East Timor is located in the eastern part of Timor, the island lies between the South China Sea and the Indian Ocean.
A colony of Portugal since 1511. Invaded by Japan in the World War 2. 60 000 Timorese (13% of the population) were killed in the reprisals for assisting Australian commandos in their sabotage of an intended Japanese invasion of Australia. By contrast, Australia lost 20 000 in the entire war.
After 15 months of tough negotiations, it was agreed that East Timor would receive 90% of the royalties from the drilling, or £2.8bn to £3.5bn in the 20 years from 2004. In addition to its 10% share of the upstream royalties, Australia is likely to make four to five times that figure from refining the oil and gas, as East Timor is not expected to build the facilities to do so.