Indonesia in 2002.
UN Secretary-General Antonio Guterres witnessed the signing of the treaty, which was the first-ever reached under a special conciliation mechanism of the UN Convention on the Law of the Sea.
While details of the revenue-sharing arrangement have not been finalized, Bishop said East Timor would receive the lion's share of revenue -- 70 or 80 percent -- from the development of Greater Sunrise.
The project could also help East Timor boost its standing among foreign investors, said Pereira.
"If foreign investors can see that Timor can manage successfully a complex industry downstream, building a platform, a pipeline and an energy plant, they will trust that we can do much more," he said.
In 2016, East Timor dragged Australia before the Permanent Court of Arbitration, the world's oldest arbitration tribunal, based in The Hague, after contesting a previous deal signed in 2006.
Dili wanted that treaty, which also covered the vast Greater Sunrise fields, torn up after accusing Australia of spying to gain commercial advantage during the negotiations.
As the dispute escalated, a group of energy companies including Australia's Woodside, ConocoPhillips, Shell and Osaka Gas decided to mothball plans to develop the Greater Sunrise fields.
In January last year, the two neighbors announced that a new pact would be negotiated through the arbitration court.
East Timor was invaded by Indonesia in 1975 before it gained independence in 2002 after a UN-sponsored referendum.